Key takeaways
- A standalone medical card is a yearly renewable policy whose premium rises in age bands, while an ILP medical card is a unit-deducting rider whose charges come out of your policy's fund every month.
- When an investment-linked policy lapses, is surrendered or is terminated, its medical rider ends with it, so a fund that runs dry can cost you your medical card.
- Since 1 July 2019 Bank Negara has required insurers to test each ILP's sustainability at least once a year and, if it falls short, to tell you the top-up needed and your other options.
- In an ILP's first 3 years only 60% of each regular premium must go into your fund (80% in years 4 to 6, 95% in years 7 to 10, 100% from year 11), so early surrender returns little.
- Every individual medical card PDS in Malaysia must project your premium or insurance charges at the industry medical inflation rate and at 10% a year, for the next 20 years.
- For YA 2025, medical insurance counts towards an RM4,000 education and medical relief, and for a rider only the rider's premium qualifies (LHDN Form BE notes).
What is investment-linked insurance, and how is a standalone medical card different?
Both give you a medical card that pays hospital and surgical bills. The difference is how the cover is built and paid for, and that decides what happens to your cost at 50, 60 and 70.
A standalone medical card is a medical policy on its own. Great Eastern Life's Great Medic Shield 2 product disclosure sheet is a typical example: one year of cover at a time, renewable up to 99 years next birthday, with a premium set by your age band, gender and occupation at every policy anniversary.
An investment-linked (ILP) medical card is a medical rider on an investment-linked life policy. Part of your premium buys units in a fund you choose, and every month the insurer cancels units to pay the insurance charges for the life cover and each rider. The GREAT MediValue brochure describes it as a unit deduction medical rider attachable to selected regular premium investment-linked plans.
| Feature | Standalone medical card | ILP medical rider |
|---|---|---|
| What you buy | Medical cover only | A life policy with a fund, plus a medical rider (often other riders too) |
| How medical cover is paid for | A yearly premium for the medical policy itself | Insurance charges taken from your fund units every month |
| How the cost rises with age | In steps, often by five-year age bands | Gradually, month by month |
| Investment risk | None | Yours: a weaker fund pays for fewer months of charges |
| What ends the medical cover | Not paying its own premium (Great Medic Shield 2 lapses after a 30-day grace period) | The basic life policy lapsing, being surrendered or terminated, including when the fund cannot pay the charges |
| Agent's commission | Shown in the PDS: 15% of each year's premium on Great Medic Shield 2 | Part of the basic policy's premium, shown in the sales illustration |
| Other cover included | Medical only, plus small fixed benefits | Life cover, and any critical illness or other riders you add |
An article by the industry associations LIAM, PIAM and MTA on InsuranceInfo sums it up: with a typical standalone policy, premiums go up often according to five-year age bands, while on a unit-deducting rider the monthly cost increases gradually throughout the term.
Which costs more over time: a standalone or an investment-linked medical card?
Neither is cheaper for everyone, because they charge in different ways. Three things decide it.
- The medical cost itself rises in both. Under Bank Negara's medical and health insurance policy document (paragraph 13.6), every individual medical card PDS must project the premium or insurance charges at the industry average medical inflation rate and at 10% a year, at five-year intervals for the next 20 years. The industry rate used from September 2025 to June 2026 was 7%, and it is updated every 1 July. Compare those projections, not today's monthly figure.
- An ILP adds life cover and fees. You pay for the basic life cover, the medical rider and any other riders, plus fund management and policy fees. That is good value if you need the life cover anyway, and an extra cost if you do not.
- An ILP's early premiums are not all invested. Bank Negara's policy document on investment-linked business (paragraph 15) only sets a minimum share of each regular premium that must go into your fund:
| Year of premium payment | Minimum share allocated to your fund |
|---|---|
| Years 1 to 3 | 60% |
| Years 4 to 6 | 80% |
| Years 7 to 10 | 95% |
| Year 11 onwards | 100% |
So the fund builds slowly at first, and surrendering an ILP in the early years usually gives back far less than you paid. A standalone plan has no fund: each year's premium buys that year's cover, and if you cancel Great Medic Shield 2, part of the last premium is refunded only if you have not claimed on the plan.
A worked example: what happens inside an ILP as you get older
Example only, with made-up round numbers to show the mechanism. It is not the price of any plan. Assumptions: you pay RM300 a month until a premium term ending at 70, all of it goes into the fund (past year 11), the total monthly charges for life cover, the medical rider and fees are as shown, and fund growth is ignored.
| Age | You pay each month | Charges taken from the fund each month | What happens to the fund |
|---|---|---|---|
| 40 | RM300 | RM120 | Grows by RM180 a month |
| 50 | RM300 | RM220 | Grows by RM80 a month |
| 60 | RM300 | RM400 | Falls by RM100 a month |
| 72, premium term over | RM0 | RM700 | Falls by RM700 a month |
Up to your 50s the surplus builds the fund. Once the charges pass your premium, the fund pays the difference, and after the premium term it pays everything. If the fund holds RM50,000 at 72 and charges keep rising, it lasts less than six years. That is the point where the annual statement says the cover is no longer sustainable and asks for a top-up. On a standalone card, the same rise in medical cost simply shows up as a higher renewal premium each year.
This gap is real on actual products: on GREAT MediValue, premiums are payable up to 70, 75 or 80 years next birthday, while the cover can run to 80 or 100 (GREAT MediValue PDS).
