I obtained a shock upon receiving my invoice for my Built-in Protect plan (IP) final yr. Regardless that I’m nonetheless in my 30s, it got here as much as virtually S$2,000.
My IP premiums had been rising sooner than I had anticipated. I couldn’t think about what it’ll be like if I’ve to proceed paying at this growing fee for the following few a long time simply to keep up my protection.
Upon consulting my insurance coverage agent, she suggested me to retain my plan because it was because it gave the “highest protection” and got here with a “20% no-claims low cost”.
In truth, if it wasn’t for the 20% low cost, my invoice would have been over S$2,300. In order that obtained me considering — am I maintaining this plan only for the financial savings, slightly than checking if the protection actually fits my wants and finances?
As somebody within the sandwiched era, my husband and I typically really feel the burden of elevating two younger youngsters and supporting our aged dad and mom. Our finances needs to be break up for your entire family — with our youngsters and fogeys too – and this isn’t simple once we’re those paying for everybody’s a number of insurance policy. Whereas we had beforehand purchased non-public protection for the entire household for an added peace of thoughts, we additionally wanted to be sensible: what’s deemed a necessity vs a need, particularly with healthcare prices rising?
How a lot safety is an excessive amount of?
We begin by what we have already got as Singaporeans/PRs:
- MediShield Life: designed to cowl 9 in 10 subsidised payments, with deductibles and co-insurance payable by MediSave
- CareShield Life/ElderShield: present long-term care payouts if we develop extreme incapacity.
If we wish extra protection:
- Built-in Protect Plans (IP) – covers even bigger hospital payments, particularly if we go for remedy at non-public hospitals
- Rider – reduces potential out-of-pocket bills reminiscent of deductibles and co-insurance
I discovered myself weighing the choices. On one hand, public hospitals with Class B2 or C wards already include authorities subsidies, and the payments could be lined by MediShield Life, with premiums payable by MediSave — so perhaps paying further for an IP isn’t important.
Moreover, premiums for personal protection may climb dramatically as we age. On condition that our non-public medical insurance coverage premiums may very well be as much as 5 instances of our MediShield Life premiums once we hit our 70s or 80s, may we realistically sustain with the prices then, particularly if we’re not working?
I additionally fear about passing these bills on to our youngsters — the very last thing we wish is to burden them with our excessive insurance coverage or medical payments.
Again in our early 20s when my husband and I signed up (individually) for optimum protection, we didn’t suppose that far forward about how premiums would rise as we obtained older. We each assumed the prices would keep roughly the identical, and I didn’t realise how my future duties — from elevating youngsters to supporting aged dad and mom — would add on to my complete finances.
Once I spoke with my buddies, I realised that I used to be not the one one; most of us have a tendency to purchase non-public hospital IPs and riders once we’re younger. It’s only pure that we wish to get the very best protection doable for ourselves whereas we’re nonetheless younger and wholesome, to be ready simply in case one thing surprising occurs. And in our 20s, the money outlay isn’t excessive so it’s no marvel we hardly really feel the pressure on our finances.
However as we obtained older, we watched our premiums rise and the out-of-pocket money portion get greater. That’s how we went from not feeling it in our 20s, to struggling to pay extra now. That is particularly once we’re simply 2 individuals paying for the mixed prices of protection for 7 folks in our family i.e. for two adults, 3 aged and a couple of younger youngsters.
That was once we realised, simply because we signed up for the very best plan doesn’t imply now we have to keep it up endlessly.
Seeing our premiums rise sharply through the years made me realise that persevering with to pay the identical charges (just because we had already invested within the plan) didn’t make sense. That’s a sunk price fallacy.
Which was why with the most recent vital enhance, my husband and I made a decision to downgrade our non-public hospital IP plan to a Class A IP plan — one which we felt was a extra sensible selection for long-term affordability.
Once I noticed that the federal government had launched the Well being Insurance coverage Planner — an internet device designed to (i) assist Singaporeans evaluate medical health insurance premiums and plans throughout totally different suppliers, and (ii) higher perceive the long-term MediSave and money bills essential to assist their protection – I believed if solely the planner existed once we have been reviewing our plans manually! It will have saved us a lot time.
Prior to creating the choice to downgrade, the dearth of readability in terms of future premiums and its influence on our future bills was not one thing that was simple to determine. It took a number of conferences with a number of brokers from totally different insurers for us to collect quotes and evaluate our choices. This course of dragged on for a number of months earlier than we lastly had sufficient data to determine.
In distinction, we arrived at this readability inside minutes on the Well being Insurance coverage Planner.
After making an attempt the planner, it confirmed our choice to downgrade our IP was certainly sound. Right here’s what it confirmed me.
My outcomes from the Well being Insurance coverage Planner (HIP)
I used to be prompted to supply 4 information factors:
From there, it then confirmed me the estimated premium projections I’ll be paying over time:
Primarily based on the planner’s present projections, it estimates that by the point I’m 60, I’ll should pay not less than $11,200 in money yearly for healthcare insurance coverage:
Contemplating that I’m focusing on $5,000 in month-to-month bills throughout retirement, meaning virtually 20% of my finances would go in the direction of insurance coverage alone!
