For many people, obtaining the proper medical insurance for themselves can be a daunting task. This may mainly be due to the fact that there are many new terms and concepts to learn. The good news is that these terms and concepts are easy to learn.
Therefore, it doesn’t matter whether you’re interested in health insurance, car insurance, life insurance or any other types of insurance, learning some basic concepts helps.
In this article, we’re going to look at what limits mean in insurance, and how they can affect you in your daily life.
Limits will be important when the time arrives for you to claim from your insurance policy in the long term. Therefore, it would be important to know the basics beforehand.
Source: xFrame
Annual Limits vs Lifetime Limits
Most insurance policies that you buy will come with aggregated limits over a period of time. These limits represent the maximum amount you can claim from that policy in a particular period of time.
Apart from the amount of claims you can make, insurance limits also affect the premium you have to pay. Very simply, this means that if you pay a higher premium, your limits will be higher in general.
Annual limits
Annual limits are defined as the aggregated amount you can claim for a certain policy over a period of one calendar year. Annual limits in Malaysia depend heavily on the type of insurance policy and coverage. It can range from as little as RM50,000 to as much as several million.
For example, if you have a RM250,000 medical bill over a period of one year, and your policy has an annual limit of RM200,000, you will have to cover the additional RM50,000 with your own savings.
Lifetime limits
A lifetime limit is defined as the maximum aggregate amount one can claim from an insurance policy from the time the policy is bought until the policy coverage expires. For many policies, especially health and medical related insurance, coverage ends at the age of 100 or sometimes younger.
This means that if the lifetime limit is RM 5 million, and you bought the policy at the age of 28, you’ll be able to claim a maximum of RM 5 million for the next 72 years with annual limits in place.
There are some insurance policies which don’t have lifetime limits and these usually involve health insurance. This means that you’ll be able to claim as much as you need to, as many times as you need to as long as you adhere to the annual limit.
How do Limits work in an Insurance Policy?
As we all know, an insurance policy is made up of several coverages. For a medical insurance policy for example, you will have coverage for hospital stays, cancer treatments, accident and injury treatment costs, critical illness coverage, clinic visits and consultation costs, and much more.
Different medical insurance policies will offer a package of different coverage. For example, if you choose a health insurance policy focusing on critical illness, the policy will include coverage of all the basic healthcare costs, as well as costs to treat a critical illness you may face like heart disease or cancer.
Each coverage will come with its own annual limit and sometimes, a lifetime limit. It is important for you to understand the limits of each coverage before you pick an insurance policy.
For example, a medical insurance policy might have an annual limit of RM 1 million, and within that 1 million annual limit there are disability limits for each disability ( say RM100,000).
For example, let’s say that the disability we’re talking about is cancer. Therefore, if you are suffering from both lung cancer and liver cancer , you will be eligible to claim up to RM100,000 for each cancer individually.
Therefore, despite having a very high annual limit, not all of it is allocated for your disability. Your disability limits and other individual limits can still be relatively inadequate when they’re perceived separately. That is why having higher annual limits will boost the amount for individual disability limits and other limits to a point where you feel they’re enough to meet your needs.
Source: xFrame
How will Increased Limits Benefit You?
With increased annual limits, you will enjoy much more flexibility. Additionally, these are the benefits of higher limits on your medical policy:
Higher coverage amounts
Since you never know what you might face in the future, higher overall limits also means higher individual coverage limits for things like ward stays, treatments, ambulance, surgery and more.
Minimize out of pocket payments
Plan for your future with higher limits, so that you don’t have to worry about paying out of pocket (meaning from your own funds) after a claim is made. In fact, you may not have to pay anything at all.
Get better medical treatment
Higher limits means a lot more than just higher payouts for your claims. It’s also an investment that will allow you higher returns and more leeway to enjoy better medical treatment at the medical facility of your choice, which can be among the best in the country.
Overcome medical inflation
As time passes, medical costs are expected to increase, and this is known as medical inflation. This is due to several factors, including currency inflation, higher demand and an ageing population.
You have to ensure that your annual limit is still high enough to be sustainable and sufficient for you in the next few decades, as the costs of medical treatment inflates. .This is because medical policies are expected to cover you for the next few decades until you reach the age of 90 or 100..
For example, medical inflation can happen at a rate of 15% each year, so your annual limit in 10 years time has to be 150% what you require today. In 20 years , it is estimated that you would need about 200-250% the amount of costs you would use for the same treatments today.
Source: howmuch.net
Check out Great Eastern’s SmartMedic Million health policy with us and enjoy the special SmartMedic Million Extender promo from now until 31st October 2021. This medical policy features a very high annual limit, and no lifetime limits.
Under this promo, you’ll be able to enjoy an optional policy rider which will increase your annual limits up to RM 2 million with no additional charges.
All you have to do is apply for the SmartMedic Million Extender Special within the campaign period to enjoy this offering. Remember that it’s for a limited time only, so don’t miss out. Contact our agents for more details and to start your application process today!
