"Eh, why is the Takaful contribution different from last year?" or “Why is the Tabarru’ of the takaful medical card increasing?” –  this thought must have crossed your mind, right? This is because of the medical repricing exercise. Medical takaful repricing plays an important role in adjusting the Tabarru’ in reflecting the ever changing healthcare cost, patterns of usage and changes in conditions. Worry not, as we are here to guide you on medical takaful repricing: what it is, how it happened and what are the effects of this exercise. Let's explore further on the complexity of medical takaful repricing and give us knowledge on how to navigate the important aspects of the management of this takaful plan.

Tabarru’ is a portion of Contribution allocated into Tabarru’ Fund as donation that you willingly relinquish in order to help and provide assistance to other Takaful Participant in need. 

What is medical takaful plan repricing?

Generally, repricing is a process in which the amount of Tabarru’ is adjusted to reflect certain factors – mainly the high claims experience. Adjustment is done to ensure the stability of the Tabarru’ fund as well as fulfilling the commitment to Takaful Participants by providing continuous protection. As Tabarru is part of contribution, the Takaful contribution will increase to cover for the adjustment.

It is important for you to be aware and understand about these adjustments so that you may create an earlier and orderly financial plan.

How does medical takaful plan repricing happen? 

There are many factors contributing to the medical repricing that you should know of. One of the major causes is the changes in healthcare cost. With the economical inflation that occurs towards today’s generation, the healthcare costs are also affected and Tabarru’ charges for medical takaful plan must be changed to reflect the costs hike, and preventive medical may cause the increment as more and more people are cautious of their health condition.

Other than that, the changes in mortality rate in a targeted population may also affect contributions, especially for medical takaful where for instance, the shift towards older population increases the demand for healthcare services, which causes the upward trend in healthcare costs. Changes in risk factors such as diseases due to unhealthy lifestyle in younger ages which correspondingly increases demand for healthcare services can also affect the sustainability of the Tabarru’ Fund.

What are the effect of medical repricing? 

The significant increment of contributions may be a burden to some individuals or families with limited financial resources. This may cause them to face challenges in providing healthcare protection that is enough or accessible to needed healthcare services. Takaful Participants may need to take in consideration their healthcare protection, including analysing the needs for additional protection features or replacing the medical takaful plan to a more affordable alternative.

However, medical repricing is a normal situation that happens upon us, and we should always check the information regarding repricing exercise beforehand so that we will not be in a situation of crying over spilled milk.

Ending this guide, it is hoped that you have understood deeply about medical takaful plan repricing. Therefore, it is important for you to make a good financial plan to cover your and your family's medical takaful plan contributions accordingly. To conclude, medical takaful repricing is an important step in ensuring the sustainability and relevance in protecting our health to face future challenges.