Tag Archives: insurance

What Should Expats Take Note of Before They Move To Singapore?

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When I first moved to Singapore, I didn’t really know much about the landscape here in terms of living and working. I had only visited the country via transit, so Changi airport was all I knew! Of course, the reason I chose to move to Singapore was because the pay was a lot higher than what I can get in the UK. However, I wish I did understand things before I moved here so I could make more of an informed decision. So, I’ve come up with this list, hopefully I can help some newbies who are considering to move here. 

  1. Flights

Of course, if a company is willing to relocate you over here, then they should try and cover some of the moving costs. When I first accepted my job offer, my company did in fact offer to reimburse my flight ticket. However, this was not enough to cover the full flight cost. If I remember correctly, I had to book with a budget airline direct from London; there are no direct flights from Birmingham, so that was an extra hassle for me to try and travel down there. We all know they’re a lot more expensive than they were pre-Covid, so look out and make sure that your company’s reimbursement is sufficient to cover these inflated flight costs!

2. Housing Costs

I’ve written a few articles now regarding how expensive housing has gotten in Singapore. In fact, a couple of days after I broke my last article, the government raised the additional stamp duty for foreigners from 30% to 60%! Not only that, rental has skyrocketed over the past year or so; so even though your salary might be higher here than your home country, your outgoings might be a lot more too. If you are offered a package that covers some or all of your rental costs, then I think that is ideal! Rental costs are the bulk of my outgoing expenditures each month.

3. Insurance 

I know I always go on about this, but it’s very important! I spend a lot of my personal insurance each month. When I first arrived in Singapore, my previous company gave me an allowance of $200 annually to cover insurance…let me tell you now, this is not enough. This only covered a fraction of the very basic hospital & accident insurance I purchased, let alone the additional life & critical illness insurance I later purchased. If a company offers an allowance to purchase insurance, make sure it’s at least in the thousand dollar range. But ideally, a company should provide you with a corporate insurance plan, that way you may have an opportunity to be covered for GP, specialist and dental, coverage that is normally not claimable on a personal insurance plan. Also, it’s good to know that it is mandatory for companies to provide foreigners on work permits and S passes with insurance coverage.

4. Annual Leave

I didn’t factor in how important this was when I accepted a job offer. In my previous company, when I was an English teacher, I enjoyed a lot of days off, because of school holidays et cetera. The tuition centre simply refused to open, meaning that we were unable to work. However, these days off went over our 14 days annual leave, meaning that we actually had to pay back the company the days that we did not work! This basically ate away into our bonuses. I wish I’d have found a better offer that didn’t absorb our days off in lieu this way!

5. Shares & Taxes

A lot of companies offer shares as part of their incentive. I think this is a great idea, as you basically have access to stocks (maybe even blue chips) that you wouldn’t normally have access to. However, a word of caution- and this has happened a few times with my clients; IRAS will tax you on these shares even if you haven’t cashed them out. Quite often, you are taxed when the shares are doing well and price high, then, the shares may plummet, especially during this economic uncertainty. So, you may be taxed on assets that are actually a lot higher than their current value! This could push you into different tax brackets altogether, meaning that your tax for that year will be quite costly!

6. Education Costs

As a foreigner, it is often incredibly difficult to get your child into a local school, they have to take several exams on a syllabus that they probably are not familiar with. So, for most expats in Singapore, their kids have to go to international schools. The fees for these schools can be very pricey, easily $50,000 or even more a year for some! So, factor this in before you make the move. Ideally, you can find a package that will cover some of these educational costs for you.

7. Dependent’s Pass

A lot of foreigners here are in fact trailing spouses, following their husband or wife for work. In the past, this was not so much of an issue, but over Covid, the government made it a rule that those on a dependent pass could not get a letter of consent to work. This means that if you are on a dependent pass, you may have to work remotely for your previous company overseas, or simply not at all. I do know some who have set up their own company to bypass this, but then another problem arises in having to hire a local and pay their CPF, regardless of how well your business is doing.

Some argue that Singapore is becoming less attractive for foreigners to live and work. I don’t necessarily agree with this statement, however, I think it’s key that you know all of these things to look out for and make an informed decision.

What challenges are coming to Singapore in 2023?

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I didn’t want to start of the year with a depressing post, and I assure you it isn’t going to be one, but I thought it would be useful to people to be informed on the changes that are coming to Singapore that will directly affect us this year.

