In Malaysia, medical cost is on the rise.
According to the Life Insurance Association of Malaysia (LIAM), the cost of healthcare is expected to increase at a rate of 15% a year. Thus, the question is no longer whether one has medical insurance or not. The real issue, however, is on what and how much one is covered.
Personally, I believe it is prudent for us to review our medical plans at least once in every three years. Most likely, an upgrade is necessary to enjoy the latest features and to keep pace with medical inflation. Unfortunately, it would translate to higher premiums for health insurance.
As I write, I’ve discovered a group of visionaries who attempt to keep the medical cost affordable to all by leveraging on the concept and rising popularity of crowd sharing.
It’s known as Life Engineering, the first medical fee crowd sharing app launched in Malaysia. Apparently, it is NOT a health insurance, but something very new to us. This app offers an opportunity for volunteers, known as sharers, to come together and share medical costs among a pool of like-minded contributors. In return, sharers would receive contributions for their medical bills if they are hospitalised.
So, is it a substitute for having medical insurance?
I don’t think so. Firstly, Life Engineering is not health insurance. Secondly, in all cases, we encouraged every individual to be adequately covered. Rather, if you don’t have sufficient coverage, Life Engineering can be viewed as a simpler and affordable add-on to your medical benefits as it is faster to sign-up compared to buying an insurance policy.
In this article, I’ll list down five features of Life Engineering that differentiate from a typical H&S (Hospitalisation and Surgical) insurance plan, a.k.a. medical card. They include:
#1: Sharing Contribution is capped at RM 50 a month
Let’s say I’m interested in being a “sharer”.
Firstly, I would pay an annual participation fee of RM 100 and contribute another RM 100 into my Sharing Deposit. A trustee would administer the RM100 in Sharing Deposit.
Secondly, the RM 100 in Sharing Deposit is only utilised if there are actual medical costs expended. The specific amount to be withdrawn varies monthly based on the crowd share amount calculated. Suffice to say, the amount to be deducted from my Sharing Deposit is capped at RM 50 a month.
Here is how it works. Let us say, one of many ‘sharers’ of Life Engineering is admitted into a hospital. Upon confirmation, Life Engineering will first pay for his medical fees. Then, the trustee will reimburse the amount of medical fees paid back to Life Engineering.
Over time, if my Sharing Deposit falls below RM50, there will be an automatic top-up made to bring my Sharing Deposit back to RM100. These transactions are made through my debit or credit card. As a sharer, I would be able to keep track of these transactions conveniently through the Life Engineering Mobile App.
There is a difference between a standalone medical card and a card that is tied to an investment-linked policy.
For a standalone medical card, the premium is revised upwards according to a person’s age.
Meanwhile, the premium for an investment-linked policy is fixed. Often, you pay more premium contribution than a standalone medical card as the additional premium is invested to offset future charge increments for the medical card which is tied up with the investment-linked policy.
In both cases, premiums for medical insurance is expected to rise in future years.
#2: Participation Age is capped at 40 Years Old.
Life Engineering is currently open to healthy individuals aged between 8 – 40 years old. It may expand the age limits in the future. Once joined, one can stay on one’s life time and enjoy the benefits, as long as he or she continue to be an active sharer.
In contrary, the entry age for an individual to purchase a medical card varies among insurers. To my knowledge, the maximum age is currently set at 70 years old. The benefits claimable from medical insurance, however, is not for a lifetime. It differs from plan to plan. Presently, the range is between 70 – 99 years old.
#3: No Cash Value
As a volunteer, I’m able to choose to discontinue my participation at any time. The unutilised balance in my Sharing Deposit is refundable. Annual Participation Fees is not refundable.
It depends. Let us start with a standalone medical card. There is no cash value. Instead, I would be refunded a preset amount for the unutilised period of the medical card. Meanwhile, if I choose to discontinue an investment-linked policy, I would receive cash value from the disposal of my investment funds.
#4: No Insurance Charges & Agent’s Commission
As mentioned above, if I contribute RM100 into my Sharing Deposit, the amount is only utilised if there are actual medical bills expended. As a volunteer, I would not incur any insurance charges or pay commissions to insurance agents.
Perhaps, you may wonder, ‘How Life Engineering makes money and run this app for the long-term?’ The answer is advertising. The founders of Life Engineering intend to generate fees for advertising on the Life Engineering app platform from potential advertisers. Besides that, they also plan to use 30% of the advertising revenue to contribute to the Share Pool to further reduce the burden of monthly share contribution amount.
Apparently, insurers and insurance agents derive income as long as I’m paying for my medical policies.
#5: Hight Medical Limit (> RM1 million)
This is exciting news. A sharer can put forth up to RM1 million medical costs for sharing in the first year of joining. Additional RM200,000 limit for each subsequent year. Hospital admissions are limited to four-bedded rooms or RM150 per night.
Yes, there are annual and lifetime limits set for most health insurance plans. However, as I write, there are several plans available which set an annual limit with no lifetime limits. It is advisable to shop around before committing to a suitable plan. There are also various plans that provide different limits for Room & Board daily expense.
In summary, the differences are as followed:
|Features||Medical Card||Life Engineering|
|Premium / Contributions||Revised based on age||Maximum RM50 a month|
|Entry Age||Up to 70 (minimum 1 month)||Up to 40 (minimum 8)|
|Cash Value||Mostly No||No|
|Insurance Charges & Agent's Commission||Yes||No|
|Annual & Lifetime limits||Mostly Yes||RM1 million, and additional RM200,000 added each subsequent year.|
Before You Start to Volunteer …
I believe, there are more to be discovered first before committing to it. For a start, you may have questions such as:
– Who are the Panel Hospitals covered?
– What are the Medical Expenses covered?
– Am I eligible to start contributing?
– What are the steps to start contributing?
– What are the steps to receive a contribution if I’m admitted to a hospital?
– What if the Sharing Deposit is completely depleted?
If you are keen to be part of Life Engineering, there is:
1. Limited early bird offer where Life Engineering waives the RM 100 annual participation fee. This is only applicable to the first 2,000 volunteers of Life Engineering only.
2. RM5,000 bereavement payment in the event of untimely death, additional RM 1,000 for each subsequent year. This payment is crowd shared among sharers of Life Engineering. Upon the passing of a sharer, an amount of total bereavement payment will be credited to the account of his nominees.
Comparing to a health insurance, it is much easier, faster and more convenient to sign up with Life Engineering through the mobile app.
Find out more on their website:
We did an interview with the co-founder Gim Loh and broadcasted it through our Facebook page. Check it out here: