You Could Be Paying 4 Times Too Much For Insurance!

Hospital plans are an absolute must in Singapore; with the average hospital bill being approximately $40,000, you must ensure that you are covered. Many expats want an international plan, as it often seems like there are more benefits. But, did you know that most international plans are around 4 times the price of local ones?

For the past two years (I can’t believe it’s been that long), we have been unable to leave Singapore due to Covid-19. This means that less people are able to travel freely to their home countries or on holiday, so why pay for an international insurance policy during this period?

The pros of an international policy are that you are covered worldwide at the same amount of coverage as you would in Singapore. However, this often means that the coverage you are offered is slightly lesser than local plans. Local hospital plans are often able to provide customers with maximum coverage, because there is not that extra risk of claiming abroad. Not only that, claiming through a local company is often a lot easier than with an international one, as you can directly contact your agent who is in the same time zone as you, instead of calling a hotline based abroad.

But what if I am hospitalised abroad and a have a local health insurance? Not to worry- did you know that most local plans cover hospitalisation abroad if it is due to an accident or emergency? But, if you are planning to be hospitalised abroad, I would suggest using a top-up insurance from that country, or a travel insurance.

Not only that, if boarders open it’s very easy to switch from a local plan to an international one. So, what is the point of paying for an international plan when you’re not going abroad?!

I did a comparison for myself on different insurance policies. I am currently 27, non-smoker, and I am paying $1,192 per year for a hospital plan that covers private hospitals. I am covered for $2,000,000 per policy year, and I can go to panel and non-panel doctors so long as I pre-authorise (something which very few companies offer). This is with a local company. When I check international plans, some are offering worldwide coverage of $1,000,000 for double the price. Some are offering $2,5000,000 coverage for over four times the price, of over $5,015 a year. This to me, seems like a no brainer to go for a local plan during this period than an international one.

As an expat, I feel that the term ‘international insurance’ is very alluring and may seem like the best option. But, if you delve a little deeper, read in between the lines and compare costing, it is quite often an unnecessary expense. Comment or contact me if you want to know how I planned my health insurance!

Investment vs Insurance- Which is More Important?

Whether we like it or not, when we become adults, we have to start thinking about our personal finances and planning our future. For those who have not been taught about finances (I know pretty much none of us learnt this in school), planning finances could be a daunting task. The words ‘investment’ and ‘insurance’ often fill people with dread; is it a scam? Why should I spend my money on that? Do I need it?

The long and short of it is, both are important and you need both. But is one more important than the other? Let’s look at both and see for ourselves.

There are lots of kinds of insurance products but they all cover one thing- loss. The whole point of insurance is that it covers us if something goes wrong. This may be a hospitalisation, a disability, an illness, or some other kind of liability that would set us back financially. It is meant for protection; protecting us from the adverse effects of not being able to work or financial hardships. Many people think that planning for these things, such as death or disability, is a morbid topic and a worst-case scenario. But good health is never guaranteed, and it’s always best to get these things sorted before it’s too late. Insurance products also become more expensive as you get older, so it’s best to start early, so that these payments don’t interfere with any of your future life stages like purchasing a house or sending your kids to school.

Investing is all about growing money for our future- we can either plan for a passive income stream, so that we don’t have to rely on work so much. Or, we can plan for capital gains, so that we have a nice chunk of money when we want it. The idea of making money with not necessarily putting too much effort in (check out my articles about passive investing), is an attractive one. And, if we make all this money, why do we even need insurance?

Unfortunately, the truth of the matter is, it is unwise to have one without the other; investment increases our upsides, but insurance protects our downside. If you invest without being insured, you run the risk of losing it all should you fall sick or become hospitalised (also, can I just say, it’s very naïve to think you will stay healthy forever), especially if your investments are not enough to pay for your bills. If you just insure yourself without investing, you are selling yourself short, only planning for the bad things that can happen, and not planning for the good times ahead. It also means that you may have to constantly work and never be able to retire. Neither insurance nor investments will work on their own; you need to plan and review both in order to be financially successful.

A very important thing to take note of is that investments take a long time to accumulate, especially if you cannot set aside a lot of money to invest. Insurance policies cover you pretty much as soon as you get them. So, it’s always important to sort your insurance out first; once you are protected you can focus on growing your money.

