Once you’re in Malaysia, you’ll need private medical insurance, as a condition of your Malaysia My Second Home visa (although exemptions are sometimes made). You can probably get by with a decent travel insurance policy from your home country for the first month or so (but do read the small print very carefully!), which gives you some time to arrange your insurance locally in Malaysia, but check how long that will cover you for – most travel policies have a thirty- or sixty- day maximum trip duration. Many also require that your trip start and end in your home country (or wherever the policy was purchased).
If you already have private medical insurance in your home country, that will likely be sufficient to meet the MM2H requirements, so long as it covers you worldwide (or at least in a region that includes Malaysia – e.g. South-East Asia, Asia Pacific, Worldwide excluding USA etc; if in doubt check with the MM2H Centre at the Ministry of Tourism in Putrajaya). It must also cover any dependants you’re including in your MM2H application – or they’ll need their own policies.
My sense is that the Ministry of Tourism isn’t too concerned about exactly what insurance you have or how it is arranged (e.g. one policy for your whole family, or several individual ones), so long as you are covered for any medical bills that may arise while you’re in Malaysia, so that you’re not a burden on the local healthcare system.
If you don’t already have private medical insurance, you can arrange a policy from your home country before you arrive in Malaysia – a bit of time on Google will find plenty of ‘expat medical insurance’ or ‘worldwide health insurance’ options. However, don’t be in a rush to do that. You may find better options by searching for ‘Malaysia medical card’.
Here’s what I discovered:
There are plenty of international / worldwide / expat health insurance policies out there. They work pretty much as you’d expect any insurance product to – you fill in some details, get a quote, adjust some options, pay your premium, and you’re covered. You may or may not need to go for a medical checkup first. They key points I found about pretty much all of these policies (there may be some exceptions, but I didn’t spot any) were:
- They tend to be very expensive, but you can reduce your premiums by having an optional excess (or ‘deductible’), and/or a ‘co-pay’ amount. The deductible is the amount you are prepared to pay yourself before the insurance starts to pay out; a co-pay is where you agree to share any costs above the deductible with the insurer. So for example, you might have a £5,000 deductible and a 25% co-pay; this means you’ll pay the first £5,000 of any claims you make in the year (i.e. it can be one claim or multiple, but the insurance won’t pay out until your bill(s) go above £5,000 in total), then above that, you’ll pay 25% – so if you have, say, £6,000 of medical bills in the year, your insurer will cover £750. In my case (as a healthy man in my mid-40s), I was finding the initial premiums were up in the several-thousand-pounds area, but adding a deductible of between £5,000 and £10,000 brought them down to around £1,000 to £1,400 per year. Co-pay reduced the quotes a bit further, but not hugely.
- They tend to only cover you until age 70, sometimes age 80.
- They don’t generally cover you for day-to-day doctor or dentist visits, although some provide this as an optional extra (but unless you’re visiting a doctor several times a month, it’s probably not worth the extra premium – GP visits aren’t that expensive here, typically around 50 RM (£10 more or less) plus any medication you might be prescribed as a result.
- They do usually cover you beyond just Malaysia (e.g. other countries in the region, or worldwide, though sometimes excluding USA).
- As with pretty much any insurance product, you won’t know your renewal premium until nearer the time. Of course, you can pretty much guarantee it will go up as you get older, although most policies have some variety of No Claims Discount which ought to bring the price down or at least offset the increase.
So the key thing that I took away from my research was that this sort of medical insurance was only going to cover me for the really big serious stuff – a bad accident or a critical illness, that would keep my in hospital for weeks or months or require long term care, or a major operation. Anything (relatively) minor I’d have to cover myself.
I was prepared to accept that, and view my £1,000+ annual premium as the cost of putting my mind at ease, knowing that, while I might end up with some big medical bills here and there, I’d never be on the hook for the sort of bankruptcy-inducing costs I might face if I had no insurance at all.
But then I discovered the ‘medical card’.
This is again a medical insurance product, but with a few key differences to the insurance I described above:
- You can’t get it unless you are Malaysian or otherwise have right-to-remain / residency in Malaysia (so you’ll need at least your MM2H conditional approval letter first).
- It provides much the same scope and level of cover as expat / worldwide health insurance (usually including some level of cover overseas and medical evacuation back to Malaysia etc), but does not require the same sort of (huge) deductibles or co-pay. Typically you will pay the first 300 RM or so (approximately £60) of any hospital or clinic visit, but that’s it. As above, it doesn’t cover you for basic doctor or dentist visits, but the cover does kick in once you’re referred to a hospital or clinic for a procedure or operation etc.
- You are usually covered up to age 100 (although there is typically a requirement that your cover starts before age 70).
- Your lifetime premiums, or at least the next thirty years or so, are known in advance and will form part of your policy illustration / quote.
The really interesting thing (to me, anyway) is the way the medical card is funded. I’m basing this on the Prudential policy I went with, but I imagine other providers will be very similar.
You don’t actually pay your insurance premiums directly. Instead, you pay your premium (monthly, quarterly, or annually) into an investment vehicle. Your premiums are then deducted from this. You choose which funds you want your money to be invested into, depending on your attitude to risk and return etc, and in what proportions – there’s a decent range of funds to choose from, ranging from income, to steady-growth, to aggressive growth / higher risk, and cutting across those, various options to focus on local, regional or global investments.
The idea is that your investment should grow over the years, sufficient to cover your insurance premiums. The amount you actually pay each year will be calculated to ensure your fund is sustainable (i.e. can cover your premiums) up to a given age, based on certain growth assumptions.
There is of course risk associated with investments, but given that they used an assumed growth rate of 2% as the baseline, I feel pretty comfortable that, over the long term, that shouldn’t be a problem. In the worst case, the investment underperforms and cannot meet the insurance premiums, in which case you have to top it up or let the policy lapse. In the best case, the investment outperforms and you can draw down on the surplus, e.g. to provide a bit of extra retirement income later on.
Conceptually, this is very similar to a mortgage endowment policy. But don’t be put off by the fact that these were so famously mis-sold in the UK back in the 1980s and 1990s – those were sold as being guaranteed to pay off your mortgage twenty-five years down the line, based on over-optimistic growth projections, which many of them then failed to achieve. There are no guarantees here, other than a very conservative projection – if you pay your contributions on time and your fund grows at a minimum of 2% per year on average, your insurance premiums will be covered. And as your insurance premiums are deducted monthly, you’ll soon know if it’s not performing as intended, rather than only finding out decades later.
Personally, I’d rather risk my investment failing to average 2% growth per year and, if need be, make some top-up contributions here and there, than risk taking out an insurance policy for which I have no idea what next year’s premium will be.
Here, the premiums are fixed in advance and transparent – you know exactly what your insurance cost actually is each year. And so you can see quite easily that in the early years, you’re effectively overpaying, massively, but in the later years you’re hugely underpaying – e.g. the actual cost of my insurance in year one is approximately 2,000 RM (around £400). My actual premium, the amount I must pay into my investment fund, is 6,000 RM (£1,200, roughly). In thirty years’ time the insurance cost will have risen to almost 12,000 RM (about £2,400), but my contribution will still be 6,000 RM.
Regardless of how your investment performs, and whether or not you actually need to, you have the option of making additional top-up contributions should you wish to. I chose to double my year-one contribution on the basis that, over the next ten, twenty, thirty years or so, that should put me in a decent position to have some surplus in the fund. I’ll probably make further top-ups in the early years and treat it as a way of diversifying beyond my UK-based ISA and SIPP investments.
What I really like about this approach (which I don’t think I’ve ever seen done in the UK for medical insurance – or perhaps I just haven’t looked hard enough) is that it turns an otherwise sunk cost into an investment, with the possibility of some surplus cash at the end or along the way. And the cost to me is pretty much the same as I’d be paying for a ‘traditional’ expat or worldwide medical insurance policy – perhaps even substantially less by the time I get to later life.
Obviously this is an investment, and not just an insurance product. You should take professional advice. There’s plenty of information online if you want to do your research, but I’d recommend making the actual purchase through a reputable insurance broker. I’m not sure whether you even can buy a Malaysian medical card online – my experience so far has been that, while some web sites give the appearance of letting you do so, sooner or later in the process you’ll find yourself having to speak to a real person.
I used an insurance broker friend (happy to refer you if you message me privately), who went through the options, explained how the whole thing works, and got all the paperwork sorted out. I also see value in having a known point of contact who I can call if anything ever happens. It might be worth noting (though perhaps this is just my experience!), that whereas back in the UK brokers tend to be about selling you the policy and then disappearing until it’s time to renew, here there seems to be much more emphasis on building a relationship and being much more closely involved in making sure your insurance needs are properly met. It’s much more personal.
Whichever approach you opt for, once you’ve arranged your insurance, there are three documents you’ll need for your file to take to Putrajaya when you collect your visa. The instructions you’ll receive with your conditional approval letter refer to “Original and copy of medical insurance… including insurance policy / receipt of payment / letter from the insurance company”. I found that they don’t need to see the actual insurance policy (which in any case may run to several hundred pages…). In my case they were perfectly happy to accept printouts of:
- The cover letter from the insurer, confirming you are insured.
- The payment receipt for the initial premium.
- The policy summary certificate.
Take two copies of each – they’ll keep one and return the other to you.
Note that the proof of insurance must cover you and all dependants in your MM2H application, so if any of your dependants are on separate policies, you’ll need to provide the equivalent documents for each policy. That said, the documentation is optional for anyone over 60 years old (although it’s not entirely clear whether it’s the actual having of insurance, or the proof of it, that is optional… 😉 There is mention in the MM2H Terms & Conditions that the requirement for medical insurance may be exempted for “participants who face difficulty in obtaining [it] due to their age or medical condition”. So if you’re over 60 and/or not in the best of health, it’s probably worth speaking to MOTAC or an MM2H agent before you spend any money!
One other thing to bear in mind: most policies will have some sort of initial waiting period during which you won’t be covered for certain events. This is typically between one and four months, but may be different for individual conditions. For example, in my policy, I’m covered immediately for accidents, but only after one month for most illnesses, three months for coronary disease, and four months for certain other specific illnesses. So probably worth getting your insurance in place sooner rather than later, and do check how long you need to wait before scheduling your heart attack.
Anyway, once you’ve got all that sorted out, the next step is to complete the security bond form.
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