Should I buy Rider for Integrated Shield Plan in Singapore?
N.B. This post on Rider for Integrated Shield Plan rider is based on my personal opinion. In any case, please do your own research or seek professional advice.
Previously, I shared my opinion on our nation’s health insurance policy, MediShield Life. All in all, it is undeniable that MediShield Life is a step in the right direction as our health insurance policy. However, I am deeply concerned on the various limits imposed. For that reason, it will not be my only health insurance policy.
With this in mind, private integrated shield plans attempt to bridge the gap between MediShield Life and what consumers want for their healthcare policy. Within private integrated shield plans, there are usually two components – termed “the basic plan”, and “the rider add-on”.
“The Basic Plan”
The basic plan covers medical bills for inpatient hospitalisation treatments and certain outpatient treatments. Depending on the plan selected, the higher tiered plans often cover the medical bills on an ‘as charged’ basis, subject to an annual deductible and co-insurance.
In most cases (for Singaporeans and Singapore Permanent Residents), they are allowed to use CPF MediSave to pay for the basic plan.
“The Rider Add-on”
The rider is an optional add-on to the basic plan and its main purpose is to cover the cost of the deductible and co-insurance. Of course, this is subject to the compulsory 5% co-payment introduced by the Ministry of Health, Singapore. At the same time, the rider is usually paid in cash.
With this in mind, the question is,
without 100% coverage, should I still buy rider for integrated shield plan?
No You should not buy the Rider
1. Company Insurance
Companies are often perceived to provide a decent amount of insurance coverage for their employees. As a result, individuals feel that a private integrated shield plan is unnecessary as the coverage is duplicated by their employees’ benefit.
Well, this is probably true for the first $100k of medical bills or so (depending on the generosity of the company). Additionally, there are associated limitations on the reimbursement for the pre- and post- treatments. At this point, it feels alright, so long as nothing major happens. Then comes two important questions:
What if I decide to work for another employer? Will my current company’s insurance be portable?
And what if my company decides to change the insurer and I need to declare my health? Will I still be fully insurable?
2. Opportunity Cost
According to the fee benchmark by Ministry of Health, Singapore, 75% of the patients are charged below a total bill of $88,942 for a heart bypass (conventional surgery). If I have the basic plan only, I will need to pay the deductible and co-insurance.
If we assume that the cost of the rider is $500 annually for my age band, then the key question is,
Am I able to save and grow $500 every year fast enough before an illness strike?
Yes You should buy the Rider
3. Insurability Interest
For me, nothing is more precious than being insurable. There is a quote by Luis A. Ortiz Haddock that describes this best –
Life Insurance is like a parachute; if you don’t have it the first time you need it, there is no second chance.
It feels the same for health insurance too.
Moreover, it is not the first time we hear or know relatives or friends who have exclusions in their insurance policies or are not insurable at all. With this in mind, is it worth retaining the risk or to transfer it to the insurance company for a small premium every year?
4. Peace of Mind
(Let me be biased.) I have done so many claims for my clients in my entire career that the most satisfying answer to my concerned clients (on whether “this” medical bill will be covered by their insurance) is
Don’t worry, it (the medical bill) will be taken care of.
On balance, I feel that nothing is more comforting to know that my health is more important than my wealth.
Conclusion on Rider for Integrated Shield Plan
With all things considered, I feel that the cost of the rider for integrated shield plan is cheaper than the value of my health (and probably impacting my wealth as well). Ultimately, I don’t have a crystal ball to know when I will fall sick. I can only hope that I have it when I need it – I just need to be responsible for my family, and not the other way round. 🙃
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