But do remember that investing and insurance is never fixed and one-size-fits all. You need to constantly review your finances in order to keep up with your changing needs!

How To Cope With Co-Payment

A few weeks ago, I wrote an article about the changes to medical insurance here in Singapore. If you haven’t read it yet, please go and have a read. As of April 2021, all insurance companies in Singapore will have to introduce a co-payment system; whereby the patient will have to fork out a portion of the hospital bill, which cannot be claimed or reimbursed.

So how do we tackle this problem? I will explore a couple of solutions here; long and short term.

Short-term Solution

To counteract the impact of losing some of your money to co-insurance and deductible on a medical bill, you can choose to include a hospital income plan to your insurance policy. This plan will pay you cash each day you are hospitalised and recovering at home, regardless of the cost of the hospital bill. This is a good way to fill the shortfall that you cannot claim, and it can be used for each time you are hospitalised. This is a quick and cheap option to save on that bit of cash.

Long-term Solution

Medical inflation increases year by year, and it is a problem that will not go away. Obviously, a hospital income plan can only go so far to counteract the rising cost of healthcare in Singapore. There are some ways in which you can prepare for a bit hospital bill in the long run.

Consider adding an extra plan to your insurance portfolio that is kept only for long term use and emergencies only. You can start by putting a small amount of your savings into a plan that will grow this cash for you at a better rate than the bank. Not only that, you can include insurance coverage in this plan. So, if the worst should happen and you are diagnosed with a critical illness or become disabled, you have a lump sum pay-out to supplement the cost of treatment, or help you with adjusting to your new lifestyle. No one likes thinking about these things happening, but it is best to prepare for the worst before you run into any problems. Hindsight is a wonderful thing, but it will not help when it comes to paying for a hospital bill.

I have posted a QR Code below to my WhatsApp should you have any questions or need help planning this out. If you would like me to review your current policy I would be more than happy to do that also.

Singapore: Important Updates to Insurance You Need To Know About!

As we all know, Singapore does not offer free healthcare; for locals, a lot is subsidised by their Medisave but for expats we must pay the full cost and wait for reimbursement from our insurers.

But there will be some new changes this year that all insurers in Singapore will have to follow, which will affect the consumer. Here’s what you need to know.

In March 2018, the Ministry of Health announced that insurers will have to stop offering plans that cover the full cost of hospital bills, and riders that do so will have to contain a ‘co-payment’ feature. This means that patients will have to foot part of their hospital bill, in order to keep healthcare costs sustainable.

From now on, if policyholders are hospitalised, they will have to pay 5% (at least) of the hospital bill. This co-payment is the government’s attempt to maintain policy premiums, and encourage responsible usage of the Singapore Healthcare System…doctors and patients alike.

So what can we, as a customer, do to ensure that we can keep up with these changes? The first is to double-check what your company provides in terms of insurance coverage, as company plans will often cover different things than personal. Second, ensure you have an accident plan that includes some medical reimbursement benefit. Therefore, if you are hospitalised due to an accident, you can claim somewhat off this plan. The third and, in my opinion, the best method is to ensure you have some sort of plan you can use as an ‘emergency medical fund’. Pay into this fund for a few years and, should anything happen, you can use this to cover the co-payment. It can also include features that will cover you should you become disabled, or suffer from a critical illness.

Have you readjusted your medical planning? Do you have any questions in regards to your insurance or future planning? If so, comment below or send me a message!

Covid Vaccine Cover!

Hi There! Are you planning to take the COVID-19 Vaccine? I’m here to give you a confidence boost as you take this brave step. AIA is now offering a COVID-19 Vaccine Cover for FREE!

Apply by 30 April 2021 to enjoy the following benefits up till 31 December 2021.

1)      Up to $1,000 cash pay-out if you’re hospitalised due to COVID-19 Vaccine Complications.

2)      $500 lump sum cash pay-out if you’re hospitalised due to COVID-19.

*T&Cs apply. Please refer to the application website for full details. Protected up to specified limits by SDIC.

Contact me to find out more or simply click on the link below to apply now!

https://www.aia.com.sg/en/AIACovid19VaccineCover-app.html?unique=79672