  1. GST Increase

As everyone knows, GST has now increased from 7% to 8%, meaning that things are generally more expensive. Not only does this apply for small things like going out for drinks or doing the grocery shopping, but I think people, particularly expats, will feel the pinch when it comes to paying for their child’s education. International school is already incredibly expensive, and with it being very difficult to get into the state schools, it is pretty much the only option for most people with families over here.That one percent extra makes all the difference, actually. I have Heard of a few international schools allowing the parents to pay for their 2023 bills in December, meaning that they are still paying at the 7% rate, but of course of December is over and moving forward it will be 8% across-the-board.

2. Rental

I’ve been talking about this topic a lot because it directly affects me and is most expats in Singapore, because most of us do not own a property here. Unlike the UK, which I’m used to very good laws that protect the tenants, Singapore does not seem to have this. There seems to be no glass ceiling when it comes to rental prices over here, and actually, a lot of expats when considering relocating to Singapore, should take into consideration how much of their salary is going to go on paying for rent! I do wonder when the rental prices will stop increasing, and I’m hoping that in 2023 it will stop, but there is no way to be sure.

3. Means Testing For Medical

From the end of 2022, the Ministry of health have decided to implement a subsidy framework across healthcare. This of course is to help those from lower income households, who may find medical bills too expensive. This method calculates the subsidies that people will receive based on their household income, so that the government can give assistance to those that need it most. While this is great for those who really need it, there are some factors to consider that will affect all of us. The first is opting for government hospitals instead of private.

Generally, going to a government hospital means that it is a lot cheaper than going private, but of course, this is more appropriate and best saved for people who really need it, on lower income households who qualify for the mains testing. Expats in particular are rarely included in these kind of schemes, which means that generally our healthcare will still stay as expensive. And don’t forget, the Ministry of health have also implemented a drug list, which means that if you are on medication that is not on this list, you may not be able to claim it on your insurance!

4. Inflation

This seems like a really scary word now, last year Singapore reached an all-time high with its inflation rate. While the Monetary Authority of Singapore has tried to curb this, by appreciating the currency and tightening policies to try and curb the upward prices, I still think that inflation will affect us in 2023. We can already see that things such as groceries and Energy bills have increased, what will this be like in 2023? I do think that the government has done a very good job at plateauing the inflation rate, but it has plateaued at a very high point. I am looking forward to seeing it decrease in the future.

5. Recession

While the unemployment rate was very low last year in Singapore, there is something that us as expats must think about; retrenchment. Due to the recent recession, we’ve seen a lot of companies cutting people on Employment passes and S passes, and employing more locals who they don’t have to fork out large levees or salaries for. Of course, this is great for the locals, and I do think that it’s wonderful to see a country put so much effort into supporting its local citizens, but this could greatly affect expatriates living and working in Singapore. Reshuffling of large organisations could mean relocation or retrenchment.

Not only that, I have seen a real competition for S passes due to the quota system. An S pass has changed a lot over the years, with its salary for some even being comparable to those on an Employment pass, but there is strict criteria and quota that each company needs to be able to employ someone on an S pass. Leading to shortages in some companies. Not only that, as we get older and we gain more work experience, our work passes become more and more expensive to renew for the employer. This could spike the increase in unemployment rates in the expat community.

Despite all of this, of course, I still love living in Singapore and consider it my home.

I’m sure that these things are just challenges that we will have to overcome, and will not continue forever. There have been worse economic periods in the past, this is not the worst that could happen! I’m still incredibly grateful to live in such a wonderful country. Here’s to a wonderful 2023 ahead!

How Will Inflation Affect Your Long-Term Planning?

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We’re all been hearing about how bad inflation is and that it’s increasing etc. But what does this actually mean and how does it have a lasting affect on our money planning?

What Is Inflation?

Simply put, inflation is when the cost of goods and living increases. Whilst some see this as a bad thing, slight inflation is good as it is a sign of a growing economy; meaning more employment, higher profits and an increase in production. But, right now, we are seeing a significant rise in inflation. In December of 2021, Singapore saw inflation hit a 9 year high of 4%.

How It Affects Us Now

This increase directly affects us, and you may have even felt a bit of a pinch. Food is a bit more expenses and energy prices seem to have gone through the roof. All of this means that your cold hard-earned cash has less spending power, essentially meaning that you cannot buy as many things with the same amount of money as you used to. What further exacerbates this problem is bank interest rates; most current accounts in Singapore have an annual interest rate of 0.05%, meaning the bank gives you that much extra each year (not a lot at all). If current inflation rate is at 4%, you are losing 3.95% of your money every year by just leaving it in your bank account! This means that whilst you are earning money, not only are things getting more expensive but you’re losing money in your bank account too!

