011. Medical Insurance premium is increased!

011. Medical Insurance premium is increased!

Just received an email, last Friday, about the notice of upward revision of medical insurance premium for AXA Affin General Insurance. The last time this happened was in 2013.

When I told another planner about this news, he merely said it is expected more insurance companies will follow. End last year Allianz had just raised the medical insurance premium, by about 30%. Now AXA Affin.

Insurance company cite "medical costs have increased rapidly due to medical inflation".

How much is the rise? It is, mentioned in the memo, about 0% to 38% depending on the age group. However, when I look at the premium table, my jaw nearly fall off. It used to be a flat rate for age band 1-14, but it is now broke down.

The premium for age 1-3 is increased by nearly 100%. This is so shocking to me. The premium is getting closer to that of a life insurance companies. However, if life insurance companies increase their premium later on, the gap might become larger.

And for that premium increased, insurance company has also enhanced some features. As we can see from the premium table, the coverage is now extended to age 100; and AXA Affin also include International Emergency Medical Evacuation and Repatriation benefit for Plan 2, 3, and 4 (RM50,000).

AXA Affin also mentioned "SmartCare Optimum is a product that runs on the platform of pooling of risk. The basic concept of risk pooling is each premium contribution from an insured member is placed in an insurance pool. This pool will ensure that members only pay consistent premiums throughout their medical insurance coverage as the large amount in the pool will protect the insured member from being exposed to high severity claims cost. As medical costs increased due to medical inflation, premiums has to be adjusted to ensure long-term viability of the portfolio."

Undeniably, insurance company must be profitable to be able to provide coverage. Rising of medical inflation is also outside their control. With proper calculation, hopefully the insurance company will continue to remain the product.