Tan Kin Lian's Blog: Private Shield with Riders

Sunday, August 10, 2008

Private Shield with Riders

What is the cost of a Private Shield plan, covering medical bills as charged in a private hospital, together with a rider to cover the Deductible and Co-insurance of 10%?

I calculated the total cost from age 30 to 85 to be more than $100,000, based on the premium rates today. If you add the cost beyond age 85, it will be much higher. The premum rates will increase in future years, but the future increase can probably be covered through the interest earned on your savings.

If you wish to have a private Shield plan to cover your expenses in a private hospital, you must have $100,000 in your Medisave account by the time you retire.

Insurance agents advice you to buy a private Shield plan. I hope that they have pointed out to you about the lifetime cost, so that you are well informed.

If you have to set aside $100,000 for your private Shield insurance, how much of that money is actually paid in claims? Based on the figures available from MAS website, the claim payout is 43%. This means that you are paying $100,000 in premium to get $43,000 in claims. Can you afford to give away the additional $57,000 of your savings to the insurance company?

After paying so much in premium, are you worried that your claim may be rejected due to "non-disclosure of pre-existing medical conditions", especially if you were not aware about these conditions? This has happened to many policyholders.

Think about the lifetime cost, if you wish to buy the insurance plan that covers all expenses "as charged". Make sure that you have sufficient money to pay the premium up to age 85 and beyond.

Note: If you take a private Shield plan without the rider, the total cost is $66,000. In this case, you have to pay the Deductible and Co-insurance.

7 comments:

nhyone said...: How can it exceed $100,000? The plans cost less than $500/year until 60 years old and less than $1000/year until 80 years old.; July 20, 2008 9:23 AM
EagleBoy said...: Actually it added up to about $104,983.05 (from one of the 5 insurer that offers such plan)
My assumption:
1. There is no premium adjustment over the years.
2. You purchase the rider alongside with the plan.
3. You choose plan 1.

I am not too optimistic about the premium adjustment though...it usually goes up only...; August 01, 2008 4:58 AM
Unknown said...: Mr Tan, for the purpose of comparison, what would be the cost of using a private Shield plan without riders?

I had bought Enhanced Incomeshield because I wanted to have the option of going to a private hospital, for example if there is a certain specialist that I would prefer there.

The lack of sub-limits within categories was another attractive aspect, because when I am ill, I doubt that I would want to be concerned with such limits.; August 10, 2008 11:10 PM
Raymond T said...: I believe riders MUST be paid in CASH... cannot use Medisave to pay for them =|; August 10, 2008 11:28 PM
Tan Kin Lian said...: The cost of a private Shield plan (for private hospital) from age 30 to 85 is $66,000 or about 66% of the total cost (including rider).

It is very expensive. Many people who buy private Shield plans to cover private hospital are spending too much money and will not have enought to last them for a lifetime.; August 11, 2008 6:28 AM
Raymond T said...: Hi Mr Tan.... that's an enormous chunk of money to pay for a private Shield plan.

Still (touch wood)... I cannot imagine myself in a B or C class ward. I would want a pte room, no matter what. Are there any other cheaper alternatives then? =); August 11, 2008 7:38 AM
Falcon said...: Mr. Tan,
What about the cost of Medishield alone. How much will one spent in his lifetime if insured with just Medishield as well as the corresponding claim experience? I wanted to show my wife the comparison since she has listened to her insurance friend and bought for herself and all my children these expensive Income shield with riders.; August 14, 2008 9:06 PM