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<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Cover yourself before it's too late
</TR><!-- headline one : end --><TR>Personal medical plans are essential as most group policies are not portable </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Lorna Tan, Finance Correspondent
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
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-- ST PHOTO ILLUSTRATION
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->Relationship manager Stephen Tang never thought of buying a personal medical plan as he has always counted on his employer's insurance programme.
It dawned on him only when he got the pink slip last month that he now faces the gloomy prospect of not having any medical coverage.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>MEDICAL INSURANCE: A QUICK GUIDE
Hospital and surgical
This type of policy reimburses expenses for inpatient and some outpatient medical treatments.
</TD></TR></TBODY></TABLE>To make matters worse, he was diagnosed with high blood pressure last year.
This means that insurers may shy away from covering this condition or they may charge Mr Tang, 37, a higher premium for providing medical cover.
He is not alone. The group medical insurance programmes provided by most firms to their staff are not portable.
The coverage ceases when the person leaves the job.
By that time, he may no longer be considered insurable if he has been diagnosed with certain medical conditions.
Unless you have vast savings to dig into to cover health-care expenses, the majority of us are better off buying a suitable medical plan.
The good news is that it need not burn a big hole in your pockets as the premiums for some plans are payable from your Medisave accounts.
It is easy to get confused by the various health-care insurance plans and jargon.
In fact, many people buy a given medical plan believing it is sufficient when it is not.
For instance, many Singaporeans buy a critical illness plan thinking it will cover hospitalisation expenses, only to find it does not allow such claims.
Here is a quick guide:
Hospitalisation & surgical (H&S) insurance
It covers the expenses for inpatient medical treatment or surgery, including some outpatient charges for day surgery, consultations with specialists and tests before and after hospital stays, as a result of an illness or accident.
You will be paid no more than the actual medical expenses incurred, regardless of the number of plans you own.
And depending on your policy, there are limits on the amount you can claim.
Examples include: MediShield plans, which provide the basic level of H&S cover at class B2 and C wards in restructured hospitals like Tan Tock Seng, and private Shield plans which provide more cover at higher premiums.
While MediShield is administered by the Central Provident Fund Board, Shield plans are provided by private insurers.
The premiums for MediShield and private Shield plans can be paid from one's Medisave, subject to an annual cap of $800.
The downside is that the benefits payable for some H&S plans may be subject to specified limits such as room and board, so it is prudent to shop around and check out the full benefits.
Critical illness insurance
Also known as dread disease insurance, it provides you with a lump- sum payment to tide you over the initial period of being diagnosed or treated for an illness covered by the policy.
This could protect against a loss of income or go towards medical and other expenses.
Do note that only 30 specified illnesses are covered under this plan and benefits are payable only if the disease or surgery exactly meets the policy definition.
The payment is independent of whether you are hospitalised or your actual medical bill.
Early this month, British insurer Prudential introduced a critical illness 'PRUmultiple crisis cover' plan that enables policyholders to claim up to three times the sum assured.
It is also a stand-alone plan which means that it need not be bundled with a whole life, term or endowment plan.
The two features make the cover unique as most critical illness plans will allow just one claim payout once a dread illness is diagnosed.
Mr Gregory Fok, a financial planner at Canadian insurer Manulife, advises customers to understand the definition of each illness before buying the cover.
This is to avoid misunderstandings on what can or cannot be claimed in future.
In 2003, the insurance industry standardised the definitions of the 30 critical illnesses.
As a result, not all cancers are covered. They include pre-cancerous conditions like non-invasive breast cancer or cancers with low risk of metastases like skin cancer.
Disability income insurance
It pays a fixed regular replacement income if you are unable to work due to an illness or accident. This will allow you to continue to pay for your daily expenses and upkeep and that of your dependants.
It typically pays no more than 80 per cent of your average monthly pay.
The definition of disability under this cover is less stringent than that for total and permanent disability, as defined in most life plans. For instance, this policy pays when the insured is partially disabled.
The downside is that the cover is up to age 65 only.
Also, certain occupations are not insurable, such as armed forces personnel, divers and pilots, notes Ms Tang Yin Fong, wealth management firm Providend's risk management specialist.
Long-term care insurance
It pays a fixed sum each month for a specified period, if you are suffering from a debilitating illness that requires long-term care services.