How It Affects Our Future

As you can imagine, this situation has a massive knock-on effect for our futures. If inflation increases, or even plateaus at say about 2%, you are still losing money in your bank account. Food, housing, medicine and energy will continue to go up in price, meaning each year you will either be able to afford less, or have to spend more to keep up. Not only that, your savings will not be as powerful as it once was…so you can see how this is a problem two-fold!

How Can We Stop This?

But fear not! If we prepare now ahead of time, we can manage inflation so that it doesn’t eat away at our savings. There are a few things you can do in preparation: first, include inflation in any planning you do. Want to save up for a holiday in 5 years’ time? Inflate your ticket and hotel prices by at least 2% per annum (3% if you want to be safe). Secondly, consider using vehicles and instruments that will offer you higher returns than your current bank account- any % higher than current inflation rate will give you a positive yield, and will ensure that your savings don’t run dry. I also think it’s best to create multiple avenues for growing your money, so that if one option is not doing well, at least you have money in different areas that you can withdraw from. Lastly, do not underestimate how much different sectors will increase. Food, healthcare, housing etc. do not always follow the same trend or inflation rate. Ensure you have medical expenses covered and calculated into your long-term planning, as well as remembering that your income will not go as far in future unless you ensure there are increases.

Essentially, it is best to start planning now instead of panicking later on in life, realising that you could have prepared for inflation but didn’t. As always, it’s best to stay in-the-know, and consult a professional when it comes to your financial planning.

Hospital & Cancer Insurance; Updates YOU Need To Know About

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  There have been some new updates to Integrated Shield Plans (hospital insurance) in Singapore you need to know about. The MediShield Life Council reported that spending on cancer drugs has been increasing by 20% a year; a stark contrast to the 6% spending increase for other drugs. To curb these rising costs, MOH has come up with a Cancer Drug List.

The Cancer Drug List contains drugs that are effective and cost-efficient drugs and treatments that insurance companies will cover. If the drug is effective but not cost-effective, insurance will not cover it. Not only this, even if the drug is very cheap, but does not improve the cancer treatment, insurers won’t cover.

Those with Integrated Shield Plans, will not allowed to be covered for treatment not on the list, even if they are still on treatment. Although this sounds very daunting, MOH has stated that close to 90% of current cancer drugs and treatment in Singapore are on this list.

While this isn’t ideal, and of course may affect many people, it does mean that your insurance premiums won’t skyrocket up and up each year. Medical inflation is already very high in Singapore; this is one way the government are stepping in to stop it from going out of hand.

But what does this mean for insurance moving forward? I would strongly suggest adding a cancer coverage to your portfolio, to cover the shortfall of possibly having to pay for a drug not on the Cancer Drug List. Receiving a lump-sum payment can help pay for monthly cancer drug expenses, which can be approximately $2,300 a month.

How do you think this affects you in Singapore?

Is Corporate Insurance Enough?

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One of the benefits of being an expat in Singapore is that a lot of the time, your company will provide you with insurance. This, know as Corporate Insurance or a Group Policy is a great relief for many expats- the company will reimburse for any hospital costs, and they don’t have to worry about navigating the somewhat complex insurance/medical landscape of Singapore.

  But is this insurance sufficient for you? Let’s delve further…

Coverage

Whilst company coverage has its strong points, like GP & Specialist reimbursement, sometimes it really lacks in certain areas. Generally, most basic group insurance packages come with quite low hospital coverage. You will also want to check if this covers private as well as government hospitals. Turnaround time at private hospitals tend to be very fast in comparison to government, so it would be good to have that option.

  Personal hospital policies tend to have very high coverage in comparison. Moreover, you can tailor coverage such as death, critical illness and disability, based on your exact needs and budget.

Service

With most group insurance, in order to claim you must either contact your HR or upload your claim to an app and wait for an approval. A lot of the time the insurance agent will not be at your beck and call, as they service every claim in the company, not just yours. And if your company has gone through a broker, it can be even more difficult to make direct contact with your insurance company. Sometimes, if your company has gone for an international insurer, you may be stuck calling an overseas hotline.

  In contrast, if you choose your personal advisor wisely, they will be more than happy to help you with all of these admin chores, from filing claims, to booking appointments, to contacting the insurance company directly on your behalf.