What happens when ILP charges go up or the fund runs low?
This is where most of the worry comes from, so it helps to know the rules. Since 1 July 2019, Bank Negara has required insurers to test the sustainability of every investment-linked policy, and since 1 January 2020 the annual statement must tell you how long your cover is expected to last, with options to manage it. The current rules are in the 2023 policy document on investment-linked business:
| Rule (paragraph) | What it means for you |
|---|---|
| At sale, the premium must be priced so the policy is expected to last to the end of its term (16.1) | The plan you sign should be sustainable on the insurer's assumptions |
| Sales illustrations show two investment returns: 2% and 5% a year (Appendix template) | Read the 2% column: that is the cautious case |
| A sustainability test at least once a year, and before a partial withdrawal, adding a rider or extending the term (16.2, 16.3) | Adding a medical rider later can lead to a higher premium |
| If cover will not last, the insurer must explain why and recommend the top-up needed, with alternatives (16.7) | You get a figure, not just a warning |
| When insurance charges are raised: on policies that let the insurer adjust the premium, the premium must rise to match; on policies sold before 1 January 2020 without that clause, the insurer must recommend a top-up (16.8) | Newer ILPs show medical repricing as a premium increase; older ones show it as a fund falling faster |
The alternatives Bank Negara lists are reducing coverage, shortening the coverage term, removing riders, or letting the fund pay the higher charges. If you pick the last one, the insurer must warn you that the fund will run down faster (paragraphs 16.9 and 16.10).
Standalone cards have their own rules. Great Medic Shield 2's PDS says its premium is not guaranteed and can be revised with at least 3 months' written notice, for all policyholders whatever their own claims. For any medical card, standalone or rider, Bank Negara does not allow an insurer to refuse renewal just because you claimed, limits an individual loading after claims to 25% of the earlier rate (beyond that the insurer must review the whole portfolio's rates instead), and requires 30 days' written notice before a yearly renewable plan is renewed on changed terms (MHIT policy document, paragraphs 8.19 to 8.21).
If your letter is about repricing, my guide on what to do with a medical card premium increase letter goes through Bank Negara's interim measures and your options step by step.
Standalone or investment-linked: which one suits you?
From what I see in policy reviews, the answer depends less on the product and more on your stage of life and how closely you will look after the policy.
| Your situation | Usually fits better | Why |
|---|---|---|
| You already have enough life cover and only need a medical card | Standalone | You pay for medical only, and can review or replace it on its own |
| You need life, critical illness and medical cover and prefer one policy | ILP | One premium covers everything, and the fund can absorb some of the rising charges if you review it yearly |
| Irregular income, such as self-employed or commission-based work | Standalone, or an ILP with only the riders you need | Great Eastern's own brochure warns that buying too many unit deduction riders may deplete the fund units |
| You want cover to 80 or 100 but plan to stop paying premiums at retirement | ILP, planned for it | The fund can keep paying charges after the premium term, but only if it is big enough at the 2% illustration |
| You do not want to read annual statements or watch a fund | Standalone | An ILP needs a check every year |
For Great Eastern Life specifically, GREAT MediValue is an investment-linked rider with an RM3,000,000 annual limit and no lifetime limit, while Great Medic Shield 2's PDS shows a standalone plan with an RM100,000 or RM150,000 annual limit and an RM300 deductible per disability. My Great Eastern medical card guide covers the current plans; ask me whether a standalone plan is open for your age before you plan around one.
Whichever structure you choose, the benefits still need checking: annual limit, room rate, deductible and waiting periods. My medical card checklist walks through each one.
Already have an ILP medical card? What to check every year
- Find the sustainability line in your annual statement. How long is the cover expected to last at the current premium? If it ends before the age you need, act now rather than at 65.
- Compare the premium term with the coverage term. Any years of cover after your last premium are paid from the fund.
- Count your riders. Every unit-deducting rider draws on the same fund. Removing one you no longer need is one of the options Bank Negara lists.
- Do not surrender or let the policy lapse to start fresh. The medical rider ends with the basic policy. A new medical card means new underwriting, new waiting periods (30 days for illness and 120 days for specified illnesses such as hypertension and diabetes on Great Eastern's plans) and exclusions for anything that has started since you first bought.
- Before a partial withdrawal, ask what it does to sustainability. The insurer must test it and tell you before the withdrawal goes through.
- Get the tax portion right. LHDN's Form BE notes for YA 2025 allow up to RM4,000 a year for education and medical insurance together, and where the medical cover is a rider, only the rider's premium counts. This is general information, not tax advice.
Just bought one? You have 15 days after the policy is delivered to cancel it. For an ILP, the insurer refunds the unallocated premium, the value of your units and the charges already deducted, less any medical examination cost (paragraph 19 of the investment-linked policy document).
Not sure which one fits you? How I can help
Many of the questions I get about ILP medical cards start with a yearly statement or a renewal letter that is hard to read. If that is you, WhatsApp me:
- a photo of your latest annual statement or renewal letter, from any insurer;
- the ages of the people covered and any health conditions you know about;
- a monthly amount you are comfortable paying for the long term;
- any company medical cover you have now.
I will show you how long your current cover is expected to last, whether a top-up, fewer riders or a different structure makes more sense, and what you would lose by switching. If your plan is fine as it is, I will tell you. You can also start with a free policy review. I am based in Seri Kembangan and help families across Kuala Lumpur and Selangor in Mandarin, English or Cantonese, with no hard selling.