With more and more microinsurance policies out there, it can be confusing to decide on the right one for you. Microinsurance plans also only provide coverage for specific events, so you should look at each plan carefully to be sure what protection you’ll get. The lower coverage provided by microinsurance compared with regular insurance is partly why they can be bought at a lower price than regular plans.

As microinsurance plans tend to have a shorter coverage period compared to regular insurance, they can be ideal if you only want short-term protection. Otherwise, you’ll need to renew your plan.

And if you want more coverage over a longer time, you should probably look at a regular medical or life insurance insurance plan instead. Having a regular insurance plan will make sure you and your family have medical and financial protection if you get a major illness, become disabled or pass away unexpectedly. Since you’ll never know when these situations might happen, it would be good to have a long term insurance plan to use continuously, no matter when the situations happen. On the other hand, if you only had a short term microinsurance plan, you might not have protection all the time.

Here, we’ve listed out the common types of microinsurance policies and some things you should look out for when you think about each plan.

 

Medical Protection

Medical

Medical insurance is one of the most important plans you can get, since all of us get sick at some point in our lives. If you’re not insured, you could end up incurring high hospital bills and getting into debt, especially if you go to a private hospital.

But a typical medical insurance plan may be over the budget for some people. While the premium of a regular medical insurance plan can cost a few thousand ringgit a year, the premium of a microinsurance plan only costs a few tens of ringgit a year. A regular medical insurance plan would be more suited for those seeking private medical treatment, which tends to be more expensive. On the other hand, the coverage of a medical microinsurance plan could be more suited to public medical treatment.

So if you can’t afford a regular medical insurance policy now, you could look into a medical microinsurance plan which would be a more affordable option to have some medical protection.

However, because certain treatments or other fees like ambulance fees may not be covered under medical microinsurance plans, you may want to combine a regular insurance plan with a microinsurance plan. For example, you may want to get a regular insurance plan that covers treatment, hospitalisation and ambulance fees. But if you’re concerned about high hospitalisation bills, you may top it up with a microinsurance plan that covers just hospitalisation bills.

When choosing a policy, consider your budget and the risks. Here are a few factors to consider:

• Age
• Family health history
• Budget
• Coverage (including Covid-19 coverage)

Critical illness

Worried about costs after hospitalisation and treatment that’s not covered by medical insurance? You could think about getting critical illness microinsurance. You should also think about getting critical illness cover if your family has a history of critical illness.

While typical medical insurance plans pay for the cost of treatment, hospitalisation and medicine, critical illness microinsurance pays one lump sum once you’ve been diagnosed with a critical illness. You can use the money for your care or physiotherapy after you’re discharged from the hospital.

Travel

Are you planning to go on a trip? Do you travel a lot for work? You may get into an accident or lose your luggage. Or due to Covid-19, you run a higher risk of cancelled trips or needing emergency medical treatment. So, if you don’t want to be stuck in any of these situations, you may want to consider travel microinsurance. Travel insurance covers accidents and illnesses which happen when you travel.

But, if you’re worried about getting Covid-19 while travelling, you’ll probably have to add on a different plan, like medical microinsurance, because travel microinsurance plans usually don’t cover Covid-19.

Travel microinsurance also usually doesn’t cover long-term medical treatment, so you may need to look at medical insurance if you want more protection.

Personal accident

Personal accident microinsurance covers injuries, disabilities and deaths caused by unforeseen accidents. You may need it if your job involves a lot of physical labour. If you drive long distances frequently or are an e-hailing driver, you could also look at a policy that covers personal accident and vehicle insurance. If your job is short-term, this could be a good way to save on premiums, compared to conventional plans which have longer coverage periods. If you think you’ll need it in the longer term, you may need to renew your plan.

However, personal accident microinsurance plans may not cover accidents related to pre-existing medical conditions, so you may need to look at medical microinsurance as well.

Covid-19

Some medical microinsurance plans may not cover complications related to Covid-19 due to the high risks related to the virus. So, you should look for specific plans that cover hospitalisation and treatment for Covid-19.

If you’re unsure which one to choose and want to get the most protection, you may consider bundling a few types of microinsurance plans, e.g. medical and Covid-19-specific policies. You could look for a plan that also includes benefits for those who lose income due to Covid-19.

 

Financial Protection

Credit card and utility bills insurance

Do you have a high-risk job that could result in accidental death, permanent disablement or critical hospitalisation? If you’re the sole provider or main breadwinner in your household, or if your income is irregular, you may be worried about unpaid bills. If these are your concerns, you may want to consider credit card and utility bills insurance.

Business protection for SMEs

Are you more concerned about protecting your business assets? Do you have valuable property in your business? You may want to look for a policy that protects you against fire, burglary, business interruption, loss of money and breakdown of equipment.

If your business keeps a lot of cash in your store, you may be worried about losing that money on the way to the bank. Or maybe you worry about your business getting interrupted or having to close temporarily? You could look for a plan within your budget that can cover the cost of your potential losses according to your needs. And remember, some plans may not cover the risk of Covid-19 related loss of business after a certain date.

Business protection microinsurance for SMEs can also cover losing your business income in the event of accidental death, permanent disablement, or critical illness. During this pandemic, you may also consider looking at a plan or add-on that covers Covid-19 related complications.

Motorbike insurance

Typically, you get protected if your motorcycle is lost or damaged during an accident, fire or theft. If you’re involved in an accident, you may be covered against damage to another person’s motorcycle. Choose your plan depending on how much coverage you need and your budget.

Now you know the types of microinsurance plans there are. If you’re not insured and thought you couldn’t afford insurance, you can look around for the right microinsurance plan for exactly what you need at a lower price — And make sure you at least have some protection if something bad happens. You could also mix microinsurance plans with a regular insurance plan to give you more protection.

For more information on insurance, read our guides on medical insurance, life insurance and Takaful. You can also read our blog for an introduction to microinsurance.