Why you must always have health insurance.

Last Updated on July 30, 2021

I feel it is important to mention this subject since I am been seeing an increasing number of families who are crushed financially and emotionally when the sole breadwinner is suddenly unable to work to bring food to the table. Or a family member gets diagnosed with a terminal illness and the family could not afford treatment because they did not buy insurance or have any health coverage.

Just last week, my brother shared with me about the real experience of a male clerk from his previous company. He was sitting in the passenger seat while his wife was driving the car. Suddenly, a car just cut in right in front of them. He got a shock, suffered a heart attack and died. He was 54 years old- just few months short of retirement. And he is not overweight- in fact, the man’s quite skinny but he is a smoker and enjoyed fattening food (one of those who can eat and not put on weight).

The family never bought any insurance and the company does not provide group health insurance benefits. So the family is left with nothing. Not only that his wife and children were traumatized by his sudden demise, there was no compensation whatsoever.

Buy insurance when you are still healthy, even if your company provides coverage.

Every year, I get over RM20k free medical benefits (if more is required, can submit appeal) from my previous company. There is benefit for spouse and children as well as group insurance- that pays a lump sum upon death, temporary or permanent disability. For those who are automatically covered by their companies, they may feel there is no need to buy any insurance.

Some pointers worth mentioning:

1. Health benefits by company lasts so long as we are still employed by the company.

The higher the medical coverage by a company, generally, the more competitive and stressful the job is. After a while, many people would leave to go to either a less stressful place or a company that does not provide much coverage.

2. If we develop health problems along the way, it’s hard to buy medical coverage.

It is similar to applying loans- banks would line up to give you loans/credit cards if you have good credit standing. The moment if you have been declared bankrupt, getting a loan is impossible.
A few of my friends had joined my previous company as healthy active young adults. Somewhere along the line, they developed high cholesterol, high blood pressure, cyst growths and some health conditions that require operation. Once that happens, any insurance companies would not be able to cover the person in future without huge loading (means you pay more compared to someone healthy). And with health problems such as diabetes and heart related ailments, most insurance company would not provide medical coverage- they would probably offer a savings plan that pays upon death or maturity of the policy.

The scary thing is that, we’ll never know- a healthy person can be rendered unable to work due to an accident or a serious health ailment.

3.It’s cheaper to buy at a younger age

Because the policy is spread up at a longer tenure, the premium is cheaper. That’s why parents now start to buy policies for their infants and even their teenage children. And you will be paying less for the same amount of coverage today than 10 years later because of inflation and rising costs. 10 years ago, health claims were not that prevalent and expensive, but now that the medical costs are so high, the cost of premiums are ever on the increase.

4. Consider it forced savings

If you take an investment-linked policy- coverage with investment, part of your premium would be invested. Since insurance policies are for long term, the investments would probably yield some returns to the policy holder as an investor. The thing is, the policy would compensate if there is health problems, disabilities and death but if there are no claims, you can still get back your money when the policy matures. That few hundred dollars that you can easily spend on clothes or expensive dining can be put aside for your old age. Look at it as another form of the 401(k) plan for retirement.

Even though I am not an insurance agent, I know how important adequate health coverage is. My good friend had to spent about one hundred thousand to treat her father and pay off his credit card debts when her father was diagnosed with end stage cancer because he never bought any insurance (there are also insurance that pays off credit card debts upon death). That’s why I always tell people who bought their policies years ago never to cancel it because they would have bought it at a lower cost per coverage compared to what the market is offering now. Even though previously I had stopped work for a year, I still saw to that that my insurance premiums are paid on time using my savings.

However, before you sign and accept any insurance health package, ensure that you know what you are covered. Read the terms and fine prints carefully. And buy it from someone whom you can trust. When I bought my second policy a few years ago, I had my friend (who was the agent) to review my first policy and based on my needs analysis, she was able to recommend the coverage that my first policy had lacked.