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
I still do not follow you on this
ReplyDeleteThe medical costs in Singapore are far higher than what is covered by an employer or by the Basic Medical Shield
Now, there are far too many holes in most insurance contracts in Singapore: so buying an insurance contract in Singapore may not be a good solution without eyes good enough to read the fine print
But this is not a reason for advising people to live with basic employer/shield insurance: a catastrophic event would suck all your savings and put you in debt
Hi, Mr Tan.
ReplyDeleteI looked at your table for Group Term + CI insurance till age 45. The price for $100k is $273/yr. You claim that the price of Term + CI insurance increases exponentially at age 65 and that is true for SAF Group Term. In comparison, my own personal Term + CI insurance (from age 25 to 65) cost $300-400/yr per $100k (depending on which company). With the lowest quoted price, isn't it worth the extra $30/yr to get extended coverage till retirement?
Reply to 7:41 pm
ReplyDeleteThe best way to pay for medical bills is to have basic Medishield and to go for subsidised wards in Government hospitals.
There is no point in paying a lot of money for insurance that has "many holes".
There is no need to pay big bills for private dcotors who charge a lot of money. Nobody can afford these types of bills. This is why the insurance company has to write the "holes" in the contract.
Dear Garett
ReplyDeleteThe SAF group insurance is a benchmark. If you can get a better rate elsewhere, you should accept it.
If you are selling insurance at more attractive rates that SAF group insurance, you are doing a great job for your clients.
Give me the details, and I will be happy to include them in my new benchmark.
Sorry i dont really agreed with what you are sharing.I believe i can agreed to disagreed :)
ReplyDeleteProbably u do not had someone close who are struck by a chronic illness like cancer.If patient are going subsidised ward, nobody can afford to wait 2 months for the operation as there's a long waiting lists.In order for the cancer cells not to be spread, a patent will want a better alternative and that's where Specialist treatment in government and private care step in...
It all depends on wat type of quality medical care you want as a patient..It's not so much about paying for expensive medical plan bur rather what to pay for a better alternative in patients who are having chronic illness..
Thanks