The Costs of a Pandemic Quarantine:
Are You Ready?
The COVID-19 pandemic we’re facing is an unprecedented event, with significant global repercussions not only from a health perspective but, perhaps more crucially, an economic one.
In order to contain the rampant spread of COVID-19 in Malaysia, the Government ordered a Movement Control Order (MCO) beginning 18 March 2020. All businesses and services were forced to shut except for essential services. Schools were closed, all public activities banned, with citizens and residents ordered to stay home unless absolutely necessary. The MCO undeniably helped to spread the curb of COVID-19.
After almost seven weeks, the MCO moved towards a slightly relaxed Conditional Movement Order (CMCO) on 4 May 2020, allowing for the opening of most economic sectors with strict guidelines in place. On June 10, Malaysia cautiously welcomed the Recovery Movement Control Order (RMCO), scheduled to be in place for 12 weeks. While more Malaysians are now able to go back to work, four and a half months under the various MCOs has an undeniable effect on our living costs, especially if you were one of the many financially impacted by the disease and the subsequent Order.
Loss of income
While the Malaysian Government is providing financial assistance to individuals who qualify, the effects of COVID-19 and its subsequent quarantine can and has led to a loss of income for many of us. A report carried out by the Department of Statistics, Malaysia from 23 to 31 March 2020, surveyed 168,182 respondents aged 15 and above on the “Effect of COVID-19 on Economy and Individual”. Of those surveyed, almost half who are self-employed have lost their jobs. The next highest numbers of job losses occurred among those who work in agriculture and the services sector at 21.9% and 15% respectively. Others find themselves with reduced wages or were required to take unpaid leave. (DOSM, 2020, p.7).
The best way to prepare yourself for a potential loss of income is to have an emergency fund in place. Financial planners recommend a three to six-month salary emergency fund and if you have ever wondered why, the reason has never been more apparent now with COVID-19 and its consequences.
The pandemic, however, is taking place right now. If you need to, take advantage of applicable financial assistance by the government, moratoriums by the bank and any deferments made available by private organisations, especially if you find yourself with a loss of income. PruBSN, for example, is offering a three-month contribution deferment* for all certificate holders affected by COVID-19 and the Movement Control Order.
Medical & Health
If you stay at home, practice social distancing and maintain proper hygiene, you will, hopefully, not get infected with COVID-19. But if you were, there are costs to consider.
In Malaysia, the Government is currently absorbing the costs of all COVID-19 hospitalisations, medication and care. However, taking a COVID-19 test to determine if you have the virus can cost you, especially at a private medical institution. Thankfully, if you have a medical insurance policy or Takaful certificate, your test will be covered up to RM300 by the COVID-19 Test Fund (CTF), a special fund set up by the insurance and Takaful industry to support the Ministry of Health’s efforts to conduct more COVID-19 testing.
If you would like to be protected specifically for COVID-19, PruBSN provides a complimentary Special COVID-19 Coverage to all certificate holders who are diagnosed, hospitalised and receiving treatments in any Ministry of Health approved hospital over a specified period. It also covers loss life due to COVID-19. You can also focus on staying healthy and get the latest COVID-19 information via the Pulse by Prudential app. And, if you are not a current PruBSN certificate holder, all you need to do is, be a Pulse by Prudential registered user by 30 June 2020 to enjoy this free Special COVID-19 Coverage.
Other illnesses do not pause while the world battles COVID-19. A good medical coverage is important to get you the care you need, and perhaps even more so now when many government hospitals are focused on battling this epidemic. To get yourself treated and keep yourself safe, you may have to opt for a private hospital and its higher fees. If you do not yet have a medical insurance policy or Takaful coverage, take a look at our available Protection plans to begin safeguarding yourself and loved ones.
Travel
International travel restrictions have yet to be lifted during the RMCO, however, Malaysians can now travel locally. While the spread of COVID-19 has been contained, there is always the risk of catching it from an unsuspecting carrier of the virus. While travel insurance may help you recuperate some losses should you need to cancel your local travel plans if you contract the disease, a COVID-19 specific coverage will provide you with specific COVID-19 support that other insurance plans may not include.
And let’s not forget your everyday, daily commute, especially if you use public transportation. No matter how many times a public transport vehicle is disinfected, the risk of contracting COVID-19 is always there. While COVID-19 coverage is useful in these instances, another option is to choose ride-share transport services such as GrabCar, which have introduced an opt-in insurance coverage for COVID-19 at a minimal fee.
Loans
Loan repayments are another cost of this pandemic quarantine, even more so if you have a loss of income or no financial safety net. Thankfully, Bank Negara has issued a moratorium to delay loan repayments for property and motor vehicles for six months, significantly reducing a large financial burden for many.
For long term financial protection on home financing, apply for mortgage insurance policies or Takaful coverage. Look into PruBSN Gadai Janji, which helps protect your property if you are unable to continue repaying your mortgage due to unforeseen circumstances such as death, critical illness or permanent disability.
Daily expenses
Another important cost to consider is your daily expenses. While your bill for groceries and food delivery is likely to increase, this can be balanced out with a decrease in your budget for eating out. You are also likely to spend less on petrol, tolls, outside entertainment and sporadic shopping, although you may feel a stronger tendency to shop online.
However, if you are generally well-behaved with your daily household expenses, this may be the perfect time to save some money and work towards building your safety net. PruBSN Aspirasi is a great way to start saving as it offers annual cash pay-outs, gives you a lump-sum payment of your contributions at the end of your benefit term, and provides you with life coverage. Other great PruBSN products that can help you build your savings include PruBSN WarisanPlus, along with several beneficial add-on riders.
The list above is far from exhaustive as many other unexpected costs and expenditure can arise during this quarantine. There is credit card debt, your washing machine can break down, or you may need to invest in a tablet or computer for online education. These are considerations a financially savvy person has to make beyond the RMCO and building a safety net is one of the most effective ways to do this. If you don’t think you’re ready, there’s no better day than today to start.