Key takeaways
- PERKESO's Employment Injury Scheme covers accidents at work, on the commute and occupational diseases, but not private hospital bills for ordinary illness, so a medical card is usually the first policy to buy.
- PERKESO's Invalidity Pension needs at least 24 monthly contributions; if illness stops you working before that, you only get the contributions back with interest as a one-time grant.
- Under the Employment Act 1955 you get 14 days of paid sick leave a year in your first two years with an employer and up to 60 days if hospitalised, but leave pays your salary, not the hospital.
- Since Bank Negara's 2024 rules, new individual medical plans carry a co-payment of at least 5% or a RM500 yearly deductible, and waiting periods are capped at 30 days (120 for specified illnesses).
- Bank Negara's base medical plan (MediAsas) is due in early 2027 with a RM100,000 annual limit, and existing policyholders can switch to it with the same insurer without new underwriting, so there is no reason to stay uninsured until then.
- Investment-linked or savings plans, education plans and MLTA can wait until you have the budget, a child or a housing loan; EPF is retirement savings, not insurance.
What do SOCSO, EPF and my employer already cover?
Your first payslip already carries some protection. Before you buy anything, it helps to know exactly what these schemes pay and what they do not, because the gaps they leave are what your own insurance should fill.
| What you already have | What it pays | What it does not pay |
|---|---|---|
| PERKESO Employment Injury Scheme (you pay 0.5% of your wages and your employer 1.75%; the same contributions also cover the Invalidity Scheme) | Accidents at work and on the way between home and work, and occupational diseases: free treatment at PERKESO panel clinics or government clinics and hospitals, plus 80% of your average daily wage (RM30 to RM158.67 a day) while on MC of at least 4 days | Illness that has nothing to do with work, and private hospital bills for it |
| PERKESO Invalidity Scheme | Invalidity or death from any cause outside work, 24 hours a day: a monthly pension of 50% to 65% of your average wage, at least RM550 | The pension needs at least 24 monthly contributions; before that you only get a one-time grant of the contributions paid by you and your employer under the scheme, with interest |
| EIS (you and your employer each pay 0.2%) | A Job Search Allowance for 3 to 6 months after loss of employment such as retrenchment | Voluntary resignation, the end of a fixed-term contract, dismissal for misconduct; nothing for illness |
| LINDUNG 24 Jam (optional for Malaysian employees; if you opt in, you pay the whole contribution, starting at 0.75% of wages and rising in phases) | Accidents outside work, 24 hours a day, within Malaysia | Illness such as fever, diabetes or high blood pressure, and accidents overseas |
| Paid sick leave, Employment Act 1955 section 60F | 14 days a year while you have worked for the employer for less than two years, and up to 60 days a year if hospitalisation is needed: your salary keeps coming | Not one ringgit of the hospital bill |
| A company group medical or life plan (if your employer has one) | Hospital bills, or a lump sum on death or disability, within the plan limits | It is usually the employer's policy for full-time staff who are actively at work, renewed every year, so it stays with the job, not with you |
EPF is retirement savings, not insurance: you put in 11% of your salary and, on a salary of RM5,000 or less, your employer adds 13% (12% above RM5,000), according to KWSP. PERKESO contributions have been capped at a wage of RM6,000 a month since 1 October 2024. My PERKESO (SOCSO) guide explains how to claim from it.
One line in the table surprises most people in their first job: PERKESO's Invalidity Pension needs at least 24 months of contributions. If a serious illness stopped you working in your first year, the scheme would return the contributions with interest as a one-time grant, not pay a monthly pension. That is exactly the gap critical illness and disability cover is for.
Read the exclusions of your company plan too. Great Eastern's own description of its group hospital plan, for example, excludes pregnancy and childbirth and dental treatment, does not cover a condition that began before your cover started until you have been insured under the contract for 12 months, and excludes specified illnesses in the first 120 days. Its product disclosure sheet also states that it is bought by the employer for full-time, actively-at-work employees and renewed yearly; unless it is renewed, the cover stops.