To be trustworthy, that hardly feels sustainable — particularly when the Financial Authority of Singapore’s fundamental monetary information recommends spending not more than 15% of your earnings on insurance coverage safety. The planner additionally highlighted that rider premiums will grow to be more and more pricey as I become old, making it more durable to proceed financing them comfortably.
Utilizing the planner, I used to be additionally capable of evaluate my protection with different Built-in Protect Plans (IPs), and even see how the projected premiums of my present and different plans stack up. The device made it simple to see our protection clearly, and reassured me that switching to a Class A plan would nonetheless present ample safety whereas maintaining our prices (right now and sooner or later) extra manageable.
Because the device additionally generates projections of as much as 30 years or age 90 (whichever comes first) – rounded to the closest age decade — I used to be capable of get a clearer view of how my prices may evolve over time.
Taking a look at these projections, there’s likelihood I’d even think about dropping my rider sooner or later ought to it grow to be too troublesome for us to keep up the additional protection.
So in case your latest IP premiums have additionally prompted you to consider your protection and finances shifting ahead, then it is perhaps time to check out the planner for your self.
And for these of you who’re contemplating whether or not to modify insurers, now you can evaluate your IP choices on the planner and see how the projected premiums of your present vs. different IPs stack up.
Then, if that you must, you’ll be able to obtain a PDF copy of your report – with personalised projections and IP comparisons – and use to debate together with your insurance coverage agent that will help you make a extra knowledgeable choice.
As a suggestion, you should utilize the outcomes of your Well being Insurance coverage Planner that will help you determine questions reminiscent of:
- Are we over-insuring ourselves for conditions that MediShield Life already covers?
- At what level do the premiums cease being definitely worth the trade-off towards different monetary targets?
Having a solution to those would possibly provide the confidence to see and determine how medical health insurance matches into your general finances.
Healthcare planning isn’t merely about going for the very best or most costly plan. It will be important that we proceed to evaluate it as our wants and monetary duties change over time, particularly for the sandwiched era like us who’re paying a number of IP premiums on the identical time.
Make it a behavior to often evaluate your IP and rider protection together with your advisor each few years, since premiums will rise and your care preferences could change as you age.
Check out the device out for your self right here to see what it reveals to you about your personal scenario!
Closing ideas
Since I’ve simply downgraded my non-public hospital plan earlier this yr, I most likely gained’t make one other change anytime quickly.
Nevertheless, utilizing the Well being Insurance coverage Planner helps me to raised visualise how rising premiums may influence us over a lifetime, and reveals that sustaining our present protection could not match my finances as soon as I scale down work.
It additionally pressured me to suppose by way of the more durable questions: do I primarily intend to make use of public healthcare, the place MediShield Life already covers subsidised payments, or do I actually need the additional insurance coverage? Might that cash be higher used for different household wants or for retirement?
In my case, the planner made the influence of our premiums a lot simpler to visualise, and it helped me have a extra constructive dialogue with my husband about how a lot protection we really need – slightly than simply assuming extra is at all times higher. Up to now, his mindset was, “let’s simply preserve paying for peace of thoughts.” However after seeing the planner’s projections, he has now gained readability on how overspending on insurance coverage may go away us with much less money for different priorities — like our children’ training, supporting our dad and mom, and even our personal retirement wants. Consequently, he has grow to be extra open to downgrading and even eradicating our rider sooner or later if we are able to not afford to proceed financing it.
On the finish of the day, every of us must strike a stability between peace of thoughts and practicality, and never over-insuring simply because it feels ‘safer’.
So if you happen to’re questioning which IP works finest for you, it’s value testing the Well being Insurance coverage Planner to grasp what the prices may seem like for you over time do you have to choose to keep up your present stage of protection.
Given the latest developments in Singapore’s medical health insurance scene, it’s changing into more and more essential that we:
- Plan for long-term affordability, not simply most protection.
- Select a protection that we are able to virtually decide to until our 70s or 80s.
Take notice that if you happen to select to stick with your present insurer however downgrade to a decrease ward class IP, there gained’t be any new premium loading or exclusions. In case you’re switching insurers, it’s possible you’ll have to undergo new medical underwriting, so get that authorized first earlier than you terminate your current protection.
Check out the Well being Insurance coverage Planner right now, and uncover extra useful instruments and assets right here.
You too can use Plan Life Ahead, Now! with CPF, a one-stop monetary steerage platform that helps you make knowledgeable monetary selections as you navigate by way of life. Together with your PLAN with CPF dashboard, you’ll be able to establish your monetary priorities and profit from a extra guided method to planning, supported by curated assets that will help you plan confidently for each stage of life.
Disclosure: This text is sponsored by the CPF Board. All opinions and outcomes from the Well being Insurance coverage Planner are that of my very own.Essential notice: Simply because I selected to downgrade my hospital plan doesn't essentially imply it is best to observe go well with. This text shouldn't be misconstrued as monetary recommendation to downgrade, particularly as I do know nothing about your well being situation, dangers, finances or protection wants. As an alternative, please learn the article, check out the planner, and focus on with a trusted monetary advisor in addition to your family members to determine what's the finest transfer for you.
