ALL across the world, women outlive their male counterparts, and Malaysia is no exception to this phenomenon. In 2017, the life expectancy of women in Malaysia was 77.4 years while for men it was 72.7 years, according to the Department of Statistics Malaysia.
It’s interesting, then, to note that insurance companies offer gender-centric insurance targeting women but not men.
So, is lady’s insurance a marketing gimmick?
The consensus of our interviewees is that by and large, this is not an essential cover. However, as with many types of insurance policies, this also depends on your circumstances.
Focus on more essential insurance covers like death, critical illness, medical and personal accident plans, advises Liau
Liau Chee Hui, practice manager at FA Advisory Sdn Bhd, hardly recommends this policy to his clients. He believes that while it is good to have a lady’s insurance, this cover is not necessarily a must-have.
“We focus on more important insurance covers. To begin with, most clients don’t even have coverage on the more important insurance covers.”
He opines that you must first be equipped with essential insurance covers like death, critical illness, medical and personal accident plans.
“These four are the must-haves. If your insurance coverage is sufficient and you have the budget, then look at whether you are in a high-risk group, which means looking at whether your family has breast cancer and cancer related to the reproductive organs.
“For ladies with late pregnancy, say you’re having your first baby after 35, you may want to consider a lady’s insurance policy as it covers pregnancy and complications,” he says.
Most lady’s insurance is in the form of a rider that needs to be attached to a basic insurance plan, rather than a standalone plan, notes Liau. The premium isn’t too expensive – an average 30-year-old female executive can expect to pay RM1,000 a year for her premium, he estimates.
Still, some policyholders may find its benefit overlapping with their existing insurance. Liau further explains that most critical illness (CI) insurance already covers cancer that afflicts women and their reproductive organs, among other types of illnesses.
While lady’s insurance plan normally covers breast reconstruction, something not already covered by CI and medical insurance, a lump sum payment would have been paid to those with a CI cover, which can then be used for reconstructive surgery, he says.
Luke Roho, co-founder of iBanding.com, a platform offering independent information and education about insurance, mirrors a similar view. He observes that generally, there are three categories of benefits in a lady’s insurance, namely: 1) cancer 2) childcare and 3) life events.
With so many insurance products in the market targeting women, you should understand what they cover, and whether they make sense to you, suggests Roho
In his view, the cancer benefit featured in a lady’s insurance plan is “a bit of a marketing gimmick”.
Like Liau, he believes that if you have bought a CI cover, all the female-related cancer diseases like breast cancer are already covered.
“CI has a broader coverage – it covers heart attack, stroke, coronary artery disease, hepatitis, kidney failure and so on. You have to watch out though – some medical insurance, which has an annual limit, may exclude cancer. That’s why you would need CI insurance to specifically cover 36 CI,” he elaborates.
Pregnancy and childbirth risks
However, when it comes to child-related benefits concerning pregnancy and childbirth, Roho believes those areas make sense because complications can be very costly.
“Some of the issues – such as babies born prematurely and having to go into incubation, cost money. I know one friend who had to pay RM40,000 for his baby’s lung-related health problem at a private hospital,” he recalls.
Hence, from the point of view of an expecting mother, this would make sense. “If your baby has cleft lip and cleft palate, there are some plans where they will pay up to RM15,000 to RM30,000 for the surgery, and some may even cover you if you give birth to a child with autism. If you don’t have a high income to pay for these treatments, such a cover would make sense,” he says.
Interestingly, some of the policies offer you a third benefit, such as rewarding you with money during life events like when your child is born, when you buy a house or get married.
Whether or not you should opt for this feature depends on your financial discipline. “If you are a financially-savvy person, you will start saving for these events. If you’re bad at managing money, the cash money feature makes sense since the insurance company is acting like a money manager and forcing you to save every month so that you have extra money when those events happen,” Roho explains.
“For instance, one insurer has a life insurance policy that covers cancer, pregnancy care and life events. So there are benefits like when you get married, they will pay you 3% of the sum assured payout.