An example of such a product is ElderShield. It provides a monthly sum should you be unable to perform at least three of six so-called 'activities of daily living', such as feeding, washing, dressing, using the toilet, mobility and transferring from a bed to a chair or vice versa.
Customers who are at least 40 years old are eligible to buy ElderShield cover.
Hospital income insurance
It pays a fixed daily amount, say $300, for each day of hospitalisation resulting from an accident or illness.
The coverage is independent of the actual expenses incurred for your hospital stay.
The payment is usually limited to a specified number of days per hospitalisation.
The downside is that the payout under this plan is small relative to the cost of treatment and the cover is limited, says Mr Fok.
Which medical plan should I own?
Financial experts like Ms Tang say that an H&S plan is a 'must' for anyone as it protects against rising health-care costs.
In Mr Fok's opinion, a private Shield plan is a must as it provides more comprehensive cover.
This is particularly so as they are typically 'as charged' plans that do away with the benefit limits.
This means the policyholder is almost covered for the hospital bill, subject to deductible and co-insurance.
The deductible is the portion of a claim that the policyholder has to bear before the insurer pays any benefits, while the co-insurance is a fixed percentage of the claim - what is left after the deductible is accounted for.
What if you have a limited budget? Mr Fok says that one could consider both the MediShield and ElderShield plans as they can be paid for from one's Medisave.
Both Ms Tang and Mr Fok agree that the next medical plan to consider is the critical illness cover, followed by the disability income plan.
Says Mr Fok: 'As a critical illness usually incurs high treatment costs, we should get ourselves covered as early as possible, within affordable premiums.'
He recalls that he recently helped a 29-year-old client make a claim under his critical illness policy after he was diagnosed with lymphoma, or cancer of the lymph nodes.
'In the event of illness, a lump- sum payout from the policy can help to tide over the difficult period and hopefully pay for the best medical care available when one needs it most,' he explains.
'In the case of the young client, his family has no history of cancer or other related illnesses.'
Most financial experts believe that if a comprehensive H&S plan is in place, a hospital income cover is a 'good to have' plan but not essential, mainly because the payout is relatively small.
[email protected] <!-- end of for each --><!-- Current Ratings : start --><!-- Current Ratings : end --><!-- vbbintegration : start -->
</TR><!-- headline one : end --><TR>Personal medical plans are essential as most group policies are not portable </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Lorna Tan, Finance Correspondent
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
-- ST PHOTO ILLUSTRATION
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->Relationship manager Stephen Tang never thought of buying a personal medical plan as he has always counted on his employer's insurance programme.
It dawned on him only when he got the pink slip last month that he now faces the gloomy prospect of not having any medical coverage.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>MEDICAL INSURANCE: A QUICK GUIDE
Hospital and surgical
This type of policy reimburses expenses for inpatient and some outpatient medical treatments.
</TD></TR></TBODY></TABLE>To make matters worse, he was diagnosed with high blood pressure last year.
This means that insurers may shy away from covering this condition or they may charge Mr Tang, 37, a higher premium for providing medical cover.
He is not alone. The group medical insurance programmes provided by most firms to their staff are not portable.
The coverage ceases when the person leaves the job.
By that time, he may no longer be considered insurable if he has been diagnosed with certain medical conditions.
Unless you have vast savings to dig into to cover health-care expenses, the majority of us are better off buying a suitable medical plan.
The good news is that it need not burn a big hole in your pockets as the premiums for some plans are payable from your Medisave accounts.
It is easy to get confused by the various health-care insurance plans and jargon.
In fact, many people buy a given medical plan believing it is sufficient when it is not.
For instance, many Singaporeans buy a critical illness plan thinking it will cover hospitalisation expenses, only to find it does not allow such claims.
Here is a quick guide:
Hospitalisation & surgical (H&S) insurance
It covers the expenses for inpatient medical treatment or surgery, including some outpatient charges for day surgery, consultations with specialists and tests before and after hospital stays, as a result of an illness or accident.
You will be paid no more than the actual medical expenses incurred, regardless of the number of plans you own.
And depending on your policy, there are limits on the amount you can claim.
Examples include: MediShield plans, which provide the basic level of H&S cover at class B2 and C wards in restructured hospitals like Tan Tock Seng, and private Shield plans which provide more cover at higher premiums.
While MediShield is administered by the Central Provident Fund Board, Shield plans are provided by private insurers.