Which insurance should I buy first? The order I suggest
There is no single right answer for everyone. But for a single person starting a first job in the Klang Valley, this is the order I usually walk through. Each step fills one of the gaps in the table above.
| Order | Cover | Why at this stage | When to buy |
|---|---|---|---|
| 1 | Medical card (hospital and surgical) | Illness in a private hospital is the gap PERKESO and sick leave leave open, and you can only buy it on today's health | Now, while you are healthy |
| 2 | Critical illness or disability cover | Pays a lump sum to replace income if a serious illness or disability stops you working; PERKESO's pension needs 24 months of contributions | Once the medical card is settled, or together with it if the budget allows |
| 3 | Term life insurance | Pays your family if you die; it matters once someone depends on your income (parents you support, a spouse, a loan) | When someone depends on you, or when you sign a housing loan |
| 4 | Personal accident | A lump sum for accidental death or disability; some plans also pay accident medical bills | Optional; more useful if you drive a lot or your work is physical |
| Can wait | Savings or investment-linked plans bought for returns, education plans, MLTA | They solve problems you do not have yet | Later, when budget, children or a house come along |
If you already give your parents money every month or share the household bills, step 3 moves up: a modest term life policy makes sure that support continues if something happens to you.
A medical card and critical illness cover solve different problems. The medical card pays the hospital. Critical illness cover pays you a lump sum when you are diagnosed with a covered illness, which you can use for rent, PTPTN repayments or living costs while you recover. Under Bank Negara Malaysia's rules, the survival period of a critical illness plan cannot be longer than 30 days after diagnosis. How much cover to choose is in my critical illness guide.
One more thing: in the first year or two, income is often not settled yet and many people change jobs. Choose a first policy you can keep paying after a job change, rather than buying everything at once. Cover can grow with your salary; a policy that lapses has to be bought again later at an older age and on whatever your health is then.
Why the medical card comes first, and whether to wait for MediAsas in 2027
Three reasons, all from the rules rather than from sales talk:
- Your health today decides your cover. Medical cards generally exclude pre-existing conditions: illnesses you already had, were treated for, were advised to treat, or had clear symptoms of before the cover started. A condition diagnosed at 24 is excluded from a card you buy at 25, but covered (after the waiting period) by a card you bought at 23.
- Waiting periods start on the day you are covered. Bank Negara caps the general waiting period at 30 days (it does not apply to emergency treatment after an accident) and the extra waiting period for specified illnesses at 120 days. The earlier you start, the sooner they are behind you.
- Hospital bills are the hardest thing to save for on a starting salary. Paid sick leave keeps your salary coming, but the private hospital still sends you the bill.
A few recent rules every first-time buyer should know:
| Rule | What it means for you |
|---|---|
| Bank Negara's MHIT policy document (issued 2024) requires every new individual medical plan to have a co-payment of at least 5% of the claim or a RM500 deductible a year, and insurers must offer a range of levels | You pay a small part of each claim yourself. Choose a level you could pay from savings without stress. |
| Bank Negara's base medical plan, named MediAsas, is due for sale in early 2027: a standalone plan with an annual limit of RM100,000, open to people up to age 70 and covering to age 85; EPF members under 55 will be able to pay its premiums from Akaun Sejahtera | A simpler option is coming, but Bank Negara says existing policyholders can switch to it with the same insurer (if that insurer takes part) without new underwriting or waiting periods. Waiting until 2027 only leaves you uncovered in the meantime. |
| Until the end of 2026, insurers limit yearly premium increases caused by medical inflation to no more than 10% for most policyholders | Before you sign, ask how the premium is expected to change as you get older. |
When you compare plans, look at the annual limit, the room and board amount, the co-payment or deductible, the panel hospitals near your home and office, and whether it is a standalone medical card or a rider on an investment-linked policy. My medical card checklist goes through each point.
How much of my salary should go to insurance? A worked example
There is no official percentage. What I look at is the amount you can keep paying every month for many years, even in a tight month, because a policy that lapses in year three protects nobody. A worked example shows what is already deducted from your pay and what the insurance tax relief is really worth.
