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Do you know if your parents have (enough) H&S coverage?

Friday, June 26, 2015

There are certain topics that many people avoid talking about at home. 

Money is one such topic.

Sometimes, due to this reticence, we discover too late that someone in the family might be heading for a financial disaster or that someone in the family might not have certain necessary insurance protection.

In such instances, other family members might have to help out financially if they are able to. 

What if they do not have the ability to do so? 

That is one scary thought, isn't it?

This is taken from a recent conversation with a reader:

Hello AK,

It's me again, the one who got in touch with you via Facebook recently :D

I am currently reviewing my insurance plans, fueled by my recent visit to the CPF board for my dad's CPF Life inquiries. 

One thing lead to another and I realized that he only has Eldershield on and no H&S plans at all. Thus I'm inclined to grab one for him.

The plan (hah!) I have for my dad is to have to maximize his $800 cap to pay for his private insurance, with any additional necessary cash top-ups to be done on my end, which can be part of my tax-relief(ed) contributions towards his Medisave.

As much as I want the best for him, question is, given his age and thus the increasing premiums, should I go for the highest possible plan or exercise prudence by going with what I can afford? 

If it's the latter, what's the bare minimum then for me to effectively not worry to a large extent should he be hospitalized?

Hear from you soon, AK :)


What? No H&S plan? Alamak!

Firstly, I must apologise to F because I forgot to mention to him that contributing to his father's CPF-MA does not give him any income tax relief. 

I believe that a voluntary contribution to the CPF-MA gives income tax relief to the recipient only. 

He might want to check with the CPF Board on this to be sure.

My reply to F:

Hi F,

H&S is very important and a must have for everyone. Very lucky that you discovered your dad has no H&S coverage. 

He should definitely get coverage ASAP!

A long, long time ago when I first compared H&S plans, I decided to go with Incomeshield from NTUC and I have stuck with them since, upgrading my plan over the years. 

I got my mom in on this as well and, like you observed, upgraded her plan not too long ago too.

It is true that the yearly premium will get more expensive as we age and for my mom who is almost 70 years old, it is more than $2,000 a year. 

She finds it expensive but I told her it isn't and I will pay for her. I want her to be comfortable if she should be hospitalised and I want to be worry free when it comes to my share of the cost. 

10% of the bill with an annual cap of $3,000? That's OK. :)

Which H&S plan should you get for your dad? You have to compare the different options available and decide for yourself, of course. 

Remember, insurance is there to help us deal with bad things that might happen to us. 

It is to help us to cope with costs which we might not be able to deal with ourselves. 

As we bear this in mind, we also want to keep the cost of insurance low.

Of course, if we can afford to pay for better healthcare for our parents, why not? 

I think they deserve it. 

To make better healthcare more affordable for us, we need a good H&S policy. :) 

The yearly premium is predictable and is something we can budget for. 

The cost of hospitalisation is not predictable. ;)

Best wishes,

I have talked to myself about the importance of having a good H&S plan from time to time here in my blog, of course. 

This is not something new.

However, the conversation with F nudged me to once again remind readers, especially those new to my blog, to have a conversation with family members, especially our elders, to ensure that they have H&S coverage and if they do have coverage, we want to check if the coverage is adequate when considering the types of hospital and ward preferred.

We shouldn't drag our feet when it comes to something like this. 

The weekend is upon us. 

Go talk.

Related posts:
1. Enhanced Incomeshield for my mom.
2. Eldershield: Is it really necessary?
3. Eldershield: What does it shield us from?
4. Save money and have better H&S for parents?
5. Voluntary contributions to CPF.
"My dad is still working and paying income tax. So, with regular voluntary contributions to his Medisave Account from me, he will pay less income tax too. Yes, it is tax-deductible for the recipient only."


AK71 said...

ALL five life insurers offering Integrated Shield Plans (IPs) have committed to not increase the premiums for the additional private insurance coverage portion for 12 months.

This initiative reflects the life insurance industry's efforts to facilitate a smooth transition for IP policyholders during this period as the Ministry of Health (MOH) moves towards providing Singaporeans with healthcare coverage for life, said the Life Insurance Association Singapore on Friday.

The increase in coverage from MediShield Life is expected to reduce claims payout from the top-up portion of IPs.


