Page 42 - MEDICAL AND HEALTH INSURANCE

MEDICAL AND HEALTH INSURANCE

STANDALONE MEDICAL WITH INVESTMENT LINKED RIDER

Standalone medical insurance with an investment-linked rider is only

offered by life insurance companies. It is also an individual product. This

type of insurance plan offers insurance protection resulting in

hospitalisation or surgery due to illness, sickness, disease or injury as well
as an investment opportunity to the policyholder. The benefits of the plan

are directly linked to the performance of the investment-linked fund that

is chosen by customers in accordance to their risk preference.

Some medical insurance policies with an investment-linked rider offer level
premiums. This means the policyholder will pay a fixed premium

throughout the tenure of the investment-linked insurance. However, it

does not mean the premium is guaranteed. In the event the units of the

investment-linked insurance are not enough to cover the rising cost of

insurance for the rider attached to the policy, the policyholder will have to
top up the premium to maintain the coverage.

In a general investment-linked plan, the premium is definitely higher than

in a standalone PMI policy. In the medical insurance section, the policy

terms and conditions and exclusions are generally the same as in any
standalone individual PMI product.

2.2 GROUP EMPLOYEE BENEFITS SCHEMES

A group PMI policy is usually one of the group employee benefits schemes

that are arranged by the company for its employees' welfare. This may

arise out of the union bargaining for more benefits and also as a strategy
for staff retention measures to ensure stability of the workforce for the

company.

41 | P a g e