Question 1

I know nothing about insurance. What should I buy first: a medical card, life or critical illness?

Accepted Answer

Most people should start with a medical card, because hospitalisation is the most common risk and the bills can be large. If anyone depends on your income (children, parents, a housing loan), add life cover next. Critical illness cover comes after that, giving you money to live on if a serious illness stops you working. The order can change with your family situation.

Question 2

I earn RM3,000 a month. How much should I spend on insurance?

Accepted Answer

A common guide is around 10% of income on protection, so roughly RM200 to RM300 a month. The priority is using that budget to get an adequate medical card and basic protection, not one expensive plan with gaps. On a tight budget, consider term life and a medical card with a deductible.

Question 3

What is the difference between insurance and takaful? Can non-Muslims buy takaful?

Accepted Answer

Takaful works under Shariah principles: participants contribute to a shared fund to help each other, while conventional insurance transfers the risk to the insurer. Both are regulated by Bank Negara and offer similar protection. Non-Muslims can buy takaful. Compare cover, price and terms rather than religion.

Question 4

Is an investment-linked policy (ILP) or a traditional policy better?

Accepted Answer

Neither is better for everyone. ILPs have flexible premiums and adjustable cover, but insurance charges rise with age and the account value depends on fund performance, so they need regular reviews. Traditional policies have fixed premiums and simpler structures. Choose based on whether you can keep paying and are willing to review the plan.

Question 5

My company provides group insurance. Do I still need my own?

Accepted Answer

Usually yes. Group cover only lasts while you are employed. If you resign, are retrenched or retire, it ends, and by then you may be older or have health conditions that make new cover harder to get. Group limits are often modest too. Keep a basic personal medical card and treat company cover as a top-up.

Question 6

I already have PERKESO (SOCSO). Do I still need private insurance?

Accepted Answer

PERKESO (SOCSO) mainly covers work-related accidents and occupational disease, plus some income support for invalidity and death. It does not pay private hospital bills for ordinary illness. It is a basic safety net, and a private medical card and life cover fill the rest. They work together.

Question 7

Will my premium go up every year? By how much?

Accepted Answer

It depends on the policy. Term life and many traditional plans have fixed premiums for the term. Medical cards and investment-linked plans usually adjust insurance charges with age (often in age bands), and insurers may reprice because of medical inflation. Ask Lulu to show you how the premium changes with age before you buy.

Question 8

When does my insurance start?

Accepted Answer

Generally when the insurer approves your application and receives the first premium. The start date is printed on the policy. Accident cover usually starts from that date, but illness cover such as medical and critical illness has waiting periods.

Question 9

What is a waiting period?

Accepted Answer

A waiting period is the time after the policy starts during which illnesses are not covered. For medical cards it is commonly 30 days for general illness and 120 days for certain specified illnesses such as some cancers and heart conditions. Critical illness plans have their own waiting period. Accidents are usually not affected. Check your policy for the exact days.

Question 10

What if the insurance company goes bust? Does PIDM protect my policy?

Accepted Answer

Malaysian insurers are closely regulated by Bank Negara. If one did fail, PIDM’s Takaful and Insurance Benefits Protection System protects eligible benefits of member insurers up to set limits, for example a cap per policy owner per insurer for life benefits. Check pidm.gov.my for current limits. Great Eastern is a PIDM member.

Question 11

How do I check that an agent is properly registered?

Accepted Answer

Ask to see the agent’s card and agent code, then confirm with the insurer. Life insurance agents can also be checked with LIAM (Life Insurance Association of Malaysia). A legitimate agent never asks you to pay premiums into a personal account. Lulu’s Great Eastern agent code is 6385556.

Question 12

Can I buy insurance from several companies at the same time?

Accepted Answer

Yes. Fixed-benefit cover such as life and critical illness pays out from each insurer. Medical cards pay actual bills, so several cards together still only cover the real cost, which makes duplicate medical cards poor value. Declare your existing policies when you apply.

Question 13

What is the difference between buying online and through an agent? Which is cheaper?

Accepted Answer

Buying online suits simple, standard products such as car insurance, travel insurance and basic term life, and can be slightly cheaper. An agent helps you work out your needs, handles underwriting and health disclosure, and follows up on claims later. For the same policy, the premium through an agent is normally the insurer’s standard price.

Question 14

Can I get my policy in Chinese? I don’t understand the terms.

Accepted Answer

Official policy documents in Malaysia are usually in English or Malay, and those versions are legally binding. Some insurers provide product brochures in Chinese. Lulu can explain the cover, exclusions and waiting periods clause by clause in Mandarin or Cantonese, so you understand before you sign.

Question 15

Can I cancel if I change my mind? How long is the free-look period?

Accepted Answer

Yes. Life and medical policies generally have a 15-day free-look period from the day you receive the policy. Cancel within that time and you get your premium back, possibly less medical check-up costs. Investment-linked plans are refunded based on the unit price at the time. Check your policy for the exact terms.

Question 16

Do I have to name a nominee? Who should I choose?

Accepted Answer

You should. With a nomination, the payout goes straight to the person named without waiting for the estate process. For non-Muslims, nominating a spouse, children, or parents when you have no spouse or children generally creates a trust, so the money is protected from creditors. Other nominees receive the money as executors.

Question 17

Can I claim tax relief on insurance? Which policies, and how much?

Accepted Answer

Yes. Life insurance premiums share a relief limit with EPF contributions (recently up to RM3,000 for life insurance and RM7,000 combined with EPF), and education and medical insurance have a separate relief. Limits can change each year, so check LHDN’s latest rules and keep the premium statement from your insurer.

Question 18

I have a medical history. Can I still buy insurance? Do I have to declare it?

Accepted Answer

Often you can. The insurer may charge more, exclude the condition or ask for a medical check. You must declare it honestly, including past admissions, surgery, long-term medication and test results. A full declaration is what keeps future claims safe.

Question 19

What happens if I don’t declare my medical history? Will claims be rejected?

Accepted Answer

There is a real risk. If the insurer finds an undisclosed material condition at claim time, it may reject the claim, adjust the policy or even cancel it. “I forgot” is often not accepted, so declare more rather than less.

Question 20

Who pays for the medical check-up? Is it compulsory?

Accepted Answer

When the insurer asks for a medical check-up, the insurer usually pays and arranges it at an appointed clinic. Whether you need one depends on your age, the sum assured and your declared history. Young, healthy applicants with moderate cover often don’t need one.

Question 21

Can I buy insurance for my parents or children? What is the difference between policy owner and life assured?

Accepted Answer

Yes. The policy owner owns the policy and pays the premium. The life assured is the person covered. Parents can insure their children, and adult children can insure their parents, but the life assured must meet the entry age and underwriting. Older parents may face higher premiums or exclusions.

Question 22

I’m self-employed, drive Grab or run a business, with no EPF. How should I protect myself?

Accepted Answer

With no employer benefits, build your own: a medical card first, then life and critical illness or personal accident cover to protect your income if you can’t work. E-hailing and p-hailing drivers are generally also required to join PERKESO’s self-employment scheme (SKSPS). For retirement, consider voluntary EPF contributions (i-Saraan) or a Private Retirement Scheme.

Insurance basics: 22 questions first-time buyers ask