This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on Dec 14 - 20, 2015.

Khoo Ai Lin 
Chief marketing officer, 
Prudential Assurance Malaysia Bhd

Question: I have multiple insurance policies, two of which are insurance-linked from the same company. In the event that I need to make a medical claim, can I claim from both policies? Under what circumstances can I activate both policies at the same time?

I am also covered under my company’s group insurance policy. Using the scenario above, can I claim from both the company and individual policies? > Andy, via email

Answer: Medical or hospital insurance reimburses you for the cost of medical care/hospitalisation. Once you have been reimbursed for the hospital bills from one policy, you cannot claim again from the other policy. The reason for this is that medical insurance is to cover one’s medical bills and not to profit from it.

Most medical policies, besides having a lifetime limit, also have an annual limit in their contract. The annual limit is the amount of insurance you can claim within the policy year, and the policy year is normally defined as the period from the commencement or anniversary of the policy to the next anniversary of the policy.

If you made a claim on the policy in the earlier part of the policy year, the annual limit would be reduced by the amount of claim paid, similar to the lifetime limit. If you are admitted again within the same policy year, your annual limit may not be sufficient to pay for the full hospitalisation costs. If that is so, the insurance company will only pay for whatever balance that is available in your annual limit to the hospital and you will have to pay for the remainder.

Let me explain with an example, assuming both of your investment-linked policies have medical riders attached to them. Policy A has an annual limit of RM50,000 and Policy B has an annual limit of RM30,000. If your medical bill amounts to RM75,000, you can choose to claim RM50,000 from Policy A and the remaining RM25,000 from Policy B.

Now, let’s assume Policy A has an annual limit of RM80,000 and Policy B has an annual limit of RM50,000. If your medical bill amounts to RM75,000, you can claim the full amount under Policy A. It is advisable to check with your insurance company and hospital on which policy you can claim from and the billing of hospital/medical expenses as policy terms vary from company to company. 

If you are covered under your company’s group insurance policy, I would advise you to claim from there instead of your individual policy. The reason being that claiming from your individual policy would reduce your lifetime limit. When you have exhausted your lifetime limit, your medical plan will immediately terminate and you may no longer have coverage. If your company’s insurance is insufficient to cover the total medical bill, then you may claim the balance under your individual policy.

It is important to preserve the coverage of your own individual policy because if you are to leave your current job, you will be exposed to periods when you will not be covered by any company insurance and only have your personal policy to depend on. 

It is wise to enlist the help of a professional insurance agent who can advise you on the most comprehensive insurance plan you need to meet your needs. With medical inflation averaging at 12% per annum and as our needs and priorities also change over time, it is prudent to sit down with your insurance agent to review your insurance coverage at least once a year. This will help ensure that you are always adequately insured and give you peace of mind.

Have a personal finance query? Send it to: Consult the Experts, Personal Wealth, 
Level 3, Menara KLK, No.1, Jalan PJU7/6, Mutiara Damansara, 47810 Petaling Jaya, Selangor; Fax: (03) 7721 8018; email: [email protected], Attn: Consult The Experts. Please include your full name, address, contact number and pseudonym, if any.

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