## Sunday, July 20, 2008

### Cost of Private Shield

A reader asked how it is possible for the cost of a private Shield plan to be more than \$100,000 for ages 30 to 85.

You can add up the total cost from the websites of the insurance companies. Here is an example from NTUC Income:

For the enhanced plan (subject to deductible and co-insurance):

For the plus rider (to cover the deductible and co-insurance)
http://income.com.sg/insurance/incshieldplus/

Add up the premium rate for plan P (which covers private hospital) for the ages from 30 to 85. Remeber to muliply by the number of years in each category. I got a total of \$102,344.

This does not include the cost beyond age 85, and also for future increases in premium rates due to medical inflation. These rates are not guaranteed at the current level and can be adjusted in future years.

You can find out the premium rates charged by the other insurance companies for their private Shield plan. I believe that the total cost will be higher, i.e. more than NTUC Income.

Wayne Koh 许伟源 said...

Yes, Mr Tan is correct!
Q: How much does it cost to have an "As-charged" Shield plan from age 30 to 85?
A: \$32,311 + \$46,563 + \$24,034 = \$102,908
(Enhanced Incomeshield Preferred Plan + Assist Rider)
Among which \$32,311 comes from CPF Medisave & the rest from cash. The cash portion is high due to the CPF ruling that one can only use up to a maximum of \$800 per year for such shield plan.

I have developed an Excel spreadsheet that calculates the cost in any given age range (age 1 to 99, 20 to 65, 30 to 85 etc).
These are namely the four insurers that I have put side by side in my spreadsheet: Income, Aviva, Prudential, Great Eastern.

Though the figures stated look intimidating, the actual fact is that we have a "friend" called "CPF interest"; If one aged 30 now has \$10,105 in his/her CPF Medisave account, it will be sufficient to cover the premiums til age 85 (provided CPF Medisave interest maintain @ 4.0%-4.5% and the premiums do not increase substantially over time) based on today's calculation.
And for the cash portion, he/she can start saving NOW for it, for example, saving up part of annual bonus or on a monthly regular basis, i.e my favorite "drip in money" way. To top it up, do it via SRS and save on income taxes as well.

If anyone is keen to find out how much is your own shield plan (projected cost), you can fill out this form http://waynekoh.wufoo.com/forms/insurancemedical-shield-plan-calculation/ with your details, and I can calculate and email to you within 48 hours of your submission.
p.s: This is free "national service" for residents of Singapore, including PRs. By the way, I am an IFA in case you wonder.

This answer is extracted from http://www.waynekoh.com/2008/07/shield-plan-cost-age-30-to-85.html

References to my previous articles:
http://www.waynekoh.com/2008/04/do-you-have-s9k-in-your-medisave.html
http://www.waynekoh.com/2008/05/post-retirement-hospitalization-and.html

Yong Kiat said...

For me, at age 28, I currently have Enhanced Incomeshield with Plus Rider, so I have to pay S\$ 204 for both.

I feel that I should get the best shield plan available when I am young, and I don't have much Medisave now (only have around S\$ 6,000). You can downgrade but not upgrade easily.

But I give myself a budget of \$ 500 per year for such insurance.

Hence, once I hit my 40s, I will start to downgrade to lower plans as the cost will exceed S\$ 500.

By the time I reach 66, I might have only basic Medishield coverage , by then I have retired and have lots of Medisave savings. I will then continued my Medishield coverage till age 85, even the premium will cost more than S\$ 500.

For that, from age 25 to 85, I would spend around S\$ 30,000 for Shield Plans in my lifetime.

But if one day I get cancer, the cost of treatment may cost S\$ 150,000.

Tan Kin Lian said...

Dear Yong Kiat,
If you are covered by your employer for medical benefits, you should buy a Medishield for \$100 or less. You should save the \$400 which you will need in the future. Do not waste your money now, as your Medisave savings is still quite low.