Thursday, December 08, 2005

No claim discount for health insurance

SUGGESTION FROM POLICYHOLDER:

I hope one day NTUC will also offer NCD for all its health products (there
is one in the industry that offers up to 30% NCD at this moment), which will
reward those people that maintain their good health. This is for sharing
only...

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MY REPLY:

We now offer 10% discount under Incomeshield if there is no claim for 3 years. We hope to be able to maintain this discount in the future, provided that our claim experience remain favourable.

I want you to know why the scale of NCD for motor insurance is different from health insurance.

In motor insurance, we have a claim rate of 20%. In Incomeshield, the claim rate is about 5%.

Due to the difference in claim rate, the NCD has to be reflected differently. Generally, if the claim rate is higher, it is possible to justify a higher rate of NCD to different between the good risk and the poor risk.

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