Lack of life insurance a ticking time-bomb, says industry

Raya cheer: Some 200 children from five charitable homes enjoying themselves at the event in Kuala Lumpur. — Bernama

KUALA LUMPUR: Less than half of the Malaysian population is insured, according to industry players who urged the public to have adequate medical coverage to handle unexpected illnesses in their old age.

They said this is important especially as the country is moving towards an ageing society.

They said medical claim payouts had surged by 14.9%, from RM13.4bil in 2022 to RM15.4bil last year, while there was a 41.4% hike in disability payments and a 26.2% rise in medical claims.

Life Insurance Association of Malaysia (LIAM) chief executive officer Mark O’Dell said those who are not insured should not wait too long as there is a possibility they could suffer an illness later.

“If you count takaful and not look at the number of policies, but the number of people, it (people who are insured) is about 45%,” he said, adding that some could have more than one insurance plan.

“If you count policies per capita, it’s closer to 60%, but we’re still relatively low (although) we are sort of on a par with the overall economic development of the country,” he told reporters at the LIAM Raya Celebration with children’s homes here yesterday.

According to O’Dell, medical claims during the Covid-19 pandemic went down 2% in the early part of 2020 but skyrocketed afterwards.

Now, medical claims are decreasing, but at a slower pace.

“It is still not down to where it needs to be. There’s some pent-up demand from people who just didn’t want to go to the hospital during Covid-19.

“They put off things and then some of those things become more severe. If you wait two years to take care of something that isn’t life-threatening, (it can) become more severe,” he said.

O’Dell also said insurance premiums would continue to surge as higher medical claims are expected to add pressure.

With premiums going up, he said senior citizens, especially those over 70, would be at risk if they can’t afford an insurance plan since they would have limited options for medical coverage.

“Premiums are going up and if they continue to increase, senior citizens won’t be able to afford insurance, and this is a problem that we’re dealing with.

“If you’re 65 or 70 years old, you cannot buy (insurance). There’s no company willing to sell a brand-new policy to somebody over the age of 70.

“We need to work together with all stakeholders. We are interested to see what’s in the Senior Citizens Bill, what are the issues it hopes to address,” he added.

The proposed Bill, which is aimed at protecting the rights and well-being of the elderly, has been delayed and is expected to be tabled sometime this year.

LIAM president Raymond Lew urged the public not to stall and to get themselves insured.

“Imagine, if someone is not insured now, what will happen to these families, especially if one is the sole breadwinner, being hit by all these illnesses or death or accidents?

“This is the message that the industry would like to spread to everyone, regardless of where or what stage of life you are in – just get started.

“We wish every Malaysian is protected and has insurance tailored to their current needs,” he added.

Earlier, LIAM and its 16-member companies celebrated its 50th anniversary with about 200 children, teenagers and caretakers from five charitable homes.

The children and teenagers were presented with goodie bags containing a stationery set, water tumbler, tote bag, cutlery set, face towel, notebook, coin box, T-shirt, cap and soft toy.

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