Parliamentarian expresses concern, urging Bank Negara intervention: Healthcare insurance companies reducing coverage and boosting premiums questioned
In a bid to regulate investment-linked insurance products, Bank Negara Malaysia (BNM) issued a circular in July 2019. However, policyholders who purchased such products before 2019 are now facing challenges.
The issue stems from insurers being overly optimistic in projecting investment returns for healthcare policies. In reality, the returns are far lower, leaving insufficient funds for medical coverage. As a result, insurers are drastically shortening coverage terms, potentially abandoning retirees when they need medical coverage the most.
One such case involves a 47-year-old policyholder, whose insurance coverage was only sufficient to cover medical expenses until age 68, according to the insurer. Another complainant, aged 59, finds their insurance premium only covers two more years. To extend coverage, the insurer requires an additional "top-up" of RM8,580 or RM10,800 for protection until age 81 or 90, respectively.
The regulatory authority in Malaysia, Bank Negara Malaysia, is responsible for overseeing the insurance industry and is currently tasked with finding solutions for those affected by sudden increases in insurance premiums or drastic reductions in health insurance coverage duration.
In a recent statement, Sim, a member of the Dewan Rakyat, urged BNM to find solutions for cases before 2019. If the issue is not addressed, more retirees and members of the T20 income group may continue to shift from private to public hospitals.
This shift could have significant implications for the healthcare system, as an increased burden on public hospitals may lead to longer wait times and reduced quality of care for all patients. It is crucial that BNM takes swift action to address these concerns and ensure that policyholders are not left without adequate medical coverage in their golden years.
In conclusion, the situation with investment-linked insurance products before 2019 is a pressing issue that requires immediate attention from Bank Negara Malaysia. The authority must find solutions to protect policyholders and maintain the stability of the insurance industry.
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