Medical & Health Insurance in Malaysia

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Questions and Answers

What is a limitation applied to the core benefits of the Hospital and Surgical Insurance (HIS) policy?

Rejection limit

Stop cover

Deferred cover

All of the above (correct)

What is the benefit provided by the Hospital and Surgical Insurance (HIS) policy?

Reimbursement of medical expenses (correct)

Lump sum payment upon illness

Only daily allowance upon hospitalization

Annual dental treatment expenses

What is a condition for the insurer to renew a policy?

Refuse to increase the amount of cover

Renew the policy upon the renewal date (correct)

Unilaterally terminate the policy

Reject the policy renewal

What would prompt a medical and health insurance underwriter to seek further medical investigation and/or documentation from the proposer?

All of the above Signup and view all the answers

What must be disclosed to a person invited to enter into a contract of insurance?

Material fact Signup and view all the answers

What is an agent's right to in relation to the principle?

Indemnity Signup and view all the answers

Which of the following is NOT a valid way to terminate an agency?

Extension Signup and view all the answers

How are insurance agencies typically created in Malaysia?

Only through appointment by express agreement Signup and view all the answers

What is typically included in an employee's remuneration package?

Group medical and health insurance policy Signup and view all the answers

Which of the following is NOT typically covered by a standard Hospital & Surgical Insurance policy?

Organ transplant Signup and view all the answers

What do females have a higher rate of compared to their male counterparts in medical and health insurance?

Critical illness Signup and view all the answers

What is the primary purpose of the Guideline on Medical & Health Insurance Business and Guidelines on Product Transparency and Disclosure issued by Bank Negara Malaysia?

To reduce mis-selling and misrepresentation to consumers Signup and view all the answers

What is NOT required to be disclosed as a pre-existing condition when proposing a medical health plan?

Incident of ankle sprained 6 months prior to proposal Signup and view all the answers

Which of the following is NOT a Benefit Limitation?

Reduction of the amount of premium payable Signup and view all the answers

What is the purpose of underwriting in insurance?

To avoid anti-selection when dealing with sub-standard risks or high-risk individuals Signup and view all the answers

What is the duty of an insurance agent when dealing with a proposer?

To ensure the proposer discloses all medical history Signup and view all the answers

What is a common method of underwriting used by insurers to deal with sub-standard risks or high-risk individuals?

All of the above Signup and view all the answers

Study Notes

Agency Relationship

An agent has a duty to exercise proper care and skill, account for monies received on behalf of the principal, obey the principal's instructions, and act in good faith towards the principal.

Insurance Policy

A limitation applied to the Hospital and Surgical Insurance (HIS) policy is the Rejection limit.
The benefit provided by the HIS policy is the reimbursement of medical expenses.
For continuity of coverage of renewable policies, the insurer shall not refuse to increase the amount of cover due to certain material facts, unilaterally terminate the policy during the cover period, or reject the policy renewal.

Underwriting

A medical and health insurance underwriter may seek further medical investigation and/or documentation from the proposer if they engage in dangerous sports, have an adverse medical history, or have an occupational hazard.
Age and gender are important considerations in medical and health insurance, with females having a higher rate of morbidity as compared to their male counterparts.

Disclosure Requirement

The necessity must be disclosed to a person invited to enter into a contract of insurance under the Financial Services Act 2013.

Agency

A principle may terminate an agency by giving one of the following notices to the agency, except completion.
Insurance agencies are created through the creation of agency of necessity, agency by ratification, implied agreement, or express agreement.
In addition to paying the agreed commissions, a principle must reimburse the agent any money expended in the course of carrying out their duties, which is called the agent's right to indemnity.

Employee Benefits

Employers provide health care benefits to their employees, which normally comprise an essential part of the remuneration package, by arranging a group medical and health insurance policy.

Medical and Health Insurance Products

Permanent disability income insurance, Hospital & Surgical insurance, Disability income insurance, and Critical Illness or dread disease insurance are medical and health insurance products.
The standard Hospital & Surgical Insurance policy covers kidney dialysis, ambulance fees, and outpatient day care surgery, but not organ transplant.

Guideline on Medical & Health Insurance Business

Bank Negara Malaysia has issued guidelines to reduce mis-selling and misrepresentation to consumers, enhance access to healthcare through private insurance, and contain costs to promote long-term sustainability of the private health insurance sector.

Pre-existing Conditions

Pre-existing health conditions need to be disclosed at the time of proposing a medical health plan by the proposer, but an incident of ankle sprained 6 months prior to proposal does not need to be disclosed as a pre-existing condition.

Benefit Limitations

Benefit limitations are modifications to medical and health insurance coverage, and the option to reduce coverage at the time of claim is not a benefit limitation.

Underwriting Methods

Methods of underwriting to avoid anti-selection when dealing with sub-standard risks or high-risk individuals include rating, exclusion, limitation, and deductible.

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Description

Test your knowledge on the guidelines and objectives of Medical & Health Insurance Business in Malaysia, issued by Bank Negara Malaysia. Learn about the importance of promoting competition, access to healthcare, and cost sustainability in the private health insurance sector.