3 Reasons to Not Depend Solely on Your Employee Medical Insurance

Medical and Term Life insurance are slowly catching on with Malaysians but some still heavily rely on employer provided insurance. Will it be enough in times of health and financial crises?

We all know that one person in the family or within individual social circles that for some odd reason best known to themselves; just does not believe in term life insurance.

One may have many reasons why they oppose having insurance, but the most common is the belief that mandatory employee medical coverage suffices.

Today, we uncloak the veil that keeps hidden the reality surrounding employer provided insurance versus buying your own – and reveal reasons why you should not solely depend on the former.

Limited Coverage and Inflexible Terms

In all fairness, the range of employee medical insurance is vastly subjective as its coverage possibilities differ from organisation to organisation.

Some companies offer better benefits whilst some others nurse only the basic needs of an employee.

Whatever the organisation decides, you're stuck with whether or not it's enough to serve your medical needs.

Assuming you were diagnosed with chronic kidney disease which requires you to undergo dialysis treatment of up to four times a week. Mind you, these treatments don't cost a red note or two – they're about RM250 – RM300 each visit.

This adds up to about RM1,000 – RM1,200 per week; taking your monthly tally to about RM4,000 – RM4,800. Mathematically, you would require an employee policy with a coverage of up to RM60,000 per year to make it by the skin of your teeth. This also depends on whether or not the company policy covers outpatient dialysis treatment!

What if further unfortunate events befall you, forcing you to be admitted – would the employee insurance be able to cover hospitalisation and medical costs on top of your already blinking employee coverage?

Having a medical card insurance policy can be designed to cover all you need at a threshold that is acceptable for any of your ailments. Even if you don't use it and opt to use your employer provided coverage, you can still keep your own policy as a buffer should you need extra funds.

Being able to tailor make your own policy also helps you to add on extras for your family. If you need coverage for your spouse and children - a personal policy will allow you to add or remove riders as and when necessary.

Lacks Mobility

The header may be misleading, but bear this in mind – when you walk out on the company, you walk out on everything else that comes with it, including your employee insurance.

What does that leave you with? A very big problem. Employee insurance only goes as far as the list of names on payroll and you now equal a person who rock climbs without a safety harness, risking everything from a mere splinter to a very a painful fall.

Some have gone unemployed for months before they get called up for a job, while others jump on board another ship immediately, but it certainly does not write off any possibility of unfortunate events between ship jumping.

Should an unexpected misfortune happen to you during this employment down time, you risk depleting your savings account and worse, rubbing the burden off on friends and family around you.

Having a back up plan is great – a back up plan that sticks with you on the other hand, has value beyond the measure of any wealth. Getting your own medical card insurance protects you through any circumstance life flings at you, but employee insurance only goes as far as your letter of offer.

Zero Future Savings

What's better than being insured for a reasonable monthly commitment? Getting to collect the pot of gold at the end of the tunnel of course!

Along with your medical coverage; why not opt to have term life insurance added on or as an additional policy to your medical card? Take advantage of the rider options that come along with your medical insurance plan to add on life insurance or even investment linked insurance if the idea appeals to you.

You cannot negotiate group insurance plans with your employer but you can if you've taken out a policy of your own.

With investment linked life insurance, you can look forward to swelling that retirement fund of yours or opt to inject the cash into more family driven commitments like setting up a college fund or further investment.

The Conclusion

We're not denying the benefits of employee insurance – in fact, having it increases the odds of you getting a good policy of your own if you apply. However, it is important to always have plan B. While you're at it - familiarise yourself with your employee cover so you know just how much coverage you have. This will help you decide how much to take on you're own.

Whats even more important is that we come to terms with reality and realise that loved ones – friends and family will be sucked into the dragnet of unfortunate events if we are not careful. Always better being safe than sorry.

If you're unsure which product is for you; check out our comparison pages for both medical card insurance and term life insurance. There's bound to be something suitable and you can then tailor the details further with your agent.


Agree or disagree with this post? Questions? You also have your word!


    Having your own insurance while you are being employed is a good backup. But also consider this, you are unlikely to have to use it since your first choice is your employment medical coverage except for some circumstances not covered as stated above. Be aware that medical insurance premiums goes up with inflation and with your age. The older you are the more you pay. If you are under 60 yrs of age, the insurance premium is probably less than RM5000 per year. When you reach beyond the age of 60, the annual insurance premiums goes up exponentially and can be prohibitively expensive. The annual premiums can be more than RM20,000 at that age. Now I ask you, at this age when you have already retired without income and solely dependent on your savings and EPF, can you still afford the expensive premiums? I know my neighbor who is a senior citizen cancel his medical policy because she simply cannot afford the premiums. She now have to depend on government hospitals for any hospitalization. Same thing with my parents who are already in their 80s. They only go to government hospitals and clinics for treatment. Under this circumstances, it is better to save RM20,000-30,000 in premiums, invest the money and self insure.

    • nic

      Start to buy insurance in early age to accumulate fund value to support part of the high premium in retirement age. Most of the medical card cover up to age 100 nowadays.

    • jess

      Lets say company gives a very good insurance coverage and too bad something happened, a chronic disease. if one quits this job, this coverage will no longer continue right?

      • RinggitPlus

        Hi Jess,

        You're right about this. Which is another reason to have your own medical insurance if you can.

      • jess

        if company has a fantastic insurance coverage, but along the way succumbed to a chronic life long disease, lets say, decided to quit the job half way. with this pre existing disease, can still buy own insurance that covers this disease, or no choice but to force yourself to stay in the company to stay covered?

        • RinggitPlus

          Hi Jess,

          You can still have an additional plan on top of your current one as long as you can afford it.

        • bigpotato

          referring to @Jess comment above, afaik, if you have a pre-existing disease, no insurer will cover it under a new policy. they will almost always exclude that cover as you are almost 100% guaranteed to make a claim there. that's why we say must get the insurance policy in place BEFORE any such diseases are detected, the younger the better.

          • anynonymous

            true story: my brother relied on his company insurance until his baby came into the world and realised the important..

            • johny

              i once worked in a big company and their employee coverage was as good as a personal insurance, but i think nobody should take the risk.. how good the employee coverage is.. its my opinion

              • Bii

                it depends on which company though...some MNCs offer really got insurance coverage to their employees...but at a safe side, I do agree we should at leave buy a personal medical card and term life insurance.

                • clicker

                  Gosh.... of course we need to buy our own personal medical card.. No matter how good an employee insurance be, it can only cover us till we retire.. what about after that? are we even thinking to just get our own medical card after we retire? Do we even have the health to buy it is another questions...

                  • cute-cute

                    Yes, it is always better to have Plan B. When you are healthy, you might not realize the importance of insurance (PA, medical card, savings plan, endowment plan etc). By the time when you realize, it might be too late especially when you are diagnozed with certain diseases.