Sunday, December 19, 2010

Insurance of co-payments

A consumer asked for my views about the rider that is offered by an insurance company to cover the co-payments under a Shield policy. The consumer gave me a lot of trivial details about the insurance rider - repeating what must have been told to him by the insurance agent. It is really a waste of my time to listen to the sale talk repeated by the consumer.

There is no need to buy the rider to insure the co-payments. This is explained in the FAQ here. The insurance agent will spin a long story to confuse the consumer and get the consumer to pay a few hundred dollars more in premium for the rider.

1 comment:

Vincent Sear said...

Many people think of health insurance in terms of full indemnity is best or necessary. Such thinking leads to being over-insured and overpaying premiums.

The savings for not taking up a second health policy (on top of Medishield) or even a rider plus Medisave should cover the deductible and co-insurance.

For conservative non-investing savers, I would even suggest using cash to pay Medishield premiums instead of deducted from Medisave. For if not investing for higher returns, cash is earning less than 1% at the bank while Medisave is earning 4% at CPF. Even when maxed and overflowed to Ordinary Account, it's still earning 2.5%.

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