AK71 said...

In end 2015, MediShield will be replaced by MediShield Life, and will offer:

- Better protection and higher payouts, so that patients pay less Medisave/cash for large hospital bills

- Protection For All Singapore Citizens and Permanent Residents, including the very old and those who have pre-existing illnesses

- Protection For Life

With better coverage, MediShield Life premiums will have to increase. You can use your Medisave to pay your premiums in full.


Anonymous said...

Hi Ak

I wrote about different types of wards and average bills sizes sometime back. If any of your readers need more information.

pf said...

It wld be good if the parents are still healthy and can take up h&s. If the parents r old and hv some health signals already, such as higher blood pressure but maybe not high yet, per se, insurance companies may load the premiums or have exclusions to the coverage. All in all, they may make it not so worth it to get insurance. Hence, my hdb flat strategy. Anyway, insurance premium also pay premium, buy flat for option to rent out also paying a premium. ...both r financial tools....1 is a potentially appreciating financial asset with ability to generate cash is a financial risk mgt tool that is an expense. Of course, both hv diff criteria for entry and one is with leverage. May not suit everyone.

Siew Mun said...

I never regretted getting the best IPs for my mother about $6500 cash and $1200 CPF MA. My friends around me has to pay 80-100Ks for their parents medical in their last days. We strive to give the best to our parents just like our parents gave the best to us.

AK71 said...

Hi pf,

Your strategy could work for singles who have the ability to buy bigger flats as it is financially more demanding. However, we want to bear in mind that there is also less certainty in your strategy as it would depend on the health of the home rental market which could go through difficult periods.

Insurance is about injecting some certainty into the uncertainty in our lives to provide peace of mind. It is an expense that we should not avoid. :)

AK71 said...

From my FB wall:

Yap Tong Xiang:
"Most of our parents don't believed in insurance so didn't buy any h&s coverage when young. As the only child, I know I have to bear the expenses eventually happy or not when the "time" comes.

"Although they are excluded for high blood and diabetic related illnesses but I still cover them with private shield (A class) I can't cover 100%, can cover 70% also good. Better than nothing, who knows what may happen. Anyway I welcome medishield life that cover existing illnesses for them.

"Prepare for the worst is the best defense. Same for investing, take care of downside, upside will take care of itself."


AK71 said...

Hi Siew Mun,

I cannot agree with you more. If we have the ability to give the best to our parents, we should.

In their old age, there is very little that our parents might need and having good healthcare is one of those needs. Unfortunately, healthcare costs will only become higher over time and to make it affordable, having a H&S plan is the only reliable solution. :)

pf said...

Of course, AK71. I'm not avoiding it. My parents were rejected for h&s. This option is out.

AK71 said...

Hi pf,

Oh, I am not suggesting that you were avoiding H&S. Heavens forbid. It was a statement in general.

I think you told me your parents had pre-existing illnesses and, hence, your strategy to look after them through renting out your then future flat.

Well, not to worry. Medishield Life to the rescue! Your parents will enjoy H&S coverage soon. :)

AK71 said...

Hi AK,

I am avid reader of your blog. Every now and then, I will go to your blog and read your articles which cover many interesting topics.

My purpose in writing to you is to seek your advice regarding enhanced medical health plan on top of basic medishield.

My parents are in their 60s, premium they have to pay yearly cannot offset by medisave so I need to top up by cash. I am thinking of downgrading to lower plan.

Do you have advice for me regarding implication of doing so?

Greatly appreciate.


Hi Y,

If your parents are OK with class B2 or C wards in government hospitals, all you need is Medishield Life. ;)

Best wishes,

Kevin said...

Hi Hi AK and Y,

I feel class B1 in government hospitals should be the minimum requirement. Class B2 and C wards in government hospitals do not have aircon and it might feel even more uncomfortable when one is ill. ;)

Kevin said...

Hi AK and Y,

I feel class B1 in government hospitals should be the minimum requirement. Class B2 and C wards in government hospitals do not have aircon and it might feel even more uncomfortable when one is ill. ;)

AK71 said...

Hi Kevin,

Yes, class B2 and C wards are not very comfortable. If we can afford to, it is better to stay in class B1. This is where private H&S comes in. :)

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