High cost of medical care

Some insurance agents will tell you stories about people they know, who have to incur high cost of medical care for critical illness. They did not tell you about the frequency of these expensive cases, and they tend to exaggerate the amount that is involved. I know of many people who are treated for early stage cancer and have recovered, and they do not have to spend too much on medical bills.

If you look at the number of these high bill cases, you will find that they are much less frequent than deaths through traffic and other accidents.

It is more important to have adequate life insurance, for 5 to 10 years of earnings, that can be purchased through affordable term insurance. You can insure under the group insurance offered to SAF, SAFRA, public officers and trade union members. The cost of insurance is low, as shown in this benchmark.

For insurance against cost of medical care, you are already covered by your employer. You only need to take up Basic Medishield (as you may need it if you are no longer working).

If you wish to buy critical illness cover, you can opt for the SAF critical illness cover for $100,000 at a premium of only $10 a month (available through SAF). This insurance is valid up to age 45. You can discontinue it after 45 (to avoid paying 4 times of the premium). By that time, you should have sufficient savings.

If you are not able to get this cover, it is all right to go without it, as the bill is covered by your employer or the Basic Medishield.

Do not waste your money on expensive medical insurance or private Shield plan or critical illness cover, especially the plan that is recommended by most insurance agents. The money can be invested to earn an accumulated sum for your retirement or other future needs.

For your savings, it is best to invest in a low cost investment fund. This is explained in Practical Guide on Financial Planning.  Youc an also attend the monthly talk by FISCA on financial planning.

Tan Kin Lian