Covid-19 has made us aware of how important having insurance is but not everyone can afford it. To help some of us who can’t afford regular insurance products, insurance companies have introduced microinsurance/microtakaful.

What is microinsurance/microtakaful?
Microinsurance/microtakaful is like regular insurance/takaful which gives you or your family a payout in the event of injury, illness or death. But, microinsurance/microtakaful products have lower premiums and lower insurance coverage. These products won’t give you as many benefits as your regular insurance, but at least you’ll have some coverage when you need it.

Who can get microinsurance/microtakaful?
Microinsurance/microtakaful products were created to help low-income earners. Low-income earners are categorised as households which make RM4,000 or less a month, but insurance/takaful companies are allowed to decide if the person applying for a microinsurance/microtakaful plan falls in this category.

What types of microinsurance/microtakaful products are there?
Here’s a list of some microinsurance/microtakaful products you can get:

Type of insurance	Description
Accidental death or critical illness cover	Your family will be paid an amount in the event of your death or if you fall critically ill.
Credit card and utility bills cover	In the event of your death or disability, your credit card or utility bills will be covered up to the amount you’ve insured it for.
Travel insurance	You will get compensated for medical bills incurred or lost baggage/belongings while travelling.
Business protection for SMEs	An insurance cover for you to be compensated in case something happens to your business.
Daily Hospitalisation Allowance	In the event you become hospitalised, you will be given a daily allowance for that duration.
Motorbike insurance	Insurance coverage for your motorbike in case of theft, damage or an accident.

In Malaysia, microinsurance is at a very early stage, so there aren’t many companies providing microinsurance/microtakaful products. For example, insurance companies like Sun Life and Great Eastern are among the few that have started providing these plans by working with mobile plan providers. Using your phone, you can easily get and manage a microinsurance/microtakaful plan.

How do these products work?
Most of these plans are either short-term plans or pay-as-you-go plans. A short term plan would usually run for 6 months, and then you would have to renew the plan. For pay-as-you-go plans, you’d pay on a monthly basis and can subscribe or unsubscribe any time you want. If you want to unsubscribe, you can do this on the website and at any point in the future, you can submit a new application to subscribe to it again.

What do you need to look out for?

Coverage

- Be sure to check what your plan covers. With lower premiums, your coverage will also be lower compared to regular insurance/takaful.
- You will only be covered based on the events listed in your policy. So make sure you know what you’re covered for.

2. Waiting period

- One key principle of microinsurance/microtakaful plans is that the waiting period for claims is minimised. However, for most plans which cover natural death or disability, there can be a maximum waiting period of six months. This means you or your family members will have to wait up to six months to get your benefits.

3. Buy from a licensed microinsurance/microtakaful provider

- You can check this list.

So, before thinking of cancelling your insurance plan to save money, or if you don’t have any insurance yet, microinsurance/microtakaful may help BUT you still need to understand the disadvantages of losing your insurance with better coverage! To learn more on insurance, read our Guides.