I received a shock upon receiving my invoice for my Built-in Protect plan (IP) final yr. Though I’m nonetheless in my 30s, it got here as much as virtually S$2,000.
My IP premiums had been rising quicker than I had anticipated. I couldn’t think about what it’ll be like if I’ve to proceed paying at this rising charge for the following few many years simply to take care of 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”.
The truth is, if it wasn’t for the 20% low cost, my invoice would have been over S$2,300. In order that received me considering — am I protecting this plan only for the financial savings, moderately than checking if the protection actually fits my wants and price range?
As somebody within the sandwiched era, my husband and I usually really feel the burden of elevating two younger children and supporting our aged dad and mom. Our price range needs to be break up for your complete family — with our youngsters and oldsters too – and this isn’t straightforward once we’re those paying for everybody’s a number of insurance coverage. 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 would like extra protection:
- Built-in Protect Plans (IP) – covers even bigger hospital payments, particularly if we go for therapy at non-public hospitals
- Rider – reduces potential out-of-pocket bills comparable to 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 will be coated by MediShield Life, with premiums payable by MediSave — so perhaps paying further for an IP isn’t important.
Moreover, premiums for personal protection might climb dramatically as we age. Provided that our non-public medical insurance coverage premiums might be as much as 5 occasions of our MediShield Life premiums once we hit our 70s or 80s, might 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 would like 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 max protection, we didn’t assume that far forward about how premiums would rise as we received older. We each assumed the prices would keep roughly the identical, and I didn’t realise how my future obligations — from elevating children to supporting aged dad and mom — would add on to my whole price range.
After I spoke with my mates, 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 need to get the best protection potential 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 price range.
However as we received 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 individuals in our family i.e. for two adults, 3 aged and a pair of younger children.
That was once we realised, simply because we signed up for the best plan doesn’t imply we’ve to keep it up perpetually.
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.
After I noticed that the federal government had launched the Well being Insurance coverage Planner — an internet instrument designed to (i) assist Singaporeans evaluate medical insurance premiums and plans throughout totally different suppliers, and (ii) higher perceive the long-term MediSave and money bills essential to help their protection – I assumed if solely the planner existed once we have been reviewing our plans manually! It might have saved us a lot time.
Prior to creating the choice to downgrade, the dearth of readability in terms of future premiums and its affect on our future bills was not one thing that was straightforward 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 info to resolve.
In distinction, we arrived at this readability inside minutes on the Well being Insurance coverage Planner.
After attempting the planner, it confirmed our determination 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 offer 4 information factors:
From there, it then confirmed me the estimated premium projections I’ll be paying over time:
Based mostly on the planner’s present projections, it estimates that by the point I’m 60, I’ll must pay at the very least $11,200 in money yearly for healthcare insurance coverage:
Contemplating that I’m focusing on $5,000 in month-to-month bills throughout retirement, which means virtually 20% of my price range 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 turn into more and more expensive as I grow old, making it tougher 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 instrument made it straightforward to see our protection clearly, and reassured me that switching to a Class A plan would nonetheless present adequate safety whereas protecting our prices (at present and sooner or later) extra manageable.
Because the instrument 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 might evolve over time.
these projections, there’s an excellent likelihood I’d even think about dropping my rider sooner or later ought to it turn into too tough for us to take care of the additional protection.
So in case your current IP premiums have additionally prompted you to consider your protection and price range transferring ahead, then it could be an excellent time to check out the planner for your self.
And for these of you who’re contemplating whether or not to change 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 it is advisable to, you may 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 determination.
As a suggestion, you should utilize the outcomes of your Well being Insurance coverage Planner that will help you work out questions comparable to:
- 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 resolve how medical insurance matches into your general price range.
Healthcare planning is just not merely about going for the best or most costly plan. It is vital that we proceed to evaluation it as our wants and monetary obligations 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 repeatedly evaluation 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 instrument out for your self right here to see what it reveals to you about your individual state of affairs!
Last ideas
Since I’ve simply downgraded my non-public hospital plan earlier this yr, I most likely received’t make one other change anytime quickly.
Nevertheless, utilizing the Well being Insurance coverage Planner helps me to raised visualise how rising premiums might affect us over a lifetime, and exhibits that sustaining our present protection could not match my price range as soon as I scale down work.
It additionally pressured me to assume by the tougher 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 affect 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 want – moderately than simply assuming extra is at all times higher. Up to now, his mindset was, “let’s simply hold paying for peace of thoughts.” However after seeing the planner’s projections, he has now gained readability on how overspending on insurance coverage might depart us with much less money for different priorities — like our children’ training, supporting our dad and mom, and even our personal retirement wants. Because of this, he has turn into extra open to downgrading and even eradicating our rider sooner or later if we will 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 in case you’re questioning which IP works finest for you, it’s value testing the Well being Insurance coverage Planner to know what the prices might seem like for you over time must you choose to take care of your present degree of protection.
Given the current developments in Singapore’s medical insurance scene, it’s turning into more and more essential that we:
- Plan for long-term affordability, not simply most protection.
- Select a protection that we will virtually decide to until our 70s or 80s.
Take notice that in case you select to stick with your present insurer however downgrade to a decrease ward class IP, there received’t be any new premium loading or exclusions. When you’re switching insurers, you might have to undergo new medical underwriting, so get that authorised first earlier than you terminate your present protection.
Check out the Well being Insurance coverage Planner at present, and uncover extra useful instruments and sources right here.
You may also use Plan Life Ahead, Now! with CPF, a one-stop monetary steering platform that helps you make knowledgeable monetary selections as you navigate by life. Together with your PLAN with CPF dashboard, you may determine your monetary priorities and profit from a extra guided strategy to planning, supported by curated sources 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 you must comply with swimsuit. This text shouldn't be misconstrued as monetary recommendation to downgrade, particularly as I do know nothing about your well being situation, dangers, price range or protection wants. As a substitute, please learn the article, check out the planner, and talk about with a trusted monetary advisor in addition to your family members to resolve what's the finest transfer for you.
