Do I Need My Own Medical Insurance?

Welcome to adulting! As part of your company’s employee benefits plan, you may be eligible for medical protection and receive a medical card to use if you fall ill..

Interestingly enough, you may also have your own personal medical card, bought by your parents when you started college years ago. Hmm, no one told you about this interesting conundrum. Now you have TWO medical cards, offering two separate coverage for the same purpose. Is this allowed? Which one will override which? Do you need to cancel one?

Now, let’s explain the difference between the medical plan you get from your employer, and the one you get on your own.

The similarity between a group and individual medical coverage is in its function. Broadly speaking, a medical plan (regardless of whether it is group or individual) protects you by covering for the treatment costs incurred in the event of:

• An illness
• An accident
• A hospitalisation/surgery/ICU

The medical plan provided by your employer is known as a group coverage, as it covers a group of employees under one employer. The medical plan you purchase on your own or with your family, is known as an individual coverage.

Some medical plans also provide insurance coverage on death or total permanent disability, where your family or dependents will receive a lump sum pay out if either were to happen to you.

Depending on insurance providers and policy type, there may be differences between the plan you have on your own and the plan from your employer. Here are some important things that may differ between both:

• Annual limit – What is the total benefits the insurance provider will pay in a year for a medical insurance plan? 
• Lifetime limit – What is the maximum claimable amount throughout your life time?
• Daily room and board rate – What room type are you eligible for based on your plan?
  

It is important to know your limits for the above as it would help you to plan your finances, in the event of a medical emergency.

Generally speaking, group plans have a lower annual limit than individual plans. Which plan you should use first depends on:

1. The severity of your medical condition
2. The necessity of operation
3. The possible treatment options

Common illnesses such as flu which does not require an operation or lengthy treatment can be covered by your group or individual medical plan.

In the event of something more serious requiring inpatient surgery, hospitalisation and treatment that exceeds your group medical plan coverage, you can use the group coverage first and cover the remaining costs with your individual plan. For example:

• Group coverage: RM 30,000
• Individual coverage: RM 80,000
• Actual cost of surgery & treatment: RM 50,000
• Cost of surgery and treatment will be covered RM 30,000 from group and RM 20,000 from individual

Either plan will not override the other, as both group and individual plans can operate in tandem. If your group coverage allows you a higher room and board rate, you can most definitely utilise that in the event of hospitalisation without affecting the individual coverage. However, if both individual and group have the same room and board rate, there is no difference in which you use, as long as it is within the given rate.

You should start purchasing your own medical insurance as soon as you are able to. Benefits of getting a medical insurance early:

• Protect yourself from rising cost of medical treatment
• The younger you are in age when you lock down a plan, the more affordable the premium
• Each individual is entitled to tax reliefs of up to RM3,000 per year for medical insurance premiums

References

https://www.imoney.my/articles/all-you-need-to-know-about-getting-medical...

The above articles are intended for informational purposes only. AIA accepts no responsibility for loss which may arise from reliance on information contained in the articles.