| Item (example, assumed figures) | Example figure | Basis |
|---|---|---|
| Assumed monthly salary | RM3,500 | Example only, no bonus |
| Your EPF (11%) | RM385 | KWSP |
| Employer EPF (13%, salary RM5,000 or less) | RM455 | KWSP |
| Your SOCSO (0.5%) | About RM17.50 | PERKESO; the exact amount follows its contribution table |
| Your EIS (0.2%) | About RM7 | PERKESO; the exact amount follows its contribution table |
| Yearly salary | RM42,000 | 12 months of RM3,500 |
| Individual relief | RM9,000 | LHDN, YA 2025 |
| EPF relief | RM4,000 (the cap; you actually paid RM4,620) | LHDN, YA 2025 |
| Chargeable income before other reliefs | RM29,000 | RM42,000 minus RM9,000 minus RM4,000 |
| Tax rate on this band | 3% (RM20,001 to RM35,000) | LHDN rate table |
| Income tax before other reliefs | RM420 | RM150 on the first RM20,000, plus 3% of RM9,000 |
| Tax saved for every RM1,000 claimed under medical insurance relief | RM30 | Medical and education insurance relief, capped at RM4,000 |
The point of the example: at a starting salary, insurance tax relief is a small bonus. The relief is real (LHDN's YA 2025 table allows life insurance premiums up to RM3,000, inside a RM7,000 limit shared with EPF, and medical or education insurance up to a separate RM4,000), but buy a policy for the cover, not for the tax. This is general information, not tax advice; check LHDN's latest figures when you file.
In practice: settle the medical card first and pick a deductible or co-payment you can afford; add critical illness cover when your salary rises; and review everything once a year, or whenever you change jobs or get a raise.
What can wait, and the first-job mistakes I see most
| Can wait | Why it can wait | When to look again |
|---|---|---|
| Investment-linked or savings plans bought mainly for returns | Returns are not guaranteed, and a first salary is better spent on protection and an emergency fund first | Once your protection and emergency fund are in place |
| Education plan | Only needed when you have a child | When you plan a family |
| MLTA or MRTA | It protects a housing loan you do not have yet | When you sign a housing loan |
| Car insurance | Only when you own a car; then it is required before the car goes on the road, and third party cover is the minimum on sale | When you buy your first car |
| A large whole life policy | Life cover matters most once someone depends on you | When you marry, have children or start supporting your parents |
The first-job mistakes I see most often:
- Counting on the company plan alone. It belongs to the employer and stops being yours when you change jobs; by then you are older and may have a medical history, which makes buying harder.
- Buying a savings plan first and having no medical card. When you are admitted to hospital, the medical card is what you need first.
- Leaving out health history on the proposal form. Declare past treatment, tests and long-term medicine, even if they seemed minor. A good share of the claim disputes I have seen started with something that was not declared.
- Not knowing about a policy your parents bought for you. A medical card reimburses the actual bill, so a second one adds little unless it raises your limits. Find the old policy first.
- Buying in a hurry and regretting it. Great Eastern policies have a 15-day free-look period from the day you receive the policy contract; cancel within it and the premium is refunded, subject to the free-look terms.
My parents bought a policy for me years ago. What should I do now?
Starting work is often the first time people ask their parents, "Do I actually have insurance?" If your parents bought a policy for you years ago, do not rush into a new one. Go through these steps first:
- Find the policy. Ask your parents for the policy number, the policy contract, or the name of the agent who sold it.
- Check who is the policy owner and who is the life assured. Usually a parent is the owner and you are the life assured, which means your parent, not you, makes decisions such as nomination and surrender.
- See what it really covers. Is there a medical rider? What is the annual limit? Until what age does the cover run? Is it a standalone medical card, or attached to an investment-linked plan?
- Agree who pays from now on. Some families hand the premium over to the child once the child starts working, and the policy simply carries on.
- Fill the gaps instead of starting from zero. If the old plan has a low limit, you can top it up or add a standalone medical card on top.
Even if the original agent has stopped working, the policy stays valid as long as the premiums are paid. You can ask a new servicing agent to look after it.
How I can help when you start working
I am Lulu Loke, a Great Eastern agent and Life Planning Advisor who has served families in Kuala Lumpur and Selangor for 13 years, mostly around Seri Kembangan, Serdang, Puchong and Cheras. When someone in their first job contacts me, I start with what they already have: the deductions on their payslip, the company plan, and any policy their parents bought. Then I explain the gaps in Mandarin, English or Cantonese, and we decide together what is worth buying now and what can wait.
- A free policy review of your company plan and the family policies, side by side
- Plain explanations of exclusions, waiting periods and co-payments before you sign
- Help with claims later, so you are not handling the hospital or the forms alone; so far I have helped clients with about 110 claims
No hard selling: if the honest answer is that you are covered enough for now, I will tell you so. WhatsApp me at 016-914 0086 with your age, your job and what your company provides.