Client insurance mistakes MDRT members in Malaysia are tackling

When clients repeatedly make insurance mistakes that undermine their financial security, MDRT members in Malaysia are there to guide them toward better decisions. With the nation aiming for 5% insurance penetration by 2026, MDRT advisors identify four recurring trends and share strategies to enhance client outcomes. 

 

1. Misunderstanding policy terms

Clients often sign insurance contracts without fully understanding the terms, leading to claim denials and eroded trust. Complex jargon obscures critical details, such as exclusions for outpatient care. “Many clients sign their policies without fully understanding what’s covered or excluded, which leads to frustration during claims. As advisors, we must simplify the jargon, highlight key terms, and make sure our clients walk away with clarity, not just a contract,” says Rema Rahayu, an eight-year MDRT member from Kuala Lumpur. Rema worked with a client who assumed their health policy covered all hospital stays, not realizing pre-existing conditions were excluded. By creating a simple checklist of key terms and exclusions, Rema helped her client understand their policy, preventing a denied claim. This shows how advisors can address any misconceptions by explaining terms in clear language, providing concise summaries of coverage and exclusions, and encouraging clients to review documents thoroughly. 

 

2. Over-reliance on advisors

Clients’ unchecked trust in advisors can lead to mis-selling, with premiums for identical policies varying widely RM 300 versus RM 800 monthly. “Advisors must urge clients to verify recommendations,” says Lee Wan Qi, a five-year MDRT member from Kuala Lumpur. She advises clients to obtain quotes from multiple advisors and use online comparison platforms. Directing clients to Bank Negara Malaysia’s agent registry to verify credentials further supports informed choices. For instance, Lee helped a client avoid overpaying by suggesting they compare his life insurance quote with two others. The client discovered a discrepancy, chose the fair-priced policy, and now verifies all recommendations. Members can also direct clients to Bank Negara Malaysia’s agent registry further supports informed choices. 

 

3. Misguided and premature policy cancellations

Many clients in Malaysia have faced financial setbacks due to misguided and premature policy cancellations often driven by short-term budget pressures or a poor understanding of their plan’s long-term value. According to reports from late 2024 and early 2025, some Malaysians have canceled their medical insurance policies due to rising premiums. However, the Life Insurance Association of Malaysia (LIAM) advises against canceling an existing policy to buy a new one. This is because a new policy will likely have a higher premium due to older age, and the contestability period will begin again. “I tell clients to think beyond today because tomorrow’s protection starts with today’s planning,” says Tee Ming Hui, a six-year MDRT member from Kuala Lumpur. Many of these clients only realized the consequences later, when facing medical emergencies without coverage, or discovering that reinstating or purchasing new policies would cost significantly more due to age or new health conditions.  

 

4. Underestimating future needs

Clients sometimes make the mistake of purchasing policies without considering long-term risks, such as critical illness or retirement. With Malaysia’s ageing population expected to reach 15% by 2035, this oversight can have an unfavorable consequence on clients. “Short-term planning leaves clients exposed as their lives change,” Audrey Adeline Yap, a seven-year MDRT member from Kuching. Conducting regular policy reviews every three to five years or after life events like marriage, having children or a job promotion and recommending additional such as or critical illness coverage ensures policies grow with clients’ evolving needs. For example, Yap met a young couple who had basic medical coverage but no critical illness protection. During a review, she recommended a critical illness rider, which they added and later expressing their gratitude when a diagnosis triggered the much-needed payout. 

By identifying and correcting mistakes made by clients at each step of their financial journey, MDRT members in Malaysia are not only helping them build robust financial protection for the long term, but they are also contributing to the industry’s 2030 penetration goal. 

 

Contact: MDRTeditorial@teamlewis.com