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How to get free medical insurance in Singapore?

Saturday, December 14, 2013

It is a good idea to do voluntary contributions (VC) to our CPF-MA. 

Enjoy income tax relief (for the recipient of the VC) and also earn 4% interest per annum.

  • Reader: I assume excess from MA will flow to SA first. Once SA hits FRS, it flows to OA?

  • Assi AKCorrect. Maxing out the MA is a good idea!

We will all grow old and fall sick. It is only natural.

Not to be saddled with huge medical bills which we find impossible to pay, I am sure all of us will agree that having a good hospitalisation and surgical (H&S) insurance policy is important.

Of course, a good H&S insurance policy is not going to be cheap but would you believe me if I were to tell you that we could possibly get one for free?

Free? Am I nuts? Well, maybe, but this is how I look at it:

Build up our CPF Medisave Account (CPF-MA), stay healthy and not use the money in our CPF-MA for as long as possible. 

Yes, that is all there is to it. Why?

The CPF-MA attracts a 4% annual interest and if our CPF-MA has enough funds, the interest it pays would be enough to cover the insurance premium annually.

Of course, some might say that the premium to be paid will increase as we age and there could come a time when the interest earned is not enough to pay the premium. This is a valid point and almost bound to happen.

This is why, although some lament that the CPF-MA's ceiling has been raised once again, I am quite happy that it has been raised. This means that I will have more funds in the CPF-MA earning higher interest to offset my H&S plan's insurance premium in future. It is a good thing, in my opinion.

My CPF-MA shows:

Interest earned: $1,654.48

Eldershield: $173.21

DPS: $61.83

Incomeshield: $ 665.00

Total drawn from CPF-MA: $ 900.04

I think I will probably be getting "free" medical insurance for many more years to come.

Top up your CPF-MA or your loved ones' CPF-MA, if you can afford to do so.

The interest earned will go towards getting that "free" medical insurance that so many people I know want to have in Singapore. 

We will get it with some effort and a bit of help from the government.


Maximum sum for the CPF-MA, which will be raised annually to keep pace with the higher draw on Medisave by the elderly, will go up from $48,500 today to $49,800 next January. (ST, 2015.)

See latest update:

"For those under 65, the Basic Healthcare Sum next year will be S$54,500, up from S$52,000 previously, the authorities said."
CNA, 16 November 2017

Related posts:
1. Eldershield.
2. Enhanced Incomeshield for my mom.
3. How much for H&S insurance?


Singapore Man of Leisure said...


We need more posts like these ;)

It's all about primary school math.

Provided if we don't let our emotions towards politics get in the way.

Some will say they don't earn as much so their CPF-MA tiny... But if they are also complaining their surplus cash is rotting in the bank... There's such a thing called voluntary contribution...

It's primary school math.

The Sun said...

The challenge will come when one reaches old age (especially if you are 70 years and above) and if one is on a higher class private shield plan (e.g. Enhanced Incomeshield Preferred or Enhanced Incomeshield Advantage plan). Also, if one lives past 90, the premiums becomes much higher. At present, even just a basic plan B Incomeshield plan (this plan has been withdrawn by NTUC Income already) at this age sets one back by more than $2,000 per annum. For those under the Enhanced Incomeshield Advantage Plan, the premiums will become higher than $2,000 when one reaches 74 years of age. Not forgetting too, premiums will likely rise in the near future pending the implementation of Medishield Life and that if one purchases a rider for a private shield plan such as Incomeshield, he has to pay this out-of-pocket.

AK71 said...


I don't know if I am reaching out to as many as I would like to with my blogs but this issue on H&S and CPF-MA is one I feel very strongly about.

Anyone who has seen how expensive hospitalisation bills are for our elders should be shocked into useful action. Complaining about how expensive the bills are is an action but it is hardly useful. ;p

I am blogging a lot less these days although when I do blog, I still enjoy it, and comments like yours keep me going. Thank you. :)

AK71 said...

