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How much for hospital and surgical insurance?

Saturday, October 19, 2013

The renewal certificate for my hospital and surgical insurance just arrived. So, what is the cost?

Total: $904.00.

$665.00 will be deducted from my CPF Medisave Account and $239.00 will be deducted from my designated savings account.

The importance of having good hospital and surgical insurance cannot be over-emphasized. We are not being frugal if we save money by not having such insurance. There is another word that starts with the letter "F" to describe those who do.

The insurance premium will increase as we age. My mother's yearly H&S premium is in excess of $2,000 now. Yes, we pay more as we age but don't let this scare you. What should scare you is the size of hospital bills which will surely come one day (although we could continue to hope that they don't).

My mom told me that my uncle who is almost 60 was thinking of cancelling his H&S insurance due to financial difficulties. I told her to dissuade him from doing so. We could help with the premium. It is only a few hundred dollars a year in his case as he opted for the least expensive plan available. If he should be hospitalised, we could help pay the deductible and co-insurance but without the H&S insurance, it would be a much heftier burden.

I remember when an uncle was hospitalised for cancer a few years ago, my dad had to help to pay his bills. It amounted to a rather hefty 5 figure sum. My dad's bank account took a long time to recover but my uncle never did.

Suggested checklist:

If you don't yet have H&S insurance, go get it.

If you have basic H&S insurance but can afford a better one, consider upgrading.

If people you care about don't have H&S insurance, make them get it.

H&S insurance might just be the best investment we could ever make in life. How so? I am sure you have the answer to this one.

Related post:
Enhanced Incomeshield (H&S) for my mom.
"...I only have to pay 10% of my total medical bills if I were to be hospitalised and this 10% has an annual cap of $3,000 in my case. So, if my hospitalisation and related bills were to total more than $30,000 in any year, I would still pay a maximum of only $3,000."


SGYI said...

Hi AK,

I fully agree with you. Hospitalisation insurance is indeed important. I've covered my whole family with it.

By the way, your assist rider is quite cheap at NTUC. May i ask if your plan covers for government or private hospital?

Zi Rong said...

Yeah, H&S insurance is definitely a must for everyone. Did you get coverage for private hospitals? I heard that waiting times at govt hospitals can be as long as 2 months. :O

I'm just wondering what other insurance policies you have (life, term, CI, etc). Care to share? :D

AK71 said...

Hi SG Young Investment,

The plan I got for my mom and myself is NTUC Incomeshield Preferred. It covers stays in private hospitals too. :)

AK71 said...

Hi Zi Rong,

Yup, it covers stays in private hospitals too. If we can afford it, why not keep all options open? :)

I have 2 whole life policies and 2 regular premium endowment policies. I have various single premium endowment policies too.

I have 3 CI policies (each with a coverage of $100K) and I recently bought a $400K term life policy.

Looking back, I would not have bought the 2 whole life policies and the 2 regular premium endowment policies, for reasons obvious to me now.

Unfortunately, I was not financially savvy during my NS and undergraduate days. :(

Unknown said...

Hi ak, i did not go for the private hospitalisation plan as i think the premiums are too high. Reading your blog i begin to think otherwise. Thanks

AK71 said...

Hi Unknown,

You are welcome. :)

A bit of reflection for the weekend is a good way to spend our time. ;)

Zi Rong said...

Wow, 2 whole life and 2 regular premium endowments, your annual premiums are probably very hefty.

I'm currently deciding whether to get a limited-pay whole-life policy, or term insurance.

The factors drawing me towards limited-pay whole-life are the limited payment term of 20 years, and the cash value of the policy. But of course, the drawback is the cost, where the annual premiums are about 8x more expensive.

What are the reasons for not buying the whole life policies?
For term insurance, what's the suitable age to cover until?

AK71 said...

Hi Zi Rong,

OK, first, I must say I am not qualified to give any advice. What I am doing is just to share with your my thoughts. ;)

My regular premium policies cost me about $9K to $10K a year. This is off the top of my head. I don't know if that is a lot for my age.

I wouldn't buy whole life policies because they are so expensive, My $250K whole life policy costs me $2.7K a year, I think. Term would be much cheaper.

Endowment policies are really term savings plans, I feel. The good ones will return 4% per annum with a bit of insurance element thrown in. 4% is probably the upper limit. Not guaranteed. Good?

I would buy term life insurance and invest the rest. An STI ETF would outperform in the long run. Click on Matthew Seah, a guest blogger, in the left sidebar and read about the services by POSB and OCBC. :)

I feel that we are insuring our life for our dependents. If we should die leaving dependents behind, we should leave them some money. So, to what age do you foresee having dependents? Then, to that same age your term life policy should stretch. Makes sense? :)

Solace said...

Hi AK,

With recent changes and enhancements made to Medishield, Several insurance companies to their Shields plans pricing.

My cash components for Great Eastern Total Shield is $418,just a year before it was $272.8 ! I belong to age group of 21 - 30.

I have decided to switch to NTUC Income Shield, which offers me more value for money in the long run. I am switching now because i still do not have any pre-existing illness nor have make any claims yet of my current health insurance plans.

AK71 said...

Hi Solace,

I have had NTUC Incomeshield since forever. I rationalised that it is a co-op and that its pricing offers the most value for money. I also rationalised that NTUC Income will never go bust. ;p

I am happy about the upcoming changes to enhance Medishield because people like my dad who only have basic Medishield will benefit.

I tried to get my dad to upgrade to Incomeshield years and years ago but he dragged his feet. Then, one illness after another meant that he was stuck with Medishield. Thank goodness he did not opt out. -.-"

WTK said...

Hi all

It will be worthwhile to buy term insurance instead of wholelife insurance. As AK has mentioned that "buy term and invest the rest", however a lot of the people are not aware of this when they enter the workforce. Most of them end up buying the wholelife/ILP endownment insurance instead of the preferred term insurance.


SnOOpy168 said...

Most people will be confused into thinking that having high cover = good. Coverage for what is the key point. Death ? Disability ? H & S.

I don't have dependent nor a huge debt (housing etc etc), having death benefit means I will have a very rah rah style funeral lah. BUT it will pay only if it is caused by accident. Not due to illness or natural (i.e. old age).

It is disability & H&S/medical that i am more concerned. These are the pricy options because insurance companies knows that there are more chances of a claim.

I had bought from Income & Direct Asia, mostly that their info are available to me 24x7 and their hotlines are very responsive. Premiums wise, I am happy too. Not that I had rejoined SAFRA after almost 15 years absence, they have some special deals which my GE agent said it is a good deal that I should look into.

AK71 said...

Hi SnOOpy168,

You are right and there is definitely such a thing as being overinsured. I suspect I could be one such case. -.-"

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