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Your Car Insurance Probably Won’t Cover These Things…

Depending on the type of insurance that you purchase, only specific incidents will be covered under the policy type, so how well do you know your car insurance policy? Let’s go through each policy type to get a better idea of what you can and can’t claim for.

 

Your Car Insurance Probably Won't Cover These Things...

If You Have Purchased:

  • Basic Third Party Insurance, only the ‘third party’ (other vehicle or driver) is covered in case of accidents, damages and injury. But your vehicle will not receive any coverage if it is stolen, damaged by fire or involved in an accident.
  • Third Party, Fire and Theft Policies, as the name implies, this policy covers the third party for damages, injury and death. It also provides protection for your vehicle from fire damage and theft.
  • Comprehensive Car Insurance offers higher coverage levels for theft, fire damage and third party coverage plus additional coverage in case of accidental damage to your own vehicle.

What Car Insurance Policies Will Not Cover

Now let’s look at other exclusions which are not typically covered for any type of car policy, be it basic or comprehensive:

1. Medical Costs from an Accident

If you’ve been involved in something a little more serious than a little fender bender and require medical attention, your car insurance policy is not likely to cover you. In fact, car insurance policies without add-ons only cover the death and disabilities of the third party and not you, the driver.

Thus, make sure your health insurance is up-to-date as it will help pay for your medical bills even if it’s due to a car accident. You may also choose to add on personal accident insurance when offered (at a slightly higher premium) or buy the policy as a standalone.

Personal accident insurance will provide a payout for major bodily injuries or death of the driver and depending on the terms, the passengers as well.

2. Incidents During Commercial Use

Private car insurance coverage does not protect you if your car gets in an accident or is stolen if you are using it to conduct business. This might include driving an Uber or GrabCar – even if they aren’t technically classified as commercial vehicles at present. If you are in fact using your car for business purposes, then you’ll need to purchase commercial car insurance instead of a private one.

It might actually be a good idea to designate your car for commercial use so you can write off legitimate car-related costs as a business expense when doing your taxes.

Do note that commercial car insurance tends to cost more than private insurance. But what would be worse than paying a slightly higher premium is being denied your claims altogether!

3. Passenger Liability

If a passenger sues you or causes an accident, your liabilities will not be covered by your car insurance policy.

However, there is an add-on for passenger liabilities that keeps you covered in case your passenger does get hurt in your vehicle and decides to sue you or is in fact culpable for an accident e.g. opening the passenger door and causing a motorcyclist to fall off.

The added coverage comes with a higher premium and might be worth it if you are often carrying passengers in your car.

Read also: How To Get The Most Out Of Your Car Insurance

4. Personal Belongings Left in Your Car

If you often keep your laptop, wallet and other valuable belongings inside the car, note that if stolen – you won’t be able to claim for compensation. In fact, even with credit card protection plans that offer to replace lost or stolen items, it does not cover theft or loss if the item was left in your vehicle.

The only insurance plan that might provide coverage is a Home Contents policy. For instance, if your car was in your property compound at the time of the theft and if the items meet the minimum claim amount, you may be allowed to claim compensation. However, the specifics vary with policies.

Nevertheless, it’s just safer to avoid leaving things you value in your car as it might make your vehicle more tempting to burglarize too.

5. Your Car Loan

If your car gets stolen or damaged (beyond repair), your car insurance will not cover whatever you owe on the balance of your loan. Of course, if you have purchased comprehensive insurance and third party fire and theft policies, you may claim for compensation from your insurance provider.

If your claim is approved, you can use the settlement to pay for your loan, but you might still owe the gap amount –between the sum insured and the balance of the loan.

The best course of action to limit what you pay for the gap is to ensure that your car is sufficiently insured, as close to its market value as possible. Also be sure to look for plans that will pay out on the sum agreed and not the (depreciating) market value.

Our list isn’t exhaustive, so be sure to go through your policy thoroughly to find out about other potential exclusions or limitations that come with.

Is it time to renew your car insurance plan? Why not make life easier and simply head on over to our comparison page to discover the best affordable car insurance policies available!

Credit by: https://ringgitplus.com/en/blog/insurance/your-car-insurance-probably-wont-cover-these-things.html

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Everything You Need to Know about Medical Card Insurance

Insurance Reliefs for Covid-19 in Malaysia
In light of the Coronavirus (Covid-19) outbreak, the life insurance companies have taken additional relief measures to support policyholders who are impacted by the economic slowdown due to the pandemic.

You may refer to the List of Life Insurance Companies Offering Additional Benefits for COVID-19 Outbreak to find out the extra relief measures provided by your insurers.

