Since you’re here…our best bet is you’re thinking of getting yourself medical insurance. Congratulations, you’re just one step away from getting protected.
But some, if not most, insurance terms sound so alien that you can hardly understand what they mean. You can’t risk entering into an agreement that you don’t understand!
Stop furrowing your eyebrows as we’re going to explain five key terms you must understand before buying medical insurance. Let’s jump right in!
1. Premium
Guess what “premium” means in the insurance universe? It doesn’t mean “high quality”.
“Premium” means the amount that you have to pay for your insurance plan. Depending on your insurance agreement, you can pay for your premium monthly, quarterly or annually, so ensure that you check your premium payment structure.
Example: Your monthly premium is RM150 a month. This means you’ll have to pay RM150 to your insurer every month.
Tip: Get medical insurance early to enjoy a lower premium!
2. Waiting Period
Before you can enjoy some or all of the coverage stipulated in your policy, you must pass a specific period of time called the “waiting period”. Generally, the waiting period is 30 days from your policy issuance date.
Example: You buy your medical insurance on August 1, 2021. You can only start to enjoy some or all of the coverage per your policy on September 1, 2021.
Tip: Get medical insurance as early as you can. You’ll never know when you’ll need it.
3. Annual Limit
“Annual limit” is the maximum amount your insurance provider will pay in a year for your medical plan. This means that your medical expenses in a year are covered only up to a specific amount stipulated in your policy.
Example: Your insurance policy stipulates that your “annual limit” is RM100,000. Your hospital and surgical claims in a year will only be covered up until they reach the maximum amount of RM100,000.
Tip: Customise your annual limit to best fit your budget and needs!
4. Outpatient Treatment
“Outpatient treatment” is a treatment that you get at a hospital, clinic or medical facility that DOES NOT require you to be admitted for an overnight stay. “Inpatient treatment” on the other hand requires an overnight stay.
Example: Your medical plan only covers “outpatient treatment”. Since you’re required to stay overnight after your surgery, you have to bear the cost of the “inpatient treatment”.
Most medical insurance plans cover both inpatient and outpatient treatment but do check with your preferred insurer before signing your agreement.
Tip: Check also your hospital ward coverage for a comfortable overnight stay!
5. Zero deductible
If your policy stipulates “zero deductible”, this means you will not have to pay ANY portion of your medical charges. Your insurer will pay 100% of your medical expenses covered under your medical plan.
Example: You are charged RM5,000 for minor surgery. But you don’t have to pay a dime for it, thanks to your “zero deductible” medical insurance policy!
However, say that your policy includes an RM1,000 “deductible” as opposed to “zero deductible”, you’ll have to pay RM1,000 while your insurer will settle the remaining RM4,000.
Tip: Tailor your “deductible” to best fit your budget or better yet, get yourself a zero-deductible policy!
So those are five key terms you must understand before buying medical insurance.
Don’t buy insurance before understanding its full terms and conditions
We can’t stress this enough. Please don’t simply buy insurance before understanding its full terms and conditions. It’s only right that you know what you’ll be getting from your insurance.
Give Bjak a ring so our insurance specialists can clear any confusion you may have (absolutely free, and no strings attached!)
(Sources: Investopedia, Reliance General Insurance, RinggitPlus (on annual limit), RinggitPlus (on zero deductible), St. George’s University)