Hi Sun,

We can only plan to the best of our abilities and consider what is within our control. Any other bridges, I will have to cross if I come to them. :)

I feel that if we can get "free" medical insurance now, the money saved (surpluses included) will go towards paying for the same plan if it can no longer be "free" for reasons you have highlighted.

Also, there is always an option to downgrade our H&S plans in our old age if we would like to continue getting "free" medical insurance. ;)

Like in everything, we are lucky if we have choices. What we choose to do is up to us and we should choose carefully.

ron said...

Falling sick is unavoidable. If we are lucky, the damage & repair can be within our means.

Planning for retirement is easy to say.
The mechanics of how it is done is not so easy, or obvious. Many make the mistake of planning to save & save.

Retirement planning means planing to have a cash flow to replace previous salary. This cash flow is separate from savings.
While the savings should remain unused, or the capital not eroded, it should generate cash flows large enough for our needs

This includes medical needs, travel, vacation, meals, gifts ( ang pows... no excuse even retired!)

Dependent's Protection Scheme ( DPS ) is a term insurance and will cover up to 60 years old.

My view is that if we have large enough
cash, insurance is not required. I doubt Warren Buffet has insurance, except for mandatory ones compelled by Government or company rules.

Consider then the Advance Medical Directive (AMD ) if you encounter serious terminal illness. The insurer will pay out a fixed amount, usually upon diagnosis and maximum expenses incurred for treatment.There are many hurdles to overcome to claim. It all sounds rosy in the policy.

One question I ask of insurers is:

What would I need to produce to file a claim? What does the insurer need from me in order that my claim is smooth sailing?

The answers are usually vague and they will assure you that the agent will look after you when the need arises... why bother with such "sway" things now?
Just buy the policy!!!

I have a couple of policies that I regret buying. I was in my 30s.. and I was not aware of the cost over time. I am still paying the premiums.. to surrender now would incur higher loses.

Insurance is all about management of risks and betting that you wont fall ill or die. Not so easy to die.
Cancers, heart attacks, kidney problems?.. well, eat in moderation everything, drink lots of water and exercise 3 x a week ( 60 mins each time)

If you still get sick... and its terminal... consider the AMD... give your money to those who have better use for it... the doctors are well compensated already.

Merry Xmas to all

AK71 said...

Hi Veronika,

Thank you for the very comprehensive comment. You should have sent that to me as a guest blog. :)

Indeed, depending on individual circumstances, we might or might not need insurance and if we need insurance, we might not need as much or we might not need some type(s) of insurance.

Personally, I do not have any disability insurance because I feel that the cashflow from my investments should be sufficient to take care of my daily needs in case I should become disabled.

Your comment has provided me with more food for thought. :)

I like the way you ended what might seem to be a morbid comment. ;p

So, Merry Christmas!

la papillion said...

Hi AK,

Hmm, I never see it this way - using interest from MA to pay for premiums ;) Haha, suddenly I feel happier!

Being self employed, I must contribute to medisave yearly, otherwise I'll get into trouble. Sometimes if the year is good, i'll pump in more so that the following year I don't have to scramble around for cash to top up. Try paying your yearly medisave in 1 shot!

To those who think that paying higher premiums for H&S when one is older is super expensive, well, try doing it without. You just need one trip to the hospital and you can probably recover several years of premium. I consider it as paying your hospital bills in advance over several years, way before you need it. said...

Hi AK,

Sorry for this silly question ... Wondering if you are "protected" by the basic MediShield or the Integrated Shield Plans? :P

Reached 30 yrs old now, must plan for me and family if any unforeseen circumstances happened :(

AK71 said...

