You may think that all medical cards work the same in covering your hospitalizations and surgical treatments. While the purpose of all medical cards is essentially the same, there are key differences between a standalone medical card and a medical rider.
What is a medical card?
Generally, a medical card helps the insured (that’s you) pay for your hospitalizations and surgical treatments in a panel hospital based on your policy. The amount that your medical card will cover for your hospitalizations and surgical treatments is limited to the annual and lifetime limits as specified in your policy.
There is a variety of medical cards available in Malaysia. In this article, we’ll cover the two most common medical cards in Malaysia which are a standalone medical card and a medical rider.
Broad differences between a standalone medical card and a medical rider
For your ease of reference, we have summarized the differences between the two medical cards. Refer to the table below for their differences.
| Feature | Standalone medical card | Medical rider |
|---|---|---|
| Definition and function | An individual medical insurance plan that typically covers hospitalizations and surgical treatments | A medical insurance plan that is attached to savings or investment-linked life insurance |
| Premium | – Cheaper than a medical rider – Premium increases depending on age and medical inflation | – More expensive than a standalone medical card – Premium mostly remains the same |
| Affordability | Suitable for individuals on a relatively lower budget | Suitable for individuals who are more financially comfortable |
| Pros | Cheaper premium | – Premium mostly remains the same – Has a cash value – You can withdraw the cash value for your personal needs or to cover your premiums |
| Cons | – Premium increases depending on age and medical inflation – No cash value – No compensation if you make no claims | – Higher premium – While you can withdraw the cash, your premiums in the following months will increase |
Now that you have an overview of the differences between a standalone medical card and a medical rider, we’ll be elaborating on the differences in the following points.
Explanation of the differences between a standalone medical card and a medical rider
1. Definition and function
Standalone medical card
A standalone medical card is an individual medical insurance plan that covers your hospitalizations and surgical treatments. This medical card is not attached to any savings or investment-linked life insurance.
Medical rider
A medical rider is an add-on or additional benefit attached to savings or investment-linked life insurance.
Other than a medical rider, you can also add critical illness insurance to your savings or investment-linked life insurance. Upon diagnosis of any of the critical illnesses stipulated in your policy such as cancer, stroke or heart disease, you’ll get a lump-sum payout from your insurance. You can read more about critical illness insurance here.
2. Premium
Standalone medical card
Generally, the premium for a standalone medical card is lower compared to a medical rider. This is because the coverage is typically limited to hospitalizations and surgical treatments. However, keep in mind that the premium will increase depending on these two factors:
- Age. As your age increases, you’ll have a higher risk of getting an illness and being admitted to hospitals. The risk will increase your premium. Generally, your premium may increase every five years.
- Medical inflation. Medical inflation will increase your premium. Medical inflation can be defined as the increase in the average or unit cost and utilization of healthcare services over a period of time. Keep in mind that Malaysia is one of the countries that has experienced one of the highest medical inflation rates in ASEAN in recent years.
Medical rider
Compared to a standalone medical card, the premium for a medical rider is higher as it is attached to savings or investment-linked life insurance. The premium will also go into your savings or investment depending on your policy. The premium may be higher, but the premium rate mostly remains the same. The premium may increase slightly depending on medical inflation. Age does not affect the premium.
3. Affordability
Standalone medical card
Given its lower premium, it is recommended for individuals on a lower budget to get a standalone medical card instead of a medical rider. It’s important that you can afford to pay your premium regularly as payments lapse may cause you to lose your insurance benefits.
Medical rider
If you’re more financially comfortable, then you may want to consider a medical rider attached to savings or investment-linked life insurance. As the premium is higher than a standalone medical card, ensure that you’re capable of regularly paying for your insurance.
4. Pros
Standalone medical card
- Not required to take additional insurance plans or riders
- Cheaper than a medical rider
Medical rider
- Premium mostly remains the same
- Has a cash value (investment returns)
- Depending on the policy, you can withdraw the cash value for personal use
- You can also use the cash value to pay your premiums. This can avoid payments lapse and policy termination
5. Cons
Standalone medical card
- No cash value
- You’ll receive no compensation if you make no claim throughout your policy period
- Probably no guaranteed renewal. For instance, if you’re diagnosed with a certain illness during your policy period, policy renewal for the following year may not be guaranteed
- Premium will increase according to age and medical inflation
Medical rider
- Higher premium compared to a standalone medical card
- Policy will end once you’ve received a lump-sum payout for your critical illness rider (your insurance will deduct the amount from your death benefit.) If the amount for the critical illness payout is the same as the death benefit amount, your policy will end
- If your policy ends, any riders including a medical rider attached to the policy will also end
- While you have the option to withdraw your cash value, your following premiums will increase
Between a standalone medical card and a medical rider, which is better for you?
As we have shown, each plan has its own pros and cons. If you’re on a budget, consider a standalone medical rider as it is cheaper and more friendly to your wallet.
If you have more to spare, consider getting savings or investment-linked life insurance and add a medical rider to your insurance. Bear in mind that you can only purchase a medical rider if you have life insurance. Consider getting a medical rider if you’re also looking to grow cash value.
We suggest you discuss with insurance agents before committing to any medical card. You may also speak with friendly and helpful insurance experts at Bjak for a free consultation.
(Sources: eTakaful, iBanding, Life Insurance Association of Malaysia (LIAM), Milliman)
