KUALA LUMPUR – Bayan Baru MP Sim Tze Tzin has called on Bank Negara Malaysia (BNM) to intervene after policyholders of investment-linked medical insurance plans reported drastic cuts in their coverage years, despite earlier assurances of protection up to the age of 100.
He said the issue stemmed from overly optimistic profit projections used by insurers when selling policies, leaving many contributors — particularly retirees — exposed at the stage of life when they most need medical protection.
“Customers who purchased plans with a rider for medical coverage until age 100 are suddenly told their protection will end decades earlier, unless they make hefty top-ups. This has placed an unbearable burden on policyholders, especially pensioners,” he said in a statement today.
Sim highlighted three recent complaints from policyholders who bought their plans in 2018. One 47-year-old customer saw coverage slashed by 36 years, while another, aged 45, had his protection cut by 41 years despite paying higher premiums. A 59-year-old customer was told to top up by as much as 200 per cent to maintain coverage until age 90.
He explained that many plans had been sold on the assumption of sustained annual returns of up to 9 per cent over two decades, a forecast that proved unrealistic and caused fund values to fall short of sustaining protection. As a result, insurers shortened coverage periods dramatically.
“This means that when they retire in their 60s and need medical coverage the most, they are effectively abandoned by their insurers,” he said.
Although BNM issued a circular in 2019 to regulate investment-linked products, Sim said those who purchased plans before that year remain vulnerable.
He urged the central bank to act under Section 155(b) of the Financial Services Act 2013, which empowers it to intervene if companies conduct business in a way that harms policyholders and the public.
“A transparent mechanism must be put in place to ensure Malaysians are not shocked by sudden premium hikes or drastic cuts in coverage,” he stressed.
Sim also warned that if left unchecked, the problem could worsen the strain on public hospitals, as even wealthier groups, including the T20, turn to government facilities when their private insurance becomes unaffordable.
At the same time, he defended Health Minister Datuk Seri Dr Dzulkefly Ahmad against recent political criticism, saying the minister was working hard to reform the healthcare system and deserved support. – September 8, 2025