Let’s face it – even the healthiest of us can be struck down suddenly by illness, after all, we’ve all seen or heard tales of non-smokers who get diagnosed with cancer, or healthy runners who suddenly suffer from cardiac arrest. These ailments or illnesses can often take a long time to treat, incurring hefty medical bills with lung cancer patients paying more than $20,000 for treatment.

The sudden strain on finances that such illnesses present can be traumatic for families who already have to deal with the grim fact that a member of their family is suffering from a serious condition and this is where health insurance steps in.

What’s Health Insurance?

Health insurance policies help to cover the expenses one may incur as a result of an accident, illness or disability. Coverage varies based on the policy that you purchase. While some cover your hospital and surgical expenses, others provide a lump sum to deal with major illnesses and, some others help replace income as you recover.

I’m young and healthy, why do I need health insurance?

One of the problems with being young, is that we run around thinking we’re invincible. We eat anything we want and push our bodies to the limit. The truth is that more and more young people are suffering from chronic ailments like hypertension and some even suffer strokes in their late 20’s. A grim but rather true fact of life in Singapore is that dying is often cheap, falling sick isn’t, getting protected young, assures you that in any event, you won’t leave your parents saddled with large medical bills.

Health insurance tends to be cheaper in the long run as well, if you sign up at a young age. The rationale is that while you’re young, most people don’t have many health conditions however these will grow in number as you age. Signing up while you’re young ensures that insurers won’t exclude some health conditions from their coverage and limits the cost of your premiums.

Most Singaporeans already have some

The good news is that more and more employers are providing some level of health insurance. In its most basic form, some employers provide an insurance card to their employees, which tends to cover outpatient treatment at certain clinics limited to a certain claimable amount. You may know this as your AIA card, or AVIVA card. These tend to be basic forms of health insurance though, and should not be seen as comprehensive medical cover, most of these are also tied to your stay with the company, which means that should you choose to leave the company, your coverage will cease.

While not all companies provide Health insurance, Medishield is basic forms of health insurance most Singaporeans have, through their CPF that helps alleviate the cost of treatment, though not entirely, as you still have to make payment of a deductible. Deductibles are normally payable in cash or Medisave. Medisave is a form of savings that is allocated from your CPF that makes up between 8 – 10.5% of an employee’s monthly wages.

If I already have Medishield and Medisave, what are we discussing here?

Medishield and Medisave work together to alleviate the costs of your hospital bill, however the system isn’t foolproof. The unwelcome truth is that a single critical illness can wipe out the entirety of your medisave in one fell swoop. This is already the case for most of the elderly population today, where a single heart attack or a brush with cancer requires treatment or surgery that empties their Medisave. The problem with this is that, cancer is often recurring, and heart attacks even when treated with bypass surgery (double/triple/quadruple or otherwise) often are the start of more long-term health problems that they no longer have the money to face.

Buying more health insurance helps to preserve your Medisave and can work in tandem with your Medishield to help prevent such outcomes. The sad truth however, is that for many of our baby boomer generation, who have suffered from previous illnesses or have simply reached a certain age, there are many exclusions and increased premiums for the group that really needs it the most. For the young however, there is still a chance to get better premiums over the longer term with little to no exclusions since most have yet to present with medical conditions.

Falling ill may involve more than paying hospital bills

With Medishield, Medisave and other basic health insurance we do already have some form of medical insurance, but is that really enough? Medishield is a form of Hospitalisation and Surgical (H&S) insurance. Which only covers the costs of treatment, while not protecting you from longer term factors.

First off, remember that being sick often means being unable to work. Medishield may cover against illnesses but the loss of income from being unable to work is not something that’s covered. What good is it, if you can afford treatment but not food? If this is something that concerns you, you should get Disability Income Insurance. Disability Income Insurance, help to replace income earned before an accident or illness. These kick in after a certain period for which you are disabled and once payments begin, the monthly payments stop when you get back to work.

In certain cases, chronic illnesses may leave you paralysed, bedridden or otherwise unable to care for yourself. Note that while Medishield does not cover such circumstances, there is a separate government program called Eldershield which is a form of Long Term Care Insurance. Eldershield pays out a certain sum ($300/$400 – depending on the plan you choose) for a period of up to 72 months, when you cannot perform 3 of 6 daily activities including:

  • washing
  • dressing
  • feeding
  • toileting
  • mobility, and
  • transferring

Always remember that the road to recovery begins in a hospital, but it may end at home, months or even years after problems begin, with that in mind speak to your financial planner about how you can get more comprehensive coverage to protect yourself from longer term harm.

Learn more about insurance and protecting yourself.

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