Longevity

This is very dependent on how long you think you will stay in the current company you work for. If you think you’ll stay with one company your whole time in Singapore, then great, you can rely on their coverage. But, what if you want to switch, and the new company doesn’t offer insurance benefits? Or maybe they do, but it isn’t as comprehensive, or they don’t include dependents? You may be in a bit of a tough spot, particularly if you have had pre-existing conditions, or if you’ve claimed in the past. This may rule you out from getting a personal plan.

Bumps In The Road

Building on my last point, there may be a lot of issues you could face, that you wouldn’t from a personal policy. Your company may decide to change provider, in order to minimise costs, which may lead to discrepancies in your coverage, especially if you are already going through a claim or have a surgery planned. With a personal plan, so long as you keep up with your payments, you cannot get excluded from any coverage after purchasing. It’s always best to plan your insurance whilst you’re healthy and able to purchase; so relying on your corporate insurance may mean that you delay this crucial planning.

I always say to my clients that Corporate Insurance is a great base of coverage; it’s a good safety net and it’s a wonderful benefit for your company to provide. However, I always encourage expats to get personal coverage, to ensure that their protection is in their own hands, and not the hands of a company that may switch or drop coverage in the long run.

Singapore Expat Money Myths

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I’ve had a lot of discussion with people in Singapore, expats and locals, and there seems to be a lot of rumours about what foreigners can and can’t do with their money here. Whilst Singapore is one of the most heavily regulated countries, it is still a financial hub for a reason. So I’m here to bust some of the most common money myths…

Myth: Expats are not eligible for tax relief schemes in Singapore

Fact: There are many tax reliefs that foreigners that are living and working in Singapore can claim. Many expats think that, because they are employed by a company, their tax is fixed to their salary bracket. This is a common misconception. First of all, if an expat has their spouse, children and parents living here with them as dependents, they can claim relief on their taxes. You may also be eligible for a tax relief if you have employed a foreign domestic worker. Not only that, you can also claim business expenses and life insurance relief with IRAS. For insurance policies, anything that has a death benefit (under your name for yourself or your spouse), is eligible for a maximum of $5,000 per year. Do note though, that insurance through your company, or hospital insurance is not applicable.

  SRS is also a great way of utilising tax relief. A foreigner can contribute a maximum of $35,700 into a Supplementary Retirement Scheme. This account can be used to invest for retirement, and upon withdrawal only 50% is taxable. Everything inside the account is eligible for tax relief. You bank will automatically inform IRAS.

Myth: Expats can’t buy local insurance plans, so their medical insurance is expensive

Fact: Expats can buy local plans, and they can be approximately 4 times cheaper than international plans. A lot of foreigners don’t know that local hospital plans (known as Integrated Shield Plans) are available for them; the only difference is that locals can use their Medisave account to pay for this, we just have to pay in full. But this often works out to be a lot cheaper than international plans, that cover all countries- the cover is more than sufficient and it is often not necessary to have a plan that covers all countries, as that’s what travel insurance is for.

Myth: Expats can’t buy property in Singapore

Fact: Foreigners can buy condos (all over Singapore) and landed properties (in Sentosa). We can’t buy HDBs or landed (not in Sentosa) and expats have to pay Additional Stamp Buyers Duty of 30%, but it is not impossible for foreigners to get on the property ladder here. Some nationals, such as those from the US, are even exempt from paying Additional Stamp Buyers Duty! Foreigners, contrary to popular belief, can even get a bank loan for this housing.

Myth: It’s difficult for expats to invest in Singapore

Fact: Not only is it easy, it’s extremely beneficial. Because expats don’t have CPF, starting an investment plan here is a great way to make your money go further. Singapore is a financial hub, not just for Singaporeans, but for the whole world! And with it being highly regulated, it means that investing in financial institutions is a robust and less-risky way of handling your money. The Singapore dollar is strong, and your investments here can be managed even if you want to move abroad, including withdrawal.

Myth: Insurance is for Singapore only

Fact: Life insurance can be paid out to expats even if they leave Singapore. This goes for accident, disability and critical illnesses too. Sometimes, our health deteriorates even if we’re no longer in the hospital, affecting our ability to earn an income and support our families. That’s why insurance policies in Singapore are there for you for life, wherever you go.

I hope that has dispelled some major money myths for all the expats out there. Have you experienced any other money myths you found out to be false?

You Could Be Paying 4 Times Too Much For Insurance!

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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?

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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

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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!

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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!