Sim questioned the logic of raising premiums up to 50% when policyholders move into new age brackets.
He noted that while Bank Negara Malaysia’s interim measures cap increases at 10%, such safeguards do not apply to hikes resulting from age bracket changes.
He said one policyholder, aged 61, had made a complaint after receiving a notice of increase for his insurance premium amounting to RM3,023 for a supposed “transition to the next age bracket”.
“Another policyholder, aged 65, who purchased the plan in 2008, was told the premium will increase by RM4,099 next year – a 45% increase solely for an ‘age bracket’ change.
“Insurance companies offer affordable plans to customers when they are young, then drastically increase the premiums once they are 60 years old and above, justifying them with the ‘age bracket changes’,” he said in a statement today.
Sim said the current system penalises retirees by imposing steep premium increases at a time when they no longer have a stable income and are forced to rely on their EPF savings.
“Logically, even though policyholders only become one day older after their birthday, their insurance premiums can still (immediately) spike by 40% to 50% just because they have moved to the next age bracket.
“This makes no sense,” he said.
He urged BNM to reform the medical insurance premium pricing mechanism, especially concerning sharp age-based increases.
“Senior citizens must be protected, not victimised. It is time for the insurance industry to prioritise fairness and humanity, not just profit,” he said.
Previously, Prudential Malaysia said medical insurance premiums would be increased due to a rise in claims, as the average number of claims has risen by 19.6% compared with a year ago.
The insurer said the increasing costs may warrant an annual review of medical plans and insurance charges to ensure policyholders are well protected.
At the time, Sim accepted the insurance company’s justification and assurance that the changes made were in line with the interim measures imposed by BNM.