The premiums for MediShield and private Shield plans can be paid from one's Medisave, subject to an annual cap of $800.
The downside is that the benefits payable for some H&S plans may be subject to specified limits such as room and board, so it is prudent to shop around and check out the full benefits.
Critical illness insurance
Also known as dread disease insurance, it provides you with a lump- sum payment to tide you over the initial period of being diagnosed or treated for an illness covered by the policy.
This could protect against a loss of income or go towards medical and other expenses.
Do note that only 30 specified illnesses are covered under this plan and benefits are payable only if the disease or surgery exactly meets the policy definition.
The payment is independent of whether you are hospitalised or your actual medical bill.
Early this month, British insurer Prudential introduced a critical illness 'PRUmultiple crisis cover' plan that enables policyholders to claim up to three times the sum assured.
It is also a stand-alone plan which means that it need not be bundled with a whole life, term or endowment plan.
The two features make the cover unique as most critical illness plans will allow just one claim payout once a dread illness is diagnosed.
Mr Gregory Fok, a financial planner at Canadian insurer Manulife, advises customers to understand the definition of each illness before buying the cover.
This is to avoid misunderstandings on what can or cannot be claimed in future.
In 2003, the insurance industry standardised the definitions of the 30 critical illnesses.
As a result, not all cancers are covered. They include pre-cancerous conditions like non-invasive breast cancer or cancers with low risk of metastases like skin cancer.
Disability income insurance
It pays a fixed regular replacement income if you are unable to work due to an illness or accident. This will allow you to continue to pay for your daily expenses and upkeep and that of your dependants.
It typically pays no more than 80 per cent of your average monthly pay.
The definition of disability under this cover is less stringent than that for total and permanent disability, as defined in most life plans. For instance, this policy pays when the insured is partially disabled.
The downside is that the cover is up to age 65 only.
Also, certain occupations are not insurable, such as armed forces personnel, divers and pilots, notes Ms Tang Yin Fong, wealth management firm Providend's risk management specialist.
Long-term care insurance
It pays a fixed sum each month for a specified period, if you are suffering from a debilitating illness that requires long-term care services.
An example of such a product is ElderShield. It provides a monthly sum should you be unable to perform at least three of six so-called 'activities of daily living', such as feeding, washing, dressing, using the toilet, mobility and transferring from a bed to a chair or vice versa.
Customers who are at least 40 years old are eligible to buy ElderShield cover.
Hospital income insurance
It pays a fixed daily amount, say $300, for each day of hospitalisation resulting from an accident or illness.
The coverage is independent of the actual expenses incurred for your hospital stay.
The payment is usually limited to a specified number of days per hospitalisation.
The downside is that the payout under this plan is small relative to the cost of treatment and the cover is limited, says Mr Fok.
Which medical plan should I own?
Financial experts like Ms Tang say that an H&S plan is a 'must' for anyone as it protects against rising health-care costs.
In Mr Fok's opinion, a private Shield plan is a must as it provides more comprehensive cover.
This is particularly so as they are typically 'as charged' plans that do away with the benefit limits.
This means the policyholder is almost covered for the hospital bill, subject to deductible and co-insurance.
The deductible is the portion of a claim that the policyholder has to bear before the insurer pays any benefits, while the co-insurance is a fixed percentage of the claim - what is left after the deductible is accounted for.
What if you have a limited budget? Mr Fok says that one could consider both the MediShield and ElderShield plans as they can be paid for from one's Medisave.
Both Ms Tang and Mr Fok agree that the next medical plan to consider is the critical illness cover, followed by the disability income plan.
Says Mr Fok: 'As a critical illness usually incurs high treatment costs, we should get ourselves covered as early as possible, within affordable premiums.'
He recalls that he recently helped a 29-year-old client make a claim under his critical illness policy after he was diagnosed with lymphoma, or cancer of the lymph nodes.
'In the event of illness, a lump- sum payout from the policy can help to tide over the difficult period and hopefully pay for the best medical care available when one needs it most,' he explains.
'In the case of the young client, his family has no history of cancer or other related illnesses.'
Most financial experts believe that if a comprehensive H&S plan is in place, a hospital income cover is a 'good to have' plan but not essential, mainly because the payout is relatively small.
[email protected] <!-- end of for each --><!-- Current Ratings : start --><!-- Current Ratings : end --><!-- vbbintegration : start -->
