Malaysian workers weighing whether to remain covered under the now-voluntary LINDUNG 24 Jam scheme should not view it as an either-or choice against private insurance, according to the General Insurance Association of Malaysia (PIAM).
PIAM Chief Executive Officer Chua Kim Soon said LINDUNG 24 Jam and private Personal Accident (PA) insurance serve different purposes and should be assessed as complementary components of an individual’s overall financial protection.
“Employees should assess LINDUNG 24 Jam based on their overall protection needs, financial circumstances and existing insurance arrangements, rather than solely on the amount of contribution,” Chua told BusinessToday in an exclusive email interview.
Chua highlighted that the distinction has become increasingly relevant following the government’s decision to make participation in LINDUNG 24 Jam voluntary, leaving employees to decide whether the additional protection is necessary for them.
A Safety Net, Not A Substitute
According to Chua, LINDUNG 24 Jam forms part of Malaysia’s broader social protection ecosystem and should essentially be regarded as a baseline social safety net.
“Based on information published by the Social Security Organisation, the scheme protects against non-work-related accidents around the clock, with benefits determined according to employees’ wages, disability status and prevailing legislation. These may include income replacement, rehabilitation assistance and support for dependants.
“Private PA insurance, by comparison, provides 24-hour worldwide coverage based on predetermined contractual benefits, including accidental death, permanent disablement and accident-related expenses, subject to the terms of the policy,” Chua shared.
That difference, Chua said, means workers should avoid treating one form of protection as an automatic replacement for the other.
“PIAM views LINDUNG 24 Jam as part of Malaysia’s broader protection ecosystem. In this context, LINDUNG 24 Jam serves as a baseline social safety net, while private insurance can provide additional and customisable protection,” he added.
Already Insured? The Gap May Still Matter
For employees who already have personal accident, medical or employer-sponsored coverage, the decision may appear less straightforward.
But Chua cautioned against assuming that existing insurance necessarily makes LINDUNG 24 Jam redundant.
“Different forms of protection are designed around different objectives, benefit structures, eligibility requirements and claims mechanisms.
“A PA policy, for example, may provide a predetermined lump-sum benefit following accidental death or disability, while medical insurance typically focuses on hospitalisation and treatment costs. Employer-sponsored coverage can also vary significantly in terms of scope and how long protection remains in force,” Chua explained, while emphasising that whether an actual protection gap exists therefore depends heavily on an individual’s existing coverage and personal circumstances.
“Rather than viewing LINDUNG 24 Jam and private insurance as substitutes, consumers may find it more useful to assess how the various forms of protection work together to address different financial risks arising from accidents or disability,” Chua said.
No One-Size-Fits-All Answer
However, Chua stops short of recommending that every worker either remain in the scheme or opt out as he explained that there is no one-size-fits-all approach, with the amount and type of protection required varying considerably from person to person.
“Factors such as the number of dependants, lifestyle needs, outstanding financial commitments and overall financial circumstances can all influence how much protection an individual requires.
“As a result, there is no universal benchmark for what constitutes ‘sufficient’ coverage,” he said.
Instead, Chua said social protection and private PA insurance can work alongside one another as LINDUNG 24 Jam provides an employment-linked baseline for eligible non-work-related accidents, with benefits prescribed under statutory regulations, while private PA insurance offers more flexible coverage limits and optional additions that can be tailored to individual needs.
Look Beyond The Contribution
For workers deciding whether the scheme offers sufficient value, Chua said the contribution itself should not be the sole consideration.
“Employees should examine whether their current personal accident, medical, life or employer-sponsored insurance provides sufficient income replacement and financial assistance should an accident result in disability or death.
“Their financial obligations — including dependants, housing loans and other commitments — should also be weighed alongside lifestyle-related accident exposure and their capacity to absorb an unexpected financial shock,” he shared.
Ultimately, Chua believes the bigger question should not be whether workers choose LINDUNG 24 Jam or private insurance, but whether the combination of protection they have is adequate for their circumstances.
He added that consumers should review their protection, financial commitments and risk tolerance with their insurance agents or providers before reaching a decision.
“LINDUNG 24 Jam (can serve) as a baseline social safety net while leveraging private insurance to add the tailored, customisable protection needed to safeguard themselves and their families,” Chua said.