Policyholders are advised to check with their respective insurance providers for the additional coverage for Covid-19 in Malaysia and for further assistance.

Do you know that medical inflation in Malaysia has consistently risen by 10%-15% every year? 

While the cost of hospitalization is gradually increasing every year, the minimum wage is still stagnant; making it even more difficult to afford medical treatment with your hard-earned money.

 

Hospital Fees and Charges

Source: RinggitPlus blog

When seeking for affordable medical treatment, government hospital comes on top of our minds as it is cheap and accessible by all.

The truth is, we find the length and time of queuing at government hospitals is intolerable. After the long wait, we are left with 2 choices: (1) come back later, or (2) go to private hospital.

Some people have to choose the latter (go to private hospitals) not only because of government hospital’s limited accommodation, but also when outpatient treatment is not an option for their cases.

At private hospitals, you can expect to be admitted in no time and receive high quality services from the moment you walked in until the clean bill of health is issued. However, this comes at a hefty price.

That is not all, private hospitals will usually require you to have a medical card insurance before you can admit yourself for a treatment.

Why medical card matters?

A medical card is an insurance plan that help mitigate the risk of financial loss when someone falls sick.

Do you know that there are direct (e.g. hospitalization and treatment charges) and indirect (e.g. transportation, childcare, household spending etc) costs that need to be managed when you are not fit for work and require medical attention?

With a medical card, you can shift some of the risks to the insurance plan while receiving the best medical treatment at your preferred healthcare provider, as long as it is covered in your policy.

 

This article intends to help you make an informed decision on your medical card purchase. Read on to understand how a medical card works, what to expect when you make a medical claim and which medical card is best for you.

Medical Card Insurance Terms

A medical card usually comes with some stipulations that intend to protect the interests of both parties: the insurer and the insured. 

Annual Limit

Annual Limit

This is the claimable amount that a policyholder is entitled to in a year and it will be refreshed every policy year upon your policy anniversary date. 

For instance, if your medical card has an annual limit of RM100,000, you can only claim up to this amount in that policy year. Any amount above the annual limit will not be covered by your medical card.

The annual limit has a range from as low as RM10,000 to as high as RM2 million in a year. There are also medical cards without annual limit, giving you the flexibility to claim any amount up to the lifetime limit. 

Depending on your financial capacity at the time of buying an insurance plan, a ‘right’ annual limit amount should fully cover for the cost of treatment for a health condition that may arise. 

This can save you from digging deep into your pocket to pay for the difference between your annual limit and the actual cost of treatment.

Lifetime Limit

Table 1: Medical Card Lifetime Limit Comparison

  

Medical Card A with AL

Medical Card B w/o AL

Max Cover Age

80 years old

80 years old

Annual Limit (AL)

RM100,000

Unlimited

Lifetime Limit (LL)

RM1,000,000

RM1,000,000

Claim Frequency (projected)

1 full claim every year up to 10 years

Could be more or less than 10 years, depending on the claim amount per year

A lifetime limit is the maximum amount you are entitled to claim from your medical card over the tenure of your contract with the insurance plan.

Let us take a look Table 1: Medical Card Annual Limit Comparison for an example. Both medical cards have a lifetime limit of RM1 million, with the difference of Medical Card A comes with an Annual Limit, whereas Medical Card B does not.

If you own Medical Card A, you will benefit from having a 10 years’ worth of coverage with a lifetime limit of RM1 million (if you make a yearly claim of RM100,000). 

If you own Medical Card B, you have the flexibility to claim any amount in a year. Your lifetime limit will be deducted accordingly and gradually decreasing over years.

There is no right or wrong way to place an importance on the limits when considering a medical card insurance. Most importantly is how much are you willing to commit in a month or year when you have decided it.

Guarantee Letter

Hospital Admission Process

Source: Manipal Hospital

Many of us are under an impression that a medical card can guarantee our hospital admission on its own. The truth is, the real procedures take time as it requires cross-checking by the hospital and insurer.

A guarantee letter is part of the cashless admission policy, whereby the insurer will take care of your hospital bills on your behalf via your medical card, provided you have satisfied the policy’s terms and conditions.

Without a guarantee letter, you are most likely to bear all costs at your own expense. If you happened to come across a scenario like this one, you should read on our >>Guides to Claim Your Medical Insurance.

Panel Hospital

Panel Hospitals

An insurance company will have a list of hospitals who they have partnered with and agreed to accept their medical cards. They are called the panel hospitals.

When you get admitted into one of the panel hospitals, the process of admission and claiming will be much easier compared to that of non-panel hospitals as your medical card is guaranteed by the panel hospital.

