All About Health Insurance

[ZacK]

[Editor's note: Topic selected for http://www.kiasuparents.com/kiasu/content/buying-health-insurance.]

yixuan:

Anybody have any idea?

Before you can arrive at your answer on what would the \"best\" policy, there are a lot of considerations >>

1. Who is it for?
2. What is the purpose/objective of the policy?
3. How long do you intend to fund it?
4. How will this blend into your overall financial planning?
5. Do you intend to purchase the policy from an insurance broker or insurance agent?
6. etc...

There are really a lot of considerations before you will be able to arrive at what would be a suitable policy to meet the needs that you are trying to address.

If you would like to do some basic research, you may visit the Life Insurance Association's (LIA) website for more information.
- http://www.lia.org.sg/lia-TypeA.asp?id=284 (Check out Your Guide to Buying Life Insurance)
- http://www.lia.org.sg/lia-TypeA.asp?id=280

My suggestion would be for you to speak with Insurance Agents and also Insurance Brokers to have a feel of what they can offer in terms of products and services... For me, I would adopt the following:

1. Look for an agent/broker who I am comfortable with i.e. this mean meeting with more than one potential insurance adviser if need be.
2. You should also take note that the person should be suitably qualified to do a Financial Needs Analysis for you. Some certifications that you can look out for are Chartered Financial Consultant or Certified Financial Planner designation etc
3. Once I have identified the person whom I am comfortable with and trust that he/she is suitable qualified to help me with my financial planning, I will then complete a Financial Needs Analysis with the adviser.

Buying insurance is a long term commitment, many a times, I find that people purchase insurance on a piece meal basis which may create an obstacle in piecing together your financial planning \"jig saw puzzle\" and thus creating redundancies.

I was previously in the industry and have since moved on... And from my experience, the BEST wholelife/endowment/investment link etc policy does not exist. What is suitable for one person may not be suitable for another...

Hopefully I have not created a headache for you instead but just hoping to draw your attention to some issues that you should look at... Finding a good planner who is able to place your needs and have your best interest at heart is more important than finding the \"best\" policy.

:celebrate:

[jedamum]

i am currently under Plan A of certain insurance coy coverage for hospitalization. i would like to find out that if say in 20yrs time i intend to downgrade to Plan B, is it subject to a re-underwriting?

[jedamum]

hokkienmee:

mummyjoyce:

Hi , I am 42 this year wth 2 children. Can someone let me know which insurance to buy that will cover hospital stay using Medisave for me?


Thanks

I am attaching the link to the shield plan comparison by MOH. You can look at different private shield plan provided by different insurers.

http://www.moh.gov.sg/mohcorp/hcfinancing.aspx?id=11222

mummyjoyce,
in addition to looking at the extend of coverage, like what Zack mentioned earlier, you have to decide how long you intend to cover yourself. you will have to look at yearly premiums payable for during your age of retirement up til you expected lifespan if you intend to cover yourself 'til the end'. the premium is very hefty - i myself is reviewing my own coverage. how to sustain a $3-5k per yr premium (for own and spouse) when one is already retired?

[ZacK]

jedamum:

i am currently under Plan A of certain insurance coy coverage for hospitalization. i would like to find out that if say in 20yrs time i intend to downgrade to Plan B, is it subject to a re-underwriting?

Source: http://www.moneysense.gov.sg/resource/publications/quick_tips/YGTHI_final.pdf
http://img204.imageshack.us/img204/2977/picture8nbz.png\">

Logically speaking, if your HS policy has a guaranteed renewability clause, then downgrading to a lower coverage plan should not be subject to re-underwriting. Do confirm with your insurer though whether the guaranteed renewability clause is also subject to the original terms at the point of application i.e. even if you have this clause, some insurers may render this clause not applicable if you are applying to change the terms of the contract i.e change of plan coverage is considered changing the terms of the contract... So they may insist on re-underwriting.

If your HS policy does not have a guaranteed renewability clause, your insurer reserves the right to vary or change the terms... Including rejecting your renewal... At every anniversary. HS plans w/o the guaranteed renewability clause are deemed to be \"re-underwritten\" before the insurer decides if they should renew your policy at original terms, increase premium or impose conditions etc. So if your HS plan falls into this category, whether you upgrade or downgrade your plan in future... There will be some form of underwriting.

I stand corrected on the above... So best would be to check with your insurer and ask them to point out to you the section of the terms and conditions in your contract to support what they tell you.

[jedamum]

ZacK:

I stand corrected... Best would be to check with your insurer and ask them to point out to you the section of the terms and conditions in your contract to support what they tell you.

Thanks Zack for your added information.
I had already arranged with my agent to review my policies.
Am pretty upset that they did not highlight to me the hefty premiums towards the end of one's expected lifespan when we needed most coverage and when we are supposedly surviving on the remains of the retirement nestegg. No point having everything fully covered but cannot sustain the premium when the time comes.