“Assuming your sum assured is RM100,000, you will get RM3,000 from your insurance company when you get married. But don’t think this money is free. It is actually your own money that you have saved up through your monthly premium,” he explains.
It is always more cost-effective to cultivate financial discipline first, where possible. “You can save more money if you are disciplined enough to put money aside on your own, since the money you save on your own does not pay for an insurance agent’s commission, fund manager’s annual management fee and beyond,” says Roho.
Do you really need the benefits?
With so many lady’s insurance products in the market, the approach you should take is to understand what they cover, and whether they make sense to you, suggests Roho.
“For instance, if you don’t plan to get married and have children, why buy it when you are not going to be entitled to childcare-related benefits? You can just buy a CI cover instead to cover against major illnesses not related to your pregnancy or child,” he suggests.
The situation, however, is reversed if you’re a 40-year-old woman who is pregnant with a child. “You have a much higher chance of pregnancy-related complications than younger women. If you already have a life insurance policy, check if your insurance company has an add-on you can buy to cover only for your child’s wellbeing, and forget about cancer or cash bonus for life events.
“You can buy the rider for the first year, then cancel it if you don’t need it for the second or third year anymore. For example, AIA offers A-Plus BabyCare that AIA female policyholders can add on to their life policy,” says Roho.
The right approach to life insurance should be to protect yourself from costly mishaps that are out of your control but might happen to you, such as cancer, heart attack, car accidents and childbirth complications, he says.
Also, take up an insurance that protects your loved ones, in the event you pass on or lose your ability to provide for your family due to disablement.
Sensible versus not-so-critical benefits
Some lady’s insurance plans may have more unique benefits than commonly observed.
An industry player, who declines to be named, points out the importance of focusing on the more practical benefits of one’s insurance cover. A foreign insurance company, for instance, has a lady insurance that doesn’t cover you against cancer, he points out.
“Instead, they offer to pay you a few thousand to thousands of ringgit for things like cosmetic surgery mishap, snatch theft, sexual harassment, infertility and human immunodeficiency virus (HIV) infection,” he says.
A variety of misfortunes may or may not take place in your lifetime, but you don’t want to insure yourself against every accident, he cautions. “There is no free lunch – for every protection that you need, you have to pay for it. Insurers, as risk management experts, would have done their due diligence to prevent excessive and fraudulent claims,” he cautions.
He believes that a more conventional insurance product like CI offers better value to policyholders. “I believe that it’s important to buy insurance against cancer (via CI cover) because the root cause is multi-factorial – cancer can be attributed to family history, environmental pollution, water, food and beyond. It also gives your family good financial protection with the high sum assured.
“But for insurance protection against snatch theft, sexual harassment, cosmetic surgery and cash rewards for life events, you can cover the small amount compensated by the insurance company yourself,” he says.
All-inclusive benefits versus add-ons
When you look at the many insurances available to women in Malaysia, you want to consider if you want to buy an insurance that is all-inclusive, or if you want add-ons as needed, says Luke Roho, co-founder of iBanding.com.
Different insurance companies offer different types of lady insurance with different benefits. The good news is you may choose what you need without paying for all three categories of the benefits. On the flip side, you will need time, effort and help to discern what works best for you.
One foreign insurer offers an all-in-one standalone insurance plan that combines critical illness (CI), childcare benefits and cash rewards for life events, but it will cost the policyholder more.
Another insurance company has a rider that issues a payout when cancer is diagnosed, but it does not protect the child or offer you cash benefits for life events. On another hand, some may offer either a standalone or rider that pays you only childcare benefits, but excludes cancer benefits and cash bonus for life events, says Roho.
He believes female policyholders should not opt for benefits for life events “if you are confident of your money management skills”. The CI feature in a lady’s insurance plan is also not as comprehensive as the conventional CI cover, he says.
In Roho’s opinion, the only benefit worth opting for in a female insurance plan is childcare-related. “If I had a child or planned to have one, I will buy a cover with childcare benefits because this is not something that I can control, and you never know what can happen.
“Insurance will give me the security that if something happens during pregnancy or birth, I am financially protected because the insurance will pay for it,” he says.