Your insurance is dead
They say it never rains but pours. Such is the power of Murphy’s Law, and I absolutely guarantee that it will happen to you all at once. You get retrenched, lose your insurance policy you had with your company, and then right at this time a family member gets hospitalized and your invested assets fall to their lowest value so you can’t sell ‘em for cash.
(This is Tip #3 in the Surviving The Recession Financially series)
The lowdown - some risks you just can’t afford to take, so practice some good risk transference and ensure you’re well covered!
Hospitalisation & Surgical Insurance
Ensure you’re at least on some sort of Medishield plan, and not one that is tied to your employer! Remember, once you get retrenched, that company plan is dead fish. Exception: if that plan is specifically portable even if you leave your employer. Most plans that your company is paying for is probably not portable.
Some quick definitions to clear up some confusion that many have:
Medifund - An endowment fund set up by the Government to help needy Singapore citizens who are unable to pay their medical expenses.
Medisave Account - This is one of the 3 CPF accounts. You can use your Medisave to pay for your own and your immediate family members’ hospitalisation, day surgery and certain outpatient treatment expenses.
You can also use your Medisave to pay for the premiums of MediShield and Medisave-approved Integrated Shield Plans.
Medishield - MediShield is a catastrophic medical insurance scheme to help you meet the cost of medical treatment for serious illnesses or prolonged hospitalisation at Class B2/C wards. Also commonly known as a hospitalisation and surgical insurance plan.
Medisave - approved Integrated Shield Plans(Private Shield Plans) - These plans have been designed to include both the benefits offered by the private insurers and MediShield.
We strongly recommend the picking up of Private Shield plans - namely those of GE and Prudential. Try GE SupremeHealth Plan P Plus and Prudential PruShield A Premier. You can also see a comparison of all the plans by Ministry of Health.
If you need help signing up for one, you may email danny@financecents.com.
Income Replacement Insurance
Most Lump Sum coverage insurance plans are used to replace lost of income upon catastrophic events, like death, total permanent disability, major illness, personal accident.
i.e. For a person who earns $5k a month, losing his/her job for a year due to critical illness translates to a need for a $60,000 lump sum insurance.
There are also some insurance plans that replace your income if you do get retrenched or lose your job. If you consider yourself in the high risk group (aka slacker at work), you might want to consider getting yourself one of these.
Retrenchment insurance was first introduced in Singapore by NTUC Income in 2004 but on last check it seems to have been withdrawn. Their vivolife plan however still has a retrenchment waiver rider available but can only be used once and with certain conditions.
Now, the best thing to do is to have another talk with your insurance advisor to see if there’s any insurance you can cut down on, if there’s anything else you should consider in place of those you have, as well as which insurance plans allow you to take a premium holiday for a while (so that during this tough times, the premiums can be deducted against the policy’s cash value), allowing you to forego paying premiums temporarily while still enjoying the critical coverage.
I hope you DO believe in insurance! :)
No Comments, Comment or Ping
Reply to “Your insurance is dead”