05-05-2025
- Business
- New Straits Times
Sharp insurance premium hikes for senior citizens irrational, says MP
KUALA LUMPUR: Bayan Baru Member of Parliament Sim Tze Tzin has criticised the sharp insurance premium hikes for seniors, arguing that the combined impact of age bracket changes and medical repricing in the same year imposes a heavy financial strain.
Sim said insurance companies offer cheaper plans when customers are younger but drastically raise premiums once they turn 60 and above, using the excuse of "age bracket."
He said although an interim measure by Bank Negara Malaysia caps premium increases at no more than 10 per cent, it does not apply to increases due to 'age brackets' or 'age bands', which refer to changes in age categories within insurance policies.
"Logically, a policyholder only becomes one day older after their birthday, yet their insurance premium can rise by 40 per cent to 50 per cent simply for moving into a new age bracket.
"This is irrational.
"Insurance companies offer cheaper plans when customers are younger but drastically raise premiums once they turn 60 and above, using the excuse of 'age bracket.'
"More worryingly, these increases happen when individuals have retired, no longer have a fixed income, and depend solely on their EPF savings.
"In the end, senior citizens are forced into a cruel choice (of either) pay an exorbitant premium or give up the coverage they've maintained for decades," he said in a statement.
Sim cited a case of one policyholder, aged 61, who had made a complaint after receiving a notice of an increase for his insurance premium amounting to RM3,023 for a supposed "transition to the next age bracket."
His insurance medical repricing also amounted to RM906.
"Another policyholder, aged 65, purchased an insurance plan in 2008.
"In 2025, he paid a premium of RM9,019.50.
"However, for 2026, the insurance company raised the premium by RM4,099.50 (a 45 per cent increase) solely due to the 'age bracket' factor," he said.
He called for BNM to implement a comprehensive reform of the insurance premium pricing mechanism, especially regarding the steep changes linked to age brackets.
In December, BNM announced that insurers had agreed to spread the increase in insurance premiums over a minimum of three years, limiting the annual rise to under 10 per cent.
This interim measure, which will remain in place until the end of 2026, is expected to ensure that at least 80 per cent of policyholders will experience annual premium adjustments of less than 10 per cent, in line with medical claims inflation.
In March, Finance Minister II Datuk Seri Amir Hamzah Azizan said the government, in collaboration with key stakeholders, is implementing long-term solutions to control the rising costs of healthcare.
