• Life Insurance Vs Medical Insurance

    A life insurance policy and a medical insurance policy are both important to provide financial protection during unexpected emergency situations to you and your family. Both types of insurance covers come with different characteristics and benefits.

    Let’s have a look at the basic characteristics of both the insurance covers.

    Life insurance policy: A life insurance policy offers financial protection to your family after your death. This type of insurance policy is an ideal way to safeguard your family’s future behind you.

    Medical insurance policy: Medical or health insurance policy offers you financial cover against medical and surgical expenses. A medical insurance can reimburse your medical expenses suffered due to illness, injury, or hospitalisation.

    To understand each of these types in details, let’s have a look at the differences between a medical insurance cover and a life insurance cover.


    Life insurance policy: This type of insurance covers protect your family members and dependents financially, after your untimely death. It is easier for your dependents to maintain their lifestyle and pay for their expenses post your demise, if you have taken a life insurance policy.

    Medical insurance policy: A medical insurance policy provides financial support to you in case of illness, as well as hospitalisation caused due to accident. A health insurance cover can also offer benefits on various critical illnesses.


    Life insurance policy: A nominee or more than one nominees provided by the insured person are benefited with the sum assured after the death of the insured.

    Medical insurance policy: Covers medical expenses for illness and other medical conditions of the insured. This also includes hospitalisation cover.

    Covers provided

    Life insurance policy: A life insurance policy provides cover for financial obligations caused due to total and permanent disability (TPD), or it provides funds to the dependents of the insured person after his death. A life insurance policy also comes with add-on riders like a critical care rider, etc.

    Medical insurance Policy: A medical insurance policy covers medical and hospital expenses of the insured. If covered under a family health insurance scheme, your family members also get benefits from your medical insurance policy.

    Plans included

    Life insurance policy: Following types of plans are included in a life insurance policy:

    • Term plan
    • Investment linked plan
    • Endowment plan
    • Retirement plan or life annuity plan
    • Mortgage Reducing Term Assurance (MRTA)
    • Any other supplementary rider etc.

    Medical insurance Policy: A medical or health insurance policy provides:

    • Comprehensive medical/health insurance plan
    • Critical illness cover plan
    • Long term care insurance cover
    • Expat health insurance plan etc.

    Tax benefits

    Life insurance policy: Tax benefits are provided. You can get a tax relief of up to RM6,000 on your life insurance premiums.

    Medical insurance Policy: You can obtain tax benefits of up to RM3,000 for premium paid against your medical policies.

    How to choose the best insurance policy

    When it comes to choosing the best insurance scheme, a lot of questions may pop up in your mind. Which is the best policy, which plan offers better benefits, is the sum I get adequate, etc. Let us give you few guidelines that will help you in deciding the best insurance policy for you:

    • Understand your requirements before purchasing a plan.
    • Compare different policies before finalising one.
    • Compare costs and profits of a term insurance plan.
    • Check the insurance provider’s claim settlement ratio.
    • Check the amount of your payable premium through an online insurance calculator tool
    • If you are choosing a medical insurance policy, carefully choose a plan from critical illness cover, hospitalisation cover etc. as per your requirements.
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