Updated September 26, 2025 by Samantha

LIMA is our in-house method to simplify insurance planning for clients. Since many people find insurance complicated, LIMA breaks it down into four essential protections: Life, Illness, Medical, and Accident. It guides first-time policyholders to start with the right coverage — either by allocating 10% of their monthly income or with a basic sum assured — ensuring financial security against unexpected events.

Understanding LIMA — The Foundation of Protection Planning

LIMA is an abbreviation used in our in-house training and client presentations. Many people find insurance confusing and complicated, so we developed the LIMA concept to make it easier to understand.

When someone is getting their first insurance policy, it should always begin with LIMA, which stands for:
Life, Illness, Medical, and Accident.

A common question clients often ask is:

“How much should I spend on insurance each month?”

There are two simple ways to assess this:

1. Allocate around 10% of your monthly income for insurance, or

2. Start with a basic minimum sum assured (for Life, Illness, and Personal Accident) plus a medical plan with at least RM1 million annual limit, which is the current market standard.

Life Protection

Life insurance provides financial support to your loved ones when you pass away. For example, if your sum assured is RM50,000, this amount will be paid to your nominated beneficiary.

This is why nomination is so important — it ensures that the insurer pays the claim directly to the right person without delay. Life insurance is unique because it is often the fastest source of debt-free money your family can receive during a difficult time.

Illness and Medical Protection

Both Illness and Medical protection are for you personally, not your dependents.

They work hand-in-hand but cover different areas.

Critical Illness (CI)

If you are diagnosed with a critical illness, your insurer will pay the sum assured (e.g., RM50,000) directly into your personal bank account in a lump sum. This payout serves as a replacement income, helping you cover living expenses while you focus on recovery.

Critical Illness coverage originally included 36 illnesses, but today it has expanded to 48 or more, reflecting changing health trends. CI coverage is especially important for working adults between their late 30s and 50s, as this stage of life often involves major financial commitments — housing loans, car loans, marriage, and family responsibilities.

For example, if a client is diagnosed with stage 3 breast cancer and has RM300,000 CI coverage, the payout will be made directly to her. This lump sum gives her the freedom to manage her finances — to pay loans, cover monthly expenses, and support her family without dipping into savings or emergency funds.

However, once someone is diagnosed with a critical illness, even if they recover after 5–10 years, most insurers will not provide additional LIMA coverage.

Evolving CI Coverage

In recent years, more young Malaysians are being diagnosed with critical illnesses and mental health conditions. The top three major illnesses in Malaysia — heart disease, stroke, and cancer (HSC) — remain the leading causes of claims.

That’s why insurers now offer plans covering up to 180 critical illnesses, which I highly recommend. These plans cover early-stage cancer (stage 1) and even provide additional payouts for relapse. Some policies also extend coverage to different organs, illness stages, and even mental health conditions.

Medical Protection

Medical insurance covers hospitalization expenses — also for yourself.
Unlike CI, which gives a lump sum payout, medical cards pay the hospital bills directly, including treatment, surgeries, and follow-up care.

With a personal medical card offering a RM1 million annual limit, you have the freedom to choose between open surgery or minimally invasive (keyhole) surgery, allowing faster recovery and less pain.

Both CI and medical coverage are equally important because they serve different purposes:

- CI coverage replaces your income during illness.

- Medical coverage protects you from the rising cost of healthcare.

Without CI coverage, even if you are good at saving, you might have to withdraw your savings or liquidate investments to sustain your monthly expenses after an illness — affecting your retirement plans.

As a general rule of thumb, you should have CI coverage equivalent to 3–5 years of your annual income. This ensures you and your family can maintain your lifestyle for several years without financial stress.

When choosing medical coverage, always prioritize the annual limit rather than the lifetime limit.

For instance, cancer patients undergoing chemotherapy or radiotherapy will see these treatments deducted from their annual limit. Since most patients cannot complete all cycles in a single year, the annual limit resets every year, giving them renewed coverage.

Additionally, pre- and post-hospitalization claims are typically valid for up to 90 days before and after treatment.

Personal Accident (PA) Protection

Personal Accident coverage applies only to accident-related incidents and provides benefits to both you and your family.

For example, if a chef accidentally cuts a finger while working, the payout will be based on the percentage of the total sum assured for that injury and paid directly to the individual.

In a more severe case, such as death due to a car accident, the payout will go to the nominated beneficiary.

PA coverage also includes Total Permanent Disablement (TPD) and Old Age Disablement (OAD) — both of which pay directly to the insured person in the event of total or age-related disability.

Whether you want to safeguard your family, expand your wealth, or explore new career paths, FTA is here to guide you every step of the way.

FTA Wealth Solutions is a one-stop financial consultancy in Malaysia, offering holistic services from financial planning and nomination to will writing. As an approved HRDF Corp (Human Resource Development Fund) training provider, we also deliver structured financial literacy and professional development programmes. With over 20 years of industry experience and partnerships with leading providers, we help Malaysians protect, grow, and secure their wealth with clarity and confidence.

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5-1-3, Jalan 2/109F,
Danau Business Centre, Taman Danau Desa,
58100 Kuala Lumpur

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