If you chose or happened to be hospitalized in a non-panel hospital, worry not. All you need is your medical report and bills attached when you make an insurance claim to the insurance provider. 

You must submit your claim request within 30 days after you have been discharged.

Cashless vs Reimbursement Policy

Cashless vs Reimbursement

The rule of thumb for getting the best medical card is knowing the difference between cashless and reimbursement policy.

A cashless policy is where the insurer will pay for the bills directly to the hospital on behalf of the Insured Person. With that said, you need a guarantee letter from the insurer.

Under the reimbursement policy, you will pay for the total hospitalization costs first, and then the insurer will reimburse all expenses when you have made a claim after you have been discharged.

Room & Board

Room & Board

All medical cards cover for room charges for up to a maximum number of stays. Some quarters put an emphasis on this benefit as recovery process can be personal and requires a comfortable space.

That’s why you can choose to be fully or partially covered by your medical card under Room & Board.

When you choose a plan with RM300 room and board for 150 days, it means that the medical card is covering you for up to that amount and time.

If you wish to upgrade your room, this action will trigger a clause in your medical card policy contract whereby you need to co-pay for the difference.

For example, if your chose to stay in a Single Deluxe room at Tung Shin Hospital with RM300 room and board coverage, the amount that you need to cover on your own is RM150 per day.

Table 2: Hospital Room Rates in Klang Valley 2021

Hospital

Suite

Single Deluxe

Single Standard

Double Bedded

Four Bedded

KPJ Ampang Puteri Hospital

RM680

–

RM230

RM160

RM90

Sunway Medical Centre

RM700-RM1,288

RM338

RM268

RM150

RM95

Pantai Hospital Bangsar

RM630-RM1,138

RM388

RM238-288

RM138-168

RM98-118

Hospital Pusrawi

–

RM280

RM200

RM140

RM95

Tung Shin Hospital

–

RM450

RM200

RM135

RM90

Gleneagles Kuala Lumpur

RM980-RM3,800

RM380

RM250

RM160

RM100

Manipal Hospital

–

RM300

RM200

RM120

RM80

Assunta Hospital

RM350-RM550

RM320

RM220

RM150

RM95

AVISENA Specialist Hospital

RM650-RM1,500

RM500-RM580

RM230

RM175

–

Hospital Kuala Lumpur

RM225

RM180

RM120

RM90

RM60

All prices are for per day**

Deductible

Deductible Medical Card

A deductible is the amount of risk you are willing to cover when you suffer a loss. In the medical card context, deductible is payable by the Insured Person before an insurance starts covering the rest of the bills. 

Because deductible amount is absorbed into your premiums, you must assess your budget and needs before buying a medical card.

A high-deductible plan saves you on monthly or yearly premiums. The downside is, you need to foot a costly medical bill at your own expense before your medical card coverage kicks in.

A low to zero-deductible plan, on the other hand, comes with a higher premium. The bright side is, this plan can save your out-of-pocket money when you make a medical insurance claim in the future.

Co-Insurance

Co-Insurance Medical Card

This is also a cost-sharing feature between the insurer and the Insured Person. The amount is based on a percentage and is charged after you have paid your plan’s deductible.

Usually, you will only need to pay a small percentage, with the insurer covering the large portion of the bill.

For example, if your medical card has a 20% coinsurance, you are responsible for the 20% of the total healthcare services, while the 80% will be covered by your insurer.

Guides to Claim Your Medical Insurance

Medical Card Claim

Owning a cashless policy is convenient as you don’t need to claim once you have been discharged. However, there are situations which require you to pay upfront at the hospital admission counter, such as:

  • Your medical card is a reimbursement policy
  • Your insurer did not issue Guarantee Letter
  • You are admitted into a non-panel hospital
  • You seek medical treatment overseas

If you caught yourself in any one of these situations, you can claim back your expenses by following these 3 simple steps:

Step 1: Prepare documents

Typically, these are the documents required for your claiming process:

  • A copy of your NRIC
  • Medical report by treating doctor
  • Original medical bill(s) and receipt(s)
  • Investigation or diagnostic report (if any)
  • For overseas treatment: original itemised bill(s), flight ticket, passport

Always remember to keep the original copy of bills and receipts when you are receiving medical treatment because they may be entitled for reimbursement. 

Most importantly, a medical report is a prerequisite document for a claim.

Step 2: Complete Claim Form

You need to complete a claim form, which can be downloaded from your insurance provider’s website or app. Without this claim form, your claim request is invalid. 

Take this time to also review thoroughly your claim form and other documents before proceeding to submit them.

Step 3: Submit Claim

There are many ways you can choose to submit your claim. You can rely on your agent or do it yourself via mailing or stopping by at branch office. 

