Planning to get a medical card for yourself? It’s best that you get the necessary information first so you can get the best medical card. In this article, we’ll walk you through the important things you need to know about medical card.
What is a medical card?
A medical card pays for your medical expenses as specified in your medical plan. But there’s a difference between a standalone medical card and a medical rider.
A standalone medical card works as term insurance. You’ll be covered for as long as you pay the premium.
A medical rider is attached to a comprehensive or investment policy as an additional feature.
What are the differences between a standalone medical card and a medical rider?
These are the primary differences between a standalone medical card and a medical rider:
1. Premium
Premium is the amount that the policyholder periodically pays to the insurance company in order to enjoy the insurance coverage.
For a standalone medical card, the premium is lower but increases based on the policyholder’s age and Malaysia’s medical inflation rate. Higher medical costs may result in higher premiums.
For a medical rider, the premium is higher especially during the first few years, to cover the higher premium for the coverage in the future. The upside is the premium for this policy does not increase every year as it is not affected by medical inflation. The amount of the extra premium paid during the first few years will cover the higher medical costs in the future. For a medical rider attached to an investment policy, at least 46% of the premium left after deducting the insurance charges will be injected into the insurance company’s fund for investment.
For example, at age 50, your yearly premium for your medical card (as a rider) is RM3,000. Instead of having to pay RM3,000, you only have to pay RM2,500 as RM500 of the premium has been covered by the extra premiums that you have paid in the first few years.
2. Coverage
Insurance coverage is the amount of risk or liability that is covered for an individual by the insurance provider.
For a standalone medical card, your insurance will stop covering you once you stop paying the premium.
For an investment-linked policy, riders such as medical card, life insurance and critical illness insurance are usually bundled together. Unlike a standalone medical card, a comprehensive and investment-linked policy may gain cash value over time. Because of the cash value, a comprehensive and investment-linked policy will not be easily terminated. The medical card will continue to insure the policyholder as the extra premium paid still covers the medical insurance cost.
These are more things you need to know about medical card
Based on the broad differences between a standalone medical card and a medical rider, you can see that a medical rider that is attached to a comprehensive policy offers better coverage. However, do note that insurance companies offer a variety of plans. These are a few important things you need to know about medical card before committing to any plan.
Annual and lifetime limit
An annual limit is the maximum amount you can claim from your insurer in a year. Meanwhile, a lifetime limit is the maximum amount you can claim from your insurer in a lifetime provided your premiums are paid and policy is still in force. It’s important that you pay attention to these as they determine the amount of coverage you are entitled to. For instance, unlimited annual and lifetime limit.
Age limit
Age limit is the maximum age above which an insurance company will not accept applications for insurance or will not renew a policy. For instance, some insurers may insure you up to 70 or 80 years old. As age limits vary according to insurers, you need to check the age limit that your selected insurer will cover.
Panel hospitals
Panel hospitals are hospitals that have an agreement to accept the medical cards provided by certain insurers. These are hospitals that partner with your insurer that are able to consent and submit your insurance claim to your insurer. It’s important that you find an insurer with an extensive panel hospitals so you’ll have more and better options in seeking treatments.
Family coverage options
You can also consider covering your spouse and children in a single policy. Some policies cover children born after the policy is purchased (up to a maximum of five children). Do check with your insurers to know more about medical plans that provide coverage for families.
Waiting period
A waiting period is the duration you have to wait before you can claim for some or all of the coverage in your policy. Most policies have a waiting period between 30 to 90 days. There are also insurers that offer a no-waiting period for certain coverage. Pay attention to this so that you are aware of when you can begin using your insurance for your medical expenses.
Premium
Premium is the amount you have to pay to your insurer either monthly, quarterly, half-yearly or yearly to your insurer, in order to enjoy coverage in your policy. Ensure that you have a sufficient amount to pay your premium consistently as missed payments may cause your policy to lapse. In that case, you may lose your insurance benefits.
Exclusions
Exclusions are cases for which your insurance doesn’t cover. For example, some insurers don’t cover pre-existing conditions or medical conditions that you have before applying for your insurance. Say that you have cancer, your medical card won’t cover the treatments for your cancer as it’s part of your insurance exclusions.
Hospital room and board limit
The hospital room and board limit refers to the cost of your hospital stay. The coverage is based on the type of room and the number of days you stay in the hospital. You may customize the coverage amount, say that you wish to stay in a more comfortable or even in an individual room.
Deductible
A deductible is the upfront amount you pay before your insurance plan starts covering the rest of your medical bills. For example, if your medical insurance claim is RM5,000 and your deductible is RM1,000, you have to first pay RM1,000 before your insurance pays the remaining RM4,000.
You can opt for a zero-deductible medical card or a medical card with a deductible. For a zero-deductible medical card, you’ll have to pay a higher premium as your insurance will bear the total costs of your medical expenses. If you choose a deductible medical card, you can pay a lower premium. For example, if you choose a medical card with a RM1,000 deductible, you only have to pay a monthly premium of RM200. On the other hand, if you choose a zero-deductible medical card, you have to pay a higher monthly premium, say RM400. The upside of choosing a deductible medical card is you can enjoy a lower premium. But only choose this plan if you can have the amount of money ready with you each time you need medical treatments.
Guaranteed renewal
Your insurance company will guarantee your policy renewal so long as you continue to pay your premiums on time. However, note that guaranteed policy renewal is subject to your lifetime annual limit and the maximum eligible age for coverage.
Conclusion
Given the rising medical costs, it’s important that you prepare ahead for any unfortunate events. You may be in the best of health now but there’s no guarantee you’ll remain healthy in the future.
A medical card will help protect your health and finance. We have shared above the things you need to know about medical card. Consider all the important things before purchasing any medical card. For more information, you can also consult our non-commissioned insurance experts at Bjak to get professional and unbiased advice.
(Source: Investopedia)
