PETALING JAYA: The hike in insurance premium payments has come at the wrong time, industry stakeholders told theSun.
Malaysian Medical Association president Datuk Dr M. Subramaniam said insurance companies should find ways to make medical insurance more affordable instead of raising premiums.
The M40 and B40 groups will be affected the most by the increase as they are among the hardest hit from the impact of the Covid-19 pandemic, he pointed out.
“More than a million people affected by the pandemic in the country have opted to defer their life insurance premium payments for three months this year,” Subramaniam said.
“The total amount of premium payments being deferred is more than a billion ringgit, according to media reports. This should be enough indication that the people are facing tough financial times.”
Subramaniam said the insurance industry must explain the rationale for raising the premiums.
He asked whether there has been sufficient engagement with stakeholders that included representation for policyholders.
He pointed out that the country’s targeted insurance penetration rate is 75% but it was only at 54% last year. “How will making insurance less affordable increase the penetration rate?” he asked.
Subramaniam also said it was reported that only around 10% of the B40s have life insurance.
An insurance agent said not only have people lost their jobs, there are also a big number who have suffered pay cuts.
“I have had customers calling me and demanding to know why their premium is going up at this difficult period,” he said.
“One person told me outright that he would not be paying the higher premium as he cannot afford it.”
The agent said he has always advised his clients to review their policy every three to five years to meet their future needs.
He cited the example of a person who has maintained the same policy level for 10 years, but he will have to pay the increase in the premium, which is usually revised every three years.
“If the premium goes up by RM20, the person who has not improved his policy will have to pay the RM20 extra but will receive nothing extra.
“If the person agrees to increase his medical insurance, he may end up paying slightly more than the RM20 extra but he will have a better and improved policy,” he said.
Another agent said the time has come for policyholders to voice their displeasure at this increase.
He said people should take to social media so that insurance companies and the industry regulator will take notice of their unhappiness.
Kho Hui-Yi, head of corporate affairs at Prudential Assurance Malaysia Bhd, told theSun that healthcare is playing an increasingly important part in financial planning for families.
“It is our duty to ensure that medical protection for our policyholders will continue to be effective in the long run, amid sustained medical inflation of more than 10% per annum in the past few years,” she said.
Increases in hospital and doctor charges, advancement in medical treatment and drugs, as well as increasing demand for better healthcare services accounted for the rise in premiums, she pointed out.
“But we understand that Covid-19 has affected our customers. For those whose premium and/or insurance charges are being revised in 2020, we will credit back the incremental portion of the insurance charges deducted for year 2020 to their policy account value,” Kho said.
“At the same time, Prudential is maintaining its premium for the year 2020 and the new premium (if applicable) comes into effect next year.
“Customers also have the option to apply for premium deferment if they are financially affected by Covid-19 or the MCO, and can apply for a grace period of three months.”