Some insurance companies offer online submission platform too. Regardless of the means, you must complete the claim submission within 30 days after hospital discharge to qualify for reimbursement.

Now, what if the insurance provider rejects your claim? It is important that you call up your agent and review the policy, together with your claim request form and documents before appealing for a second time.

Besides, you can also seek helps from PIAM Information Centre and Ombudsman for Financial Services (OFS) if your claim has been unfairly denied again.

Summary:

best Medical Card in Malaysia

Best Medical Card in Malaysia

  1. Allianz MediSafe Infinite+ Medical Card

  2. AXA Affin eMedic Medical Card

  3. AIA A-Plus Health Medical Card

  4. Etiqa Elite Takaful Medical Plus Medical Card

  5. ManuLife ManuHealth Elite Medical Card

  6. Prudential PRUValue Med Medical Card

  7. Takaful myClick MediCare Medical Card

  8. Great Eastern Smart Medic Medical Card

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How much should you save in your emergency fund?

Most financial experts recommend that you have somewhere between three months and six months of basic living expenses in your emergency fund.

The three-month guideline is generally recommended for those who are in salaried positions and have more secure employment. The six-month recommendation is for those who have less stable employment or earn variable incomes. 

If you fall into the second category, an income reduction may even be more likely than a complete job loss. An emergency fund can be used to help cover your basic living expenses during a time when your income has been reduced.

Naturally, you’ll need to rebuild your account when your income increases. The basic idea will be to build up the account during high earning months, in preparation for low-income months. 

Why you should save?

Having a well-funded emergency fund is more important than just providing funds for a potential disruption of your income. Apart from covering basic living expenses, your emergency fund will do the following: 

Prevent you from needing to liquidate retirement accounts

Retirement accounts are the primary investment asset of most people. And for many, it’s their only source of significant savings. For that reason, they may be tempted to tap those funds in an emergency. But doing so invites tax consequences.

At a minimum, you’ll need to pay ordinary income tax on the amount withdrawn. But if you’re under 59 ½, you may also be subject to a 10% early withdrawal penalty.

That may solve a short-term need for cash, but it will create an additional tax liability the following year. A well-stocked emergency fund will prevent that outcome. 

Avoid the need to liquidate investments 

If you need to sell stocks or funds to raise cash in an emergency, one of two outcomes will be likely:

  1. You’ll sell those investments at a loss, locking in the loss at the same time, or
  2. You’ll sell the investments at a gain, creating a capital gains tax liability.

Once again, a well-funded emergency fund will eliminate the need to sell investments in an emergency.

Minimize the need to tap credit lines

Many investment advisors are telling people to be “fully invested”. The rationale is that since returns on stocks are so much higher than fixed-income investments, keeping money in savings is a guaranteed money loser.

From a purely financial standpoint, that advice is spot on. However, many people in that situation rely on credit lines to act as an emergency fund. The problem with that strategy is that it simply pushes the need for cash into the future. Sure, your immediate need for cash will be satisfied by the credit lines. But you’ll need to pay them back later on.

In that way, using credit lines instead of an emergency fund simply transfers the cash needed from the present into the future. You’ll either need to repay the money in one or two large lump sums, or you’ll be adding a new and semi-permanent monthly payment to your budget. 

Covering sudden expense related emergencies

Throughout this article, we emphasize an emergency fund amount based on covering a certain number of months of basic living expenses. That implies the primary purpose of an emergency fund is to cover the loss of your income. But while that may be the single most important purpose of an emergency fund, it’s hardly the only one.

 Other emergency situations requiring tapping your emergency fund could include:

  • A large, unexpected and uncovered medical expense.
  • A major car repair, such as the one that runs into several thousand dollars.
  • Helping a friend or family member in an emergency.
  • Facing an unexpected legal entanglement that will require paying an attorney upfront.
  • A sudden and unexpected need to travel, perhaps to take care of an ailing family member.
  • A major home repair, not covered by homeowner’s insurance, or where the insurance reimbursement is seriously delayed.
  • An identity theft situation that causes you to lose access to your credit lines.
  • You receive a notice from the IRS informing you that you owe several thousand dollars in back taxes.

These are just some of the situations that could arise, forcing you to need extra cash in a hurry. If you spend a little bit of time thinking about it, you’ll realize there are many more. A well-funded emergency fund will keep you insulated from each of these situations. 

What is the emergency fund calculator?

The Emergency Fund Calculator is practically unique to Money Under 30. There are all kinds of calculators available on the web, helping you do everything from paying off debt to saving for retirement. But there aren’t many available to help you determine how much you should have in your emergency fund. That’s the whole reason we’re offering this calculator.

