If you’re not very familiar with insurance, find out the four types of insurance available in Malaysia.

Before the Covid-19 pandemic started, not many Malaysians take having insurance seriously. However, things have changed since, with more people purchasing too many insurance policies and products due to insecurity, which is understandable considering the current situation. 

The ongoing pandemic has everybody feeling insecure, which prompted them to get various insurance, not realising that some of them may not be beneficial.

See Also: Best Car Insurance in Malaysia (2022)

“Many do not understand the plans they buy into, and many buy the wrong type of insurance such as investment-linked ones,” said Robert Foo, CEO of MyFP Services Sdn Bhd, in a StarBiz report.

Four types of insurance you can get in Malaysia.

There are at least four types of insurance that you can get in Malaysia. They come with various benefits, monthly or annual premiums, policies, and terms put in place, meaning that they are not all created equal, even if they fall under the same type.

And contrary to popular belief, insurance in Malaysia is actually quite affordable, depending on your plans. For example, you can even get life insurance from as low as RM20 a month these days, which is excellent for students aged 18 and above or young 20-somethings entering the workforce who may not have much savings.

 

 

According to Bank Negara Malaysia, there are at least 22 licensed insurance companies and takaful operators, and they are: 

• AIA General Berhad
• AIG Malaysia Insurance Berhad
• AXA Affin General Insurance Berhad 
• Allianz General Insurance Company (Malaysia) Berhad
• AmGeneral Insurance Berhad
• Berjaya Sompo Insurance Berhad
• Chubb Insurance Malaysia Berhad
• Danajamin Nasional Berhad
• Etiqa General Insurance Berhad
• Great Eastern General Insurance (Malaysia) Berhad
• Liberty Insurance Berhad
• Lonpac Insurance Berhad
• MPI Generali Insurans Berhad
• MSIG Insurance (Malaysia) Bhd
• Pacific & Orient Insurance Co. Berhad
• Pacific Insurance Berhad
• Progressive Insurance Berhad
• QBE Insurance (Malaysia) Berhad
• RHB Insurance Berhad
• Tokio Marine Insurance (Malaysia) Berhad
• Tune Insurance Malaysia Berhad
• Zurich General Insurance Malaysia Berhad

That’s quite a selection to choose from. Whichever insurance company or takaful operator you choose, the type of insurance policies and products you also pick matters. To prevent you from purchasing the wrong one, let’s find out more about the four types of insurance that are available in Malaysia:

1. Health/medical insurance

Health insurance and life insurance are NOT the same. Health insurance helps in the case of an emergency where you are hospitalised, requiring proper medical treatment and recovery.

You can either opt for a medical card or critical illness coverage or even both if you think you need them. A medical card covers major medical costs that you may otherwise be unable to afford to pay. At the same time, critical illness coverage gives you financial security if your medical treatment fees are exorbitant.

2. Life insurance

Life insurance is financial protection against unfortunate events, such as sudden death, total permanent disability, critical illness, or terminal illness. For life insurance, you can either opt for term life insurance or whole life insurance.

Term life insurance is financial protection for your family in case the unexpected happens to you. If you died or are facing total permanent disability, critical illness, or terminal illness, cash benefits will usually be paid out in lump sum to your beneficiaries.

Meanwhile, whole life insurance provides stable life-long protection where your beneficiaries will receive a lump-sum payment in your demise or when you’re afflicted with a total permanent disability.

3. Property insurance

Also known as general insurance, property insurance covers your personal assets like your house or your vehicle. There are three kinds of policies for home insurance: householder policy, homeowner policy, and fire policy.

While each provides coverage for the damage or loss of your house, they’re not one-size-fits-all kinds of policies, as coverage depends on what kind of causes led to the loss or damage of your home.

4. Protection insurance

Personal accident insurance and travel insurance fall under this type. Accidents could occur anytime to anyone. In case of your demise, disability or injuries, rest assured that you or your loved ones will be compensated, lump sum.

Meanwhile, your happy moments could also turn into your worst nightmare. When it comes to travelling, there will always be risks involved, such as accidental death, total permanent disability, accident or illness that requires costly treatment, repatriation and evacuation for medical emergencies, and inconveniences like flight delays or lost luggage. Travel insurance could protect you from these risks.

5. As for motor insurance…

All vehicle owners must get motor insurance under the Road Transport Act 1987, be it a car or a motorbike.

There are a few types to choose from theft and third party fire coverage, third party coverage, and comprehensive coverage. Here’s the lowdown on each of them:

i) Comprehensive coverage (or first-party policy)
The most recommended coverage as it covers pretty much everything, in the event where there’s damage to your vehicle because of accident, loss or damage to your car due to theft or fire, damage to another party’s property, and injury or death to another party.

It also offers optional benefits (subject to agreement), for example, Personal Accident and Medical Benefits for driver and/or passengers, windscreen breakage cover, or coverage for damage to your vehicle caused by natural disasters or civil commotions like riots.

ii) Theft and third-party fire coverage (or second-party policy)
This coverage protects you in the event of loss or damage to your vehicle caused by theft or fire, damage to another party’s property, and injury or death to another party.

iii) Third-party coverage (or third-party policy)
This coverage only covers damage to another party’s property and injury or death to another party.

Generally, don’t worry about whether or not you can afford to purchase insurance as nowadays, you can customise most insurance plans depending on your budget and needs. So tailor it exclusively with flexible coverage terms and affordable premiums. 

Remember to compare the benefits, terms, and policies when insurance shopping. To make things easier, simply use a comprehensive online marketplace for insurance to seek advice, compare insurance, and get free quotes instantly without the hassle of going from place to place.

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