Singaporean life expectancy reaches to 81 years old for males and 86 for females.
What does this mean?
You can live way longer than your retirement age and you don’t want to worry about financing your health needs by that time! More than 20 years ago, Singaporeans heavily depend on their employers for a health care benefit. Now, there is MediShield Life.
Defining MediShield Life
Directed by the Central Provident Fund (CPF) Board, MediShield Life protects all Singapore citizen and permanent residents. This national health insurance subsidies treatment in public hospitals. However, this will not cover the whole bill especially if you choose to stay in a Class A/B1 wards.
There is no need for an application since all citizens and residents are automatically included. While this sounds good, remember that not all healthcare services will be covered.
If you want a wider coverage, you will need to choose a health insurance plan that best fits you. Some health insurance policies cover the lost income during the period of hospitalization; while others cover the costs of nursing care and other medical treatment.
Consider these following questions.
What is your purpose?
Health insurance plans have different purposes:
- If you want a policy that covers your hospital and surgical (medical) expenses, consider Medical Expense Insurance.
- If you want to receive a certain amount of cash while being hospitalized to cover your lost income, buy a Hospital Cash Insurance.
- If you want to get a lump sum of cash after a diagnosis of a terminal illness you can avail Critical Illness Insurance.
- In case you want to replace your income during a disability, you will need a Disability Income Insurance.
- If you want to have your health care paid when you are severely disabled or too ill, you have to get a Long-Term Care Insurance.
Which class of ward are you most likely to use?
There is a difference from your ideal ward and the ward you will most likely to use depending on your means. When choosing a health insurance, most people think of getting the best choice when this is usually the most expensive.
Health Insurance will not cover the whole cost of your health care. You will have to pay an initial amount since they usually require the holder to pay around 10% of the bill. This initial amount is called “deductible.”
So, if you stay in a subsidised C class ward, you will need to pay the deductible cost of $1,500. For A class or private hospital, the deductible is $3,500.
Choose the affordable class based on your capacity to pay. Learning and getting ready with the cost of the deductible will help you get ready in case that you’ll need to use the insurance benefits.
Can you handle the premium in the future?
Usually, you can find the current premium rates. You can use this to compare rates for now, but do not forget that the premiums will go up in a few years.
Health insurance is long-term commitments. What you are paying now will increase in five years, so make sure you can still afford it by that time. Also, you have other financial responsibilities to handle and possible emergencies to deal with.
Remember that failing to pay your agreed premium may cause your insurance to lapse. While you want to have a great coverage for you and your loved ones, it is still better to have lesser coverage that you can diligently pay.
Do you have an existing chronic illness?
Some health insurance providers do not accept applicants who have pre-existing conditions. Others do, but they have higher premiums.
If you are worried that you will need expensive health care services such as a regular dialysis, it is worth to buy a more expensive plan. Usually, these plans are only available in higher A class and private hospital plans.
Do you need a rider?
A rider is an add-on you can purchase on top of a plan. With this, it is possible that you will not need to pay any deductible nor do a co-payment. However, riders are very expensive. Take into consideration whether you can still pay it until you get old.
The downside of this option is that people feel obliged to use the free services that come with it. Even if they do not need to. Also, certain doctors charge higher fees after learning that their patients do not need to personally pay the bill.
There is a notion that services have to be consumed. This will cause the premium and the rider to increase the costs faster than they should.
A health insurance is a good tool to protect you from the financial blow caused by sudden health care needs. Nobody wants to get sick or hospitalized; however, you will be thankful that you have an insurance.
On the other hand, the need for a great coverage needs to have a balance with your ability to pay the premium continuously. You must make sure to handle the payments at ease through proper financial planning.
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