Hi LP,

Yes, being self-employed, you have to be a bit more pro-active since contribution is not an automatic process. :)

The idea I have presented here is very easy to understand. Like SMOL said, it is primary school math and that is more or less the extent of my proficiency in math. ;p

It is about using cashflow generated by the funds in our CPF-MA to pay for a much needed insurance plan, keeping the principal intact, if possible. Even if the cashflow generated could only pay for half of the premium, well, a 50% free coverage is better than none at all. :)

I always say that money is hard to make and we should make our money work harder. The little idea in this blog is consistent with this mantra.

AK71 said...

Hi boonchin,

I am covered by Enhanced Incomeshield Preferred and I also bought a rider. So, in the event of hospitalisation, I will only have to pay 10% of the total bill, capped at a maximum of $3,000 a year.

You want to read #2 and #3 of the related posts listed at the end of this blog post. :)

Solace said...

Hi AK,

This is a very good post which i enjoy very much. Nothing complicated, you present the essence of the topic as it is.

i also enjoy the comments by fellow readers. All of these have given me much food for thought :)

You must continue to blog for many years ok, hahaha

AK71 said...

Hi Solace,

It is like what SMOL said. This is primary school math although I must say that primary school math is tougher these days compared to when I was in primary school. ;p

ASSI is fortunate to attract very high quality comments from readers regularly. Their comments have definitely added depth and breadth. Without these comments, ASSI would surely be a shade paler. :)

I doubt I will stop blogging although I will probably blog less frequently. So, need more guest bloggers. Hint, hint. ;p

I will be taking a year end vacation from Monday through Christmas. So, no blogging during this period. :)

tapiocaflash said...

Hi AK,

Thanks for sharing your thoughts. I didn't know about elderlyshield until I saw this post. Upon some googling I found this link which argues why it may make better sense to opt out from the Eldershield? The main arguments are the payout are too little and it is difficult to claim under the 3 out of 6 disability definition. Would like to hear your thoughts on this:

AK71 said...

Hi tapiocaflash,

I agree. It seems really insignificant. Then, why did I do it?

A veteran blogger said this:
LP's comment on Eldershield

Small money to us but could mean a big difference to others. Merry Christmas! :)

Poh Soon said...

While it is true that the Interest generated from CPF-MA could be sufficient to cover for the cost of medical insurance, we still need to be prepared to be able to part paying using cash as there is a limit on how much you could use your CPF-MA to pay for it.

Anonymous said...

Hey AK,

just a friendly shout that I finally complete my analysis of APTT...

Doesn't look too good if you ask me

Kelvin Tan said...

With the new Medishield Life coming in soon, where all of us will be forced to participate, what do you think of the future of all these AIA, Incomeshield etc?

I am currently on an AIA plan that is paid using medisave and am thinking of stopping it, in anticipation of this Medishield life. Part of the reason is because my job does provide some hospitalisation plan.

My reason for taking up this AIA plan is so that, if I quit my job, I can still be covered but with the incoming medishield life, seems it is less critical now.

What do you think of my reasoning?

AK71 said...

Hi Poh Soon,

Indeed so. However, I believe the interest earned in our CPF-MA account will make the insurance premium less onerous. :)

AK71 said...

Hi Mike,

Hey, thanks for sharing the link here. Appreciate it. :)

There are some points I am concerned about, for sure. I have not added to my legacy long position but I might do so if its unit price should decline much more from here. ;p

AK71 said...

Hi Kelvin,

I think that we need a good H&S plan and we should not depend on medical coverage provided by our employer. We don't have control over whether our employer might terminate that coverage or if we might get retrenched. :(

As for the much anticipated new Medishield, I believe all the private H&S plans will upgrade to make sure they either keep up or are better. It stands to reason. I know Incomeshield has done so.

This is a very personal matter and I also do not know anything about the H&S plan by AIA to make an informed comment. :)

opal said...

How about buying some healthcare related shares that are liquid and stable? Say raffles med and ihh? Sell then when you need to pay for medical bills? Medical cost and their profit (& share performance) may be positively correlated? Just struck my mind out of nowhere. Haha. :p

opal said...