Determining your target emergency fund amount is basically a math equation. It starts by knowing approximately how much money you need to cover your basic living expenses in a typical month. From there, you can determine the number of months you’ll need to have in your account.

But that’s where the calculation gets tricky, and that’s what the Emergency Fund Calculator is designed to help you navigate.

Often, when currently employed, it’s difficult to estimate how long you might be unemployed after a job loss. What makes this calculator unique is that it gives you options to estimate how long you might be unemployed. 

The answer to that will be different for everyone and is naturally highly subjective. After all, it’s not possible to predict the future. But in my opinion, it’s definitely something you should try to do.

How does the emergency fund calculator work?

The purpose of the Emergency Fund Calculator is to help you determine the emergency fund amount you need to have put aside.

It asks you the following:

  1. Your average monthly expenses – this is how much you would need to cover your basic living expenses in a typical month.
  2. Existing liquid savings – which is how much you have available already to meet your basic monthly living expenses if you lose your job. It excludes retirement savings since there are tax consequences for liquidating those.
  3. Your estimate of the degree of difficulty you would have to replace your current income.

The third and final question is of course highly subjective. But even if you think you can replace your income quickly, it might be best to give a more conservative estimate.

It tells you how many months’ expenses to save for

Your answer to the third question will also provide an estimate of the number of months savings you’ll need in your emergency fund. The breakdown is as follows:

  • Easy: Three months
  • Average: Six months
  • Difficult: Nine months
  • Very Difficult: 12 months

Ironically, if you fall into either the Difficult or Very Difficult categories, it may be because your industry or field is either stagnant or in decline. If your pay reflects those conditions, it may be difficult to save the amount of money you’ll need to have to cover an income disruption. 

Unfortunately, those most likely to face prolonged unemployment require the most generously funded emergency accounts. 

Top savings accounts for an emergency fund

Perhaps the best account to hold your emergency fund is a high-yield savings account. The account will not only provide the highest interest possible on your savings, but it will also offer the type of liquidity needed with an emergency fund.

For this purpose, we recommend the following for bank savings accounts:

Credit by: https://www.moneyunder30.com/emergency-fund-calculator

1621912644573

“Every car insurance provides the same benefits.” Is this statement still valid?

It still valid from the aspect of basic coverage category like:

·      Comprehensive – compensate your own damage, fire, theft, and third-party liability.

·      Third Party Fire & Theft – compensate fire incident, theft, and third-party liability.

·      Third Party Only

However, with the constant market changes and de-tariff initiative by Bank Negara Malaysia. Car insurance nowadays are more innovative and targeted. Every company are now allowed to determine their own premium rating and provide various value-added benefits to their clients. Let me share with you few examples.

If you drive frequently and with a smart phone. AXA Affin have designed the 1st telematic car insurance in Malaysia – AXA SmartDrive Safe that probably suit you. Upon sign up the car insurance with AXA, you will obtain a complimentary micro tag to put in your car. This micro tag allows you to do a SOS call to call centre by just pushing a button for 15s, then the call centre will contact you and assist. AXA also provide immediate medical assistance when accidents arise, which potentially save a life.

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If you drive frequently but you are not a smart phone use. You may want to consider Syarikat Takaful Malaysia. One of the most attractive reason is they provide ‘no claim rebate’ upon completing your 12 months insurance. How many insurance companies able to provide your certain amount of refund when you have no claim? STMB also provide complimentary all driver & passenger PA coverage to clients. Wow. What a savings.

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If you only utilize your car less than 10,000KM per year. You may want consider mileage base insurance introduced by Chubb Insurance. Chubb insurance provide mileage base car insurance subject to 5,000KM, 7,000KM & 10,000KM options which having 10% – 30% lower premium compared to ordinary car insurance. The concept behinds this is: why I need to pay the same if I drive less and having less probability of accident? Yup! Why pay more when you can pay less? This initiative by Chubb is in demand for those elderly who only drive to wet market once a week, or for those who are now work from home most of the time due to pandemic.

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With above sharing, I hope you now understand that the car insurance options now are quite different compared to years ago. It is no longer the same across all company, but every company have their specific offer that may fit into your specific needs. As such, I will advise you to always discuss with your car insurance agent on which solutions best suits you.

Never ever just get quotation and finding the lowest premium possible but finding the right solutions that fit your needs.

I hope the sharing benefits you and we looking to bring you more topic in near future. You are always welcome to write your comments below share your thoughts. I will read every comment.

I am Calvvinz Tan, founder of 4MSOI Wealth Management and we believe everyone could be a Financial Planner.

Thank you.

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