Most of us buy insurance policies to enjoy a peace of mind. By buying the right insurance policies, we hope to be able to go through life without having to worry about unforeseen circumstances potentially ruining us financially. Hence, getting insurance coverage by buying the right policies matters.
But just because we have bought an insurance policy to cover for a particular risk type does not mean that our risk automatically goes away, or that we are even insured against what we hope to be covered for.
In this article, we will highlight 3 common occasions where people in Singapore may have bought insurance policies to protect themselves, only to realise later on that their insurance plan isn’t providing them the coverage they expected to receive.
# 1 Insured Peril, Home Content Insurance
When you buy a home content insurance policy, the idea is that unexpected damages incurred in your home would be insured by your home content insurance policy.
Most people think that a damage would be covered as long as it’s listed out in the schedule of benefits. This is natural. If you see that an insurance policy will provide a pay out of up to $2,000 for a shattered glass panel, you would think that should the incident occurs, you would be able to claim for a payout to cover the cost of repair and replacement.
Most home content insurance policy have what is termed insured peril.
In the context of home content insurance, insured peril means that your home content insurance policy will only cover you if a damage is incurred because of an incident which falls under the category of insured peril. This would commonly include incidents such as earthquake, explosion of domestic appliance, fire, bursting of water pipes and theft.
However, there may be occasions where damages in your home could be sustained beyond what is caused by these common incidents.
For example, a glass panel could shatter because of an explosion from a household appliance and that would be covered. However, it may also shatter due to excess heat arising from cooking, and unfortunately, this will not be covered by the insurer. So you not only need to show the damage that is incurred, but also what caused the damage.
What You Can Do
To avoid this risk, you can opt for home content insurance that covers against all “all-risks”. Do note however that these plans tend to be more expensive. Also, if the insurer is able to prove that the damage was caused or is the result of an incident that is specifically excluded in its wording, they can still deny you a payout.
# 2 Pre-Existing Illness, Hospitalisation Plans
This is probably the most common and well-known exclusion. Even so, many Singaporeans, usually the older ones, still continue to fall prey to this mistake.
When you buy a hospitalisation plan, commonly known in Singapore as a private integrated shield plan, the insurer will usually exclude coverage for any pre-existing illnesses that you already have.
For example, if a patient has a history of a certain illness (e.g. a stroke), the insurer may exclude coverage of stroke from the hospitalisation plan when providing coverage to the individual. This means if an individual check-in to a private hospital for a suspected stroke, he or she will not be covered.
Do note however that related illnesses may be excluded as well. This is an important point to know because very often, a person may be admitted to a hospital without knowing the cause of their current ailment, which could have been caused by pre-existing condition.
If that is found to be the case, the insurer may not cover the cost of hospitalisation, leaving the hefty hospital bill to be borne by the patient and their families.
What You Can Do
For individuals who have high cholesterol, diabetes and hypertension and who are looking to find a private integrated shield plan that will not exclude these conditions, you may be glad to know that Raffles Health Insurance offers the Raffles Shield. Raffles Health Insurance will consider providing coverage to individuals who have high cholesterol, diabetes and hypertension.
# 3 Pre-Existing Illnesses, Travel Insurance
This is less commonly known, and a potential area of risks for many Singaporeans, particularly those who travel often overseas. Yet, many Singaporeans do not realise this as it’s not frequently discussed.
Similar to many hospitalisation plans, if you have a pre-existing illness, your travel insurance policy may not cover you against these pre-existing illnesses if the condition worsens and you require hospitalisation, treatment or emergency evacuation due to these pre-existing illnesses.
This could potentially leave holiday-goers and their families stuck with a massive hospital bill overseas, if a loved one were to fall ill overseas due to a pre-existing illness, even if they have already bought travel insurance policies.
What You Can Do
MSIG insurance offers the TravelEasy Pre-Ex, a travel insurance policy for individuals with pre-existing conditions. The policy is available to travellers of all ages with stable and controlled pre-existing medical conditions and provides coverage for overseas hospitalisation expenses related to pre-existing medical conditions for up to S$150,000 with no excess or co-payment required.
Insurance Is Important, But You Need To Understand What You Are Buying
There is no question that insurance is one of the most important aspect of personal finance planning. However, what is not frequently stress is the importance of buying the right insurance policies.
The right insurance policies need not be the most expensive policies that provides you with the best coverage. What is more important however is that as a policyholder, you need to know exactly what you are being covered for when you buy an insurance policy.
It’s like going out with a faulty umbrella. Thinking that you are insured against a certain known risk, when you are actually not, may very well be as dangerous as not having any insurance in the first place.
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