Having said that, it is crucial to have medical insurance. Never know how these companies turn up many years down the road, and you wouldn't want to take such unnecessary risks!

AK71 said...

Hi opal,

Two different topics, really. Don't mix the two.

Motivations for being invested and for being insured are quite different.

ILPs, anybody? Yikes! ;p

AK71 said...

The CPF-MA ceiling will be raised from $48,500 today to $49,800 next January. This will be called the Basic Healthcare Sum.

AK71 said...

Hey Ak, thanks alot man. My 1st question to u ... after following yr blog for last 5 yrs. But i didnt focus on CPF until i turn 30
i like the "free insurance" article from MA when u speak to yrself

Assi AK:
I like free H&S insurance a lot too. hehe... I like to make government work hard for me. I lazy.
I never did have a chance to use my MA (to pay for hospital bills) in 20 years. haha

choy choy choy .. i hope u dont need to
i was jus thinking whether it makes sense for me to do it

Assi AK:
Hospitalised before but fully paid by H&S (insurance). ;p

AK71 said...

Hi AK, can I ask you if there are any reasons to top up medisave first instead of Special account?

If you want to have free H&S insurance.
SA is very long term. It is for retirement. Cannot use for anything else.

AK71 said...

cos i did some calculations and I think I can hit the FRS by 33-35 but the medisave will be like half of the bhs haha
like my life is not complete when the MA is not full haha

a full MA gives peace of mind 😉

Collin said...


What would be the factors to consider to decide whether to top up MA or SA accounts? Thanks.

AK71 said...

Hi Collin,

The SA is meant to help fund our retirement.

The MA is meant to help fund medical related expenses which includes cost of H&S insurance, for example.

Whichever account you choose to top up, it is a irreversible process.

So, ask yourself what are you trying to achieve and you will have the answer.

AK71 said...

Reader says...
Just want to gam xia you help me calculate the amount of estimated VC to MA, you told me to VC 4k. Today I got the annual MC I had and the difference between MC and annual limit is 4625 so I could still top up 625 VC to my MA before Dec to enjoy the tax relief !!!

AK says...
Gong xi gong xi!

Reader says...
enjoyed the 4k for 4% liao, song song gao jookoon. How time flies? man
When i asked you, it was feb and now already dec

AK says...
Time flies. 😛
Money grows! LOL 😀

AK71 said...

Reader says...
I read your blog after a colleague told me.
First thing I did was topped out my cpf medisave.
If only I followed when you started blogging.

AK says...
Welcome to my blog. :)
It might make you feel better to know I started my blog in 2009 but I did not blog about "free" H&S insurance until 2013. At least you didn't waste 4 years following me... ;p

foolish chameleon said...

i noticed that one cannot transfer OA to MA?
there is only option to top up in cash? or trasnfer OA to SA..
or, am i wrong..

AK71 said...

Hi fc,

Can do voluntary contribution using cash to the MA but not OA to MA.

OA to SA transfer is allowed if the SA has yet to hit the FRS. :)

AK71 said...

Reader says...
The MA idea of govt funding our health insurance is really a super idea.
Big thanks to you.

Unknown said...

The Govt has restriction on withdrawal to pay for the annual private hospitalisation medical insurance premium so having a lot of money in the Medisave account don't help entirely because you will still have to fork out cash, correct?

AK71 said...

Hi Unknown,

The only component of my H&S insurance that I have to pay cash for is the rider as this is in addition to the insurance premium.

However, in our old age, it is possible that we have to fork out some cash due to the limit you mentioned but some help is better than no help. ;)

Free medical insurance in our old age?

Sandra said...

It's end of 2023 now, ASSI readers are still contributing high quality and food-for-thought comments which I always: enjoy reading. Well done all ! And happy holidays to all :)

AK71 said...

Hi Sandra,

Merry X'mas and Happy 2024! :D

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