[jedamum]

Points to ponder/consider;

- typically ‘as charged’ plans have much higher premiums than those who have a cap on the limit of claim.
- ‘as charged’ plans are useful when the insured is young (ie not retired) cos they have the financial capability to finance the not so hefty premiums yet, with kids who are very young - ie unable to co-finance any hospitalization bills in times of need
- due to its heftier premiums past the retirement age when the insured has limited funds to finance the daily life in addition to the premiums, ‘as charged’ plans though provide full cover for hospitalization bills in times when the insured has limited funds to finance the bill, IF the insured has a clean bill of health (or even if in dire health but still managable) it becomes a ‘burden’ to finance the yearly premiums.
- as above, will it be easier to get the grownup kids to co-finance yearly premiums of ‘as-charged’ plans for healthy retiree, or easier to get the grownup kids to co-finance the hospitalisation bills of insured party who is holding ‘plans with a cap limit’ which has a lower premium?

[ZacK]

jedamum:

- as above, will it be easier to get the grownup kids to co-finance yearly premiums of 'as-charged' plans for healthy retiree, or easier to get the grownup kids to co-finance the hospitalisation bills of insured party who is holding 'plans with a cap limit' which has a lower premium?

Wow this is a toughie jedamum reason being we are talking about the unforeseen... Some people only use $1 to buy TOTO quickpick and got $10million hongbai draw and others may spend tens of thousand over decades and may not even strike the lowest prize... Errmm not sure if this is an apt analogy

IMO... It depends on what is the extent of the cap limit, what happens if it's a prolonged and major illness that well exceeds the cap limit, would your kids still be able to cough up the remaining balance? Will they be burdened by it?

Based only on the two options that you are proposing, if the budget permits, personally for me, I will have the kids co-fund the premium for the \"as-charged\" plan, for peace of mind for both the kids and parents.

If budget is limited, perhaps can still get a higher cap limit plan and have the kids co-fund the premium.

If budget is an issue, I will get whatever plan I can afford... Because that is the best that I can make out of my situation. Having some coverage is better than having no coverage at all. JMO.

[jedamum]

Hi Zack, thanks for participating in my dilemma.

ZacK:

what happens if it's a prolonged and major illness that well exceeds the cap limit, would your kids still be able to cough up the remaining balance? Will they be burdened by it?

RE: Claim Limit
When we are looking at the difference in Claim Limit Per year for 'as charged' plans, my husband said that if the illness exceeded the $150k per yr limit, the condition is as good as gone :roll:
But then again, inflation is causing value of money to shrink; $150k Claim limit may be very little in 50yrs time.

RE: Bills exceeding Cap Limit for 'non-as-charged' plans
You are right in saying that it is an unforseen issue; it is a 'what if our kids/we can't afford the bills' vs 'what if our kids/we can't afford the hefty premiums' issue.
Our points of consideration is that if we can't afford the hefty hospitalization bills in drastic cases (ie poverty), govt hospitals allowed deferred/instalment payment. But if we can't afford the premiums, insurance coy will just terminate the policy.

ZacK:

Based only on the two options that you are proposing, if the budget permits, personally for me, I will have the kids co-fund the premium for the \"as-charged\" plan, for peace of mind for both the kids and parents.

If budget is limited, perhaps can still get a higher cap limit plan and have the kids co-fund the premium.

If budget is an issue, I will get whatever plan I can afford... Because that is the best that I can make out of my situation. Having some coverage is better than having no coverage at all. JMO.

The dilemma now is that the budget permits for now; but we can't forsee if we can sustain it for the next 60yrs especially the last 30yrs of life. That's why i need to find out from my insurer if downgrading of plans will require a re-underwriting.

I was telling my husband that we should consider using the kid's endowment funds to co-fund our hospitalization insurance coverage in our retirement years

[ZacK]

Hi Jedamum,


Those are very valid issues that you have raised... That is why financial planning is so interesting because everyone's needs and wants and values and perception towards life and issues are so varied and different.

Bounce your thoughts off your agent and weigh the pros and cons of each option. Some pros in one option may touch you closer to your heart, whatever the case may be... do not commit or make your decision unless you are at peace and comfortable with your choice.

:celebrate:

[jedamum]

ZacK:

Those are very valid issues that you have raised...

Thanks for the reassurance - before i label myself a pessimist.

These thoughts are costing me my sleep

i just want to highlight my concerns so that those who feel that they are fully covered under health insurance should revisit their policies time-to-time to view the sustainability - it is one issue to be fully covered in the short run and another to have partial coverage, but sustainable in the long run.

Just to voice out some of my further thoughts (again)...
Unless really faced with the situation, humans tend to be over-complacent (ie 'won't happen to me la') - i am definitely guilty of such . So the thought of seeking co-financing of premiums from the insured's (who is healthy) kids may be an uphill task if the insured's kids, depending on their age of marriage, may need to finance their kids' education ('sandwich generation'). so unless the insured show signs of not being in the pink of health, asking to co-fund the premiums may seem a bit difficult. Co-paying of hospitalization bills (if needed), though is more costly compared to the premiums paid out, is however a 'no-choice' situation and depending on the situation of the insured's kid's financial situation, govt hospitals are a bit flexible in bills repayment (as compared to insurance coy's premiums payment).

My husband's take is not to rely on the kids; so any one has any good get-rich plan that doesn't involve investment in bank products?