Medical Sustainability Guide
Your current coverage vs your future coverage
First, let’s understand the concept of Takaful. Takaful refers to the cooperation between individuals to mutually aid each other in providing financial assistance to participants in need. A portion of the contributed amount will be donated into the shared pool called Tabarru’ Fund which is used to pay all claims received by the Takaful Operator.
Did you know? In 2023, RM141 million medical claims were made, which is 45% more than in year 2022. If the claims volume exceeds the total Tabarru’ collected without intervention, the Tabarru’ Fund may deplete and the Takaful Operator may no longer be able to provide coverage to other Takaful participants that contribute to the Tabarru’ Fund. This is where revision of Takaful contribution amount takes place, to ensure the sustainability of the Tabarru’ Fund for the payment of Takaful benefits offered under your Certificate.
Takaful contributions may be affected, potentially impacting your personal finances as well, but Takaful coverage is still a necessity! However, worry not as we will be with you every step of the way. It would be worthwhile to revisit your existing Takaful coverage so we can make the right adjustments for your needs. Click away to see how you can be well informed and ensuring the sustainability of your medical coverage.
Watch the following video for more insights.
What to do next?
Please contact your Takaful Advisor to discuss your options. Alternatively, you may visit our FAQs at the bottom of this page or call our Customer Service Careline at 1300-13-8338, or email us at i-greatcare@greateasterntakaful.com.
Frequently Asked Questions
Revision of Tabarru’ Charges (i.e. repricing) is mainly driven by deteriorating claims experience that is due to rising medical costs, increase in diagnosis of chronic or lifestyle diseases which leads to higher frequency of people seeking healthcare treatments, increase in doctor’s fees or laboratory charges and new/more advanced medical treatments and prescription of drugs.
As claims are paid from the Tabarru’ Fund, the rising trend of claims has reduced the Tabarru’ Fund considerably and it may not be sufficient to cover future claims. Tabarru’ Charges for respective medical plan will need to be revised to ensure its sustainability. Without the repricing exercise, Tabarru’ Fund may deplete and we will not be able to pay for future claims.
The cash value / account value likely will increase with the additional contribution / recommended top-up during initial years, however, the increase in cash value / account value will subsequently reduce in later years as future Tabarru’ deduction will be increasing over the years according to your age.
Example on the following Male, Non Smoker ANB 30, Plan 150 Expiry 80, Current monthly contribution RM 165.25
Proposed monthly top up contribution = RM 70
New monthly contribution = RM 235.25
From the illustration above, we can see the cash value increasing over the years, but at a certain point, it will start to reduce as the Tabarru' amount deducted has becoming much higher over the time. Projection is assuming investment return of 5% every year. The actual returns is subject to company’s performance.