MFPC Urges Policyholders To Retain Coverage Amid MHIT Premium Adjustments

By Nurunnasihah Ahmad Rashid

KUALA LUMPUR, Dec 30 (Bernama) -- The Malaysian Financial Planning Council (MFPC) is strongly urging affected insurance policyholders not to terminate their policies due to premium adjustments after Bank Negara Malaysia (BNM) introduced interim measures to regulate medical and health insurance/takaful (MHIT) premiums.

The central bank unveiled the measures on Dec 20 to assist policyholders impacted by MHIT premium revisions and emphasised the importance of preserving financial stability and insurance coverage.

MFPC president Andy Ng Yen Heng said policyholders should fully utilise the measures and prioritise maintaining their insurance coverage, stressing that insurance protection is the cornerstone of financial planning.

“Losing coverage could leave individuals financially vulnerable during unforeseen circumstances, and public healthcare, while an alternative, may pose challenges such as longer waiting times or limited access to preferred treatments,” he told Bernama recently.

Ng said the measures include spreading premium adjustments over three years, pausing premium adjustments for seniors, reinstating lapsed policies without additional underwriting, and offering alternative products at similar or lower premiums.

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Practical advice for policyholders

Ng encouraged those with terminated or lapsed policies to reinstate their coverage promptly under the new measures and urged individuals to review their financial plans to accommodate premium adjustments.

“Affected individuals should assess their cash flow, reduce discretionary spending, and consult professional advisers to ensure their healthcare needs are met without jeopardising long-term financial stability.

“For new or upgrading policyholders, we recommend reviewing proposed plan benefits carefully to ensure they align with personal needs, budgets, and the sustainability of premium payments,” he added.

Ng said upgrading or replacing existing policies carries risks, such as potential denial of claims for pre-existing conditions during waiting periods or under exclusion clauses. 

“Professional advice is invaluable in navigating these decisions,” he said.

Call for a long-term solution

Ng further highlighted the need for long-term collaborative efforts to address medical cost inflation, which is projected to rise by 15 per cent in 2024, far exceeding global and regional averages.

“The interim measures are a timely relief, but we call on the Ministry of Finance, Ministry of Health, BNM, and stakeholders to develop sustainable strategies to curb rising medical costs and design value-based MHIT products,” he said.

Previously, BNM governor Datuk Seri Abdul Rasheed Ghaffour said there is a need to address the root causes of rising medical and health insurance and takaful premiums, which were driven by higher medical costs and utilisation of medical services.

Ng said the design of MHIT products must also be also be improved to make them more sustainable and aligned with value-based healthcare that prioritises better health outcomes.

“This is a complex challenge that requires the concerted action of all stakeholders across the healthcare ecosystem,” he added.

-- BERNAMA