If your premium has just jumped from RM 200 to RM 350 a month, the single most important thing you can do is not panic-cancel. Cancelling means losing your entire claims and coverage history with that insurer, and any new policy you apply for will involve fresh medical underwriting — conditions you have developed since your original policy was issued may now be excluded or rated. You have real options. Here is what they are.
First: Check Whether the Increase Is Legal
Before exploring your options, check whether the increase you received complies with BNM’s current rules.
BNM’s interim measures require that medical insurance repricing be spread over a minimum of three years, with no single year’s increase exceeding 10%. If you received a notice saying your premium is increasing by 30% or 75% immediately, that is not compliant with the BNM framework.
You can challenge this. Write to your insurer citing BNM’s interim measures and ask them to confirm how the increase complies. If you are not satisfied with the response, you can escalate to BNM’s Financial Mediation Bureau. Your insurer is bound by these rules.
If the increase is within the 10% annual cap, it is technically lawful — but you still have options to reduce what you pay.
Option 1: Switch to a Co-Payment Plan
A co-payment plan means you agree to pay a fixed percentage of each hospital bill — typically 5% or 15% — and the insurer covers the rest. In exchange, your monthly premium is lower.
For a generally healthy person who hospitalises rarely, this is one of the most effective ways to reduce premiums. The trade-off is manageable: at 5% co-pay on a RM 50,000 bill, you pay RM 2,500. At 15%, you pay RM 7,500. If you have an emergency fund, this is an absorbable amount.
Many co-payment plans in Malaysia also offer a No Claim Discount (NCD). If you make no claims in a policy year, your premium is discounted the following year — typically 10–20%. This compounds the savings for healthy years.
Option 2: Add a Deductible
A deductible works differently from a co-payment. Instead of sharing a percentage of every bill, you agree to absorb the first fixed amount of each hospitalisation claim. The insurer pays everything above that threshold.
Common deductible tiers: RM 5,000, RM 10,000, RM 15,000, RM 30,000 per hospitalisation.
Adding a deductible can reduce your premium by 20–60% depending on the tier. A RM 5,000 deductible on a plan that costs RM 350/month might bring it down to around RM 250/month. A RM 15,000 deductible might bring it to RM 200/month or lower.
This works well if you have savings to cover the deductible amount when needed. It protects you against the catastrophic costs — the RM 200,000 surgery, the RM 80,000 ICU stay — while asking you to self-insure the smaller hospitalisations.
Option 3: Reduce Your Annual Limit
Many Malaysians hold plans with RM 2 million or RM 3 million annual limits. These limits provide enormous headroom, but the reality is that very few hospitalisation episodes in Malaysia come anywhere close to RM 1 million in a single policy year.
Reducing your annual limit from RM 2 million to RM 1 million typically brings a meaningful premium reduction while still covering virtually every realistic hospitalisation scenario, including major surgeries, cancer treatment, and extended ICU stays.
If your concern is catastrophic cost — which is the real job of medical insurance — RM 1 million is substantial protection. Consider stepping down if the premium difference is significant for your budget.
Option 4: Remove Less-Used Riders
Most medical insurance policies bundle several riders together: hospitalisation and surgical cover, outpatient cover, dental, optical, and sometimes maternity benefits. Each rider adds to your premium.
Review which riders you actually use. If you have not claimed on your outpatient or optical rider in the past three years, you are paying for coverage you are not using. Removing these while keeping your core hospitalisation cover reduces your premium without affecting the coverage that matters most.
Note: some riders cannot be added back later without fresh underwriting, so check the terms before removing anything you might want again.
Option 5: Request the BNM Base MHIT Plan
BNM has directed insurers to offer policyholders the option to convert to a standardised base MHIT (Medical and Health Insurance/Takaful) product with capped premium structures. This is scheduled for rollout in 2026–2027.
If your insurer has not proactively offered you this, you can ask. They are required to make it available to policyholders who request it. The base MHIT plan incorporates co-payment tiers to keep premiums sustainable long-term. It may not have all the features of your current plan, but for policyholders primarily concerned with keeping premiums affordable, it is worth understanding.
For ILP Holders: One Additional Step
If you hold an ILP, request a coverage illustration showing projected insurance charges over the next 10 years. This tells you whether your current unit value can sustain those charges without further top-ups, and how quickly your units are depleting at current charge rates.
Understanding this projection helps you decide whether restructuring — reducing the sum assured, adding a deductible to the medical rider, or converting to a standalone plan — makes more sense than simply paying higher premiums.
A policy review is the right starting point for ILP holders facing significant increases.
Frequently Asked Questions
If I cancel my policy and apply for a new one, will I get a lower premium?
Almost certainly not. Any new policy will involve fresh medical underwriting, and conditions developed since your original policy was issued — even minor ones like high blood pressure or a history of kidney stones — may result in exclusions or premium loadings. You will also lose the continuity of your claims history. Restructuring your existing policy is almost always preferable to starting over.
Can I combine a deductible and a co-payment on the same plan?
This depends on the insurer and plan design. Some plans offer a choice of one or the other; some allow both. Where both are available, combining them can produce the largest premium reduction, but also means you carry more cost on any given claim. Model the numbers carefully before committing — your advisor can run a comparison.
My insurer says my premium increase is due to repricing, not ageing. Is there a difference?
Yes. Age-based increases reflect your personal risk profile rising as you age. Repricing increases reflect the insurer recalibrating premiums across the pool due to higher-than-projected claims across all policyholders of your age group. Both are subject to BNM’s 10% annual cap under the interim measures. The distinction matters for understanding whether the increase is temporary (repricing catch-up) or permanent (ongoing age-band increases).
Does adding a deductible affect my No Claim Discount eligibility?
Rules vary by insurer and plan. On some plans, the NCD is applied after the deductible, meaning you earn the discount as long as the insurer’s share of claims is zero — even if you paid the deductible portion. On others, any claim activity (including deductible claims) affects NCD eligibility. Check the specific terms of your plan before adding a deductible if NCD is an important factor for you.
Will my existing waiting periods reset if I restructure my policy?
Restructuring your existing policy — reducing sum assured, adding a deductible, changing riders — typically does not reset waiting periods. Converting to a new policy with a different insurer, or even a new product with the same insurer, may involve new waiting periods. Always confirm this before making changes.
Have a question that wasn’t covered here? Our advisors at FINNO. offer free, no-obligation consultations — no hard sell, just honest answers about what’s right for your situation.