Understanding Medical Revision

The basic principle of Takaful is for mutual assistance where all participants pool their contributions in the Tabarru` Fund for the payout of claimable events, including the payout of medical claims.

Due to escalating healthcare costs and medical inflation that has resulted in higher claims for the medical portfolio, PruBSN undertakes this Medical Revision to ensure the Tabarru` Fund is sustainable to cover future claims for our customers. We will continue to review the impact of healthcare costs and medical inflation and may undertake this revision on annual basis to ensure continued sustainability of the Tabarru` Fund.

Every year, we review our medical portfolio claims experience as part of our role in managing the Tabarru` Fund. Increase in medical cost and usage of medical plans, have been found to be amongst the top reasons for the increase in claims experience. This annual review is necessary to make sure that the Tabarru` Fund continues to be sustainable to keep paying for your medical needs.

As part of our commitment to you, we continue to work collaboratively with healthcare providers and other stakeholders to manage medical costs effectively. The medical costs, however, have been rising faster than expected and has impacted the long-term sustainability of the Tabarru` Fund. We periodically review the need for adjustments and due to this, there is a need for us to revise the Tabarru` deduction for your medical plan again this year.

Contribution is the amount that you pay for basic and additional benefits (if any) under your certificate.

• For an investment-linked Takaful certificate, a portion of your contribution is used to pay the upfront Wakalah charges for your servicing agent’s or Bank / PruBSN representative’s commission and other distribution-related expenses, while the remaining is used to purchase units in the investment-linked fund(s) and for Tabarru` deduction.

• For a non-investment-linked Takaful certificate, a portion of your contribution is used to pay the upfront Wakalah charges for your servicing agent’s or Bank / PruBSN representative’s commission and other distribution-related expenses, while the remaining is allocated into your participant’s account for Tabarru` deduction.
  
  

Tabarru` deduction is an arrangement where a portion of your allocated contribution in the investment-linked fund(s) / participant’s account is deducted and pooled into the Tabarru` Fund for the purpose of mutual aid and assistance according to the agreed benefits under the plan. Generally, the Tabarru` deduction amount varies by age, and it will increase as the Covered Persons grow older.

Takaful is based on the concept of mutual assistance among the participants. Tabarru` deduction are pooled in the Tabarru` Fund to pay for future claims. Revision on the Tabarru` deduction is required to ensure sustainability of the Tabarru` Fund to allow for the increase in health care costs, which will be shared among the participants of the Tabarru` Fund and will be applied on all certificates with the similar medical plans regardless of individual claims history.

The contribution and Tabarru` of our medical plans are not guaranteed, as stated in our product materials, product illustrations, and certificate documents. We may revise the contribution and the Tabarru` deduction provided that prior notice is given to the participants (according to the notice period stated in the certificate document).

The additional contribution / top-up is required to cover the increased Tabarru` deduction of your medical plan(s). With the increase in Tabarru` deduction, more units / higher amount will be deducted from your certificate’s account values. You are advised to pay the additional contribution / top-up to enjoy continuous medical coverage.

Consequence of not paying the additional contribution / recommended top-up after the Medical Revision: It is possible that your certificate may lapse earlier than expected. Once lapsed, the coverage will stop accordingly. If you decide to revive the certificate or participate in a new medical plan, you will be subjected to a health declaration or may have to be assessed / underwritten again. This may require a higher contribution and be subjected to other terms and conditions such as waiting period.

Other than the rates revision, the coverage of any Contributor rider attached to the certificate will be increased accordingly, to cater for the increase in the contribution. All other certificate’s coverage and benefits will remain unchanged.

The impact on the certificate’s account value should be minimal because the additional contribution will be utilised to cover for the increased Tabarru` deduction.

The rate of increase in contribution and Tabarru` deduction is not fixed across all certificates as it varies depending on existing certificate`s terms, type of medical plan, person’s covered age, gender, nature of occupation, etc.

As communicated during your acceptance to remove the exclusion clause, we will take the additional coverage into account when we carry out the review of the contribution rates and Tabarru` deduction amount. Effective 1 January 2025, a separate Tabarru` deduction will be charged between the certificates with and without the additional coverage to ensure fairness for all participants of the Tabarru` Fund.

You may review your medical plan to better align it with your financial feasilibity. Listed below are some of the options you may wish to consider:

Important Note: Please reach out to your servicing agent or Bank / PruBSN representative to discuss the options carefully and ensure that it suits your protection and financial needs.

The medical revision is governed under a structured and objective approach to ensure the continued sustainability of the Tabarru` Fund such that customers continue to be covered during their time of need. This is a commercial decision endorsed by PruBSN after taking into consideration the current claims experience and the expected rise in future medical costs.

The revision of contribution and / or Tabarru` deduction takes effect from the certificate anniversary date. The notification letter is provided at least thirty (30) / ninety (90) days before the certificate anniversary date, depending on the medical plan.

If your current medical plan is with Full Coverage or Zero Deductible, you may consider revising your medical plan to other co-payment options such as Co-Takaful, SmartSaver or Deductible plan (if applicable).

You may also switch to another available medical plan under the same certificate (if applicable) or review your current certificate benefit with your servicing agent or Bank / PruBSN representative to explore which would best suit your protection needs and affordability.

Yes, you may revise your current Plan 200 to a lower R&B plan (if available), to suit your protection and financial needs.