Updated: Jun 9, 2021
Are you getting medical coverage for the first time? And not sure of the differences between traditional standalone medical card and investment link medical card? Watch this video and let me tell you the difference between both products.
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I believe many of us had been through this process. Buying a medical insurance. At that moment we are thinking, “Which one I should get? A standalone medical card or an investment link policy?” What’s the difference? I just need a hospitalization coverage? Same one la. Just get the cheapest one?... Wait. Investment link medical card got savings… wahh…. Pening kepala… how la..?
Well to be honest, 6 years as an agent I can tell you, there is no right or wrong on your decisions either to take up a standalone medical plan or an investment link product. But today let me guide you to have a clearer picture on the difference between both products.
Basically they are 4 major difference in my point of view:
1st lets talk about premium. A standalone medical insurance premium can be lower compared to an investment link plan for starting. The reason is that premium for standalone medical insurance is only taking care of the medical insurance itself. While for investment link medical insurance the price depends on the other coverage or rider attached to policy.
Lets say for a lady 35 years old. Standalone Medical coverage of RM1.6 million will cost her about RM153 a month in the beginning.
But for investment link, minimum it will cost her about RM400 a month as she added in other coverage such as Critical illness and premium waiver in the plan.
2nd For standalone medical cards, the premium will increase with age. But if we purchase an investment link medical plan, premiums will not increase with age. (but maybe adjusted to keep up with medical inflation in the future).
Let's say a 35 year old lady taking up the standalone medical plan. 1st year, she will be paying about RM1700 +/- a year. 5 years later, the premium will become RM2100+/- and goes on.
But if she took up investment link medical plan, she will be paying RM400 a month throughout her lifetime and the coverage period of the policies.
3rd The policy contract. For the policy of standalone medical plan, is very simple and straightforward. It is sold as Medical coverage for treatment at the hospital. That’s it. Simple and easy to understand. But for investment link medical plan, it is sold as a rider that is attached to the main plan which is Life Insurance with medical card and other riders, such as critical illness or accidental benefits.
4th The cash value. For standalone medical plan, there will be no cash values. So you just keep paying and paying for the coverage only. For investment link medical plan, you can have a cash value generated from the investment returns as portion of the premium you paid is invested in the selected funds. Of course, this return is not guaranteed. Because similar to any investment, there’s a risk involved. The cash value is depends on the types of funds, stock market performance and economy conditions.
Well, that’s all regarding my sharing today on the difference between traditional medical plan and investment link medical plan. If you still have questions or concern regarding any of the plan either traditional or investment link medical plan, feel free to call me or leave your comment. I will do my best to assist you.
I am Moses from Gratitude Life and Takaful
Thank you and have a nice day.