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From the time you start working, you start making many personal financial decisions. This phase of adulting will see you start paying your own bills and making your own financial plans. During this period, you may also get married, buy a home, and start a family.
While all these are exciting plans that you will look forward to, one of the most important aspects of personal finance that you can’t afford to ignore is getting adequate medical insurance coverage. After all, with the rising cost of healthcare in Singapore, medical cost can be a major concern for many Singaporeans.
You Already Have MediSave And MediShield Life
Fortunately, the Singapore government has provided a basic safety net that ensures you are able to afford medical treatments.
Each month, you will notice a portion of your salary going into your CPF MediSave Account (MA). For those under 35, this will amount to 8% of your salary. You can use your MA savings for certain healthcare needs, including hospitalisation and surgery.
You may also be familiar with your MediShield Life coverage, which provides lifelong coverage against large healthcare bills. MediShield Life coverage is designed to cover subsidised hospital bills at Class B2 and Class C wards in public hospitals.
On your CPF statement, you will also notice the annual MediShield Life deductions from your MA – denoted as “MSL”.
For those aged between 21 to 30, your annual MediShield Life premiums would be S$252.34 while those between 31 and 40 pay S$393.64 annually. MediShield Life premiums will also increase as you age.
Beyond Singapore’s national healthcare schemes, many Singaporeans layer up medical coverage via integrated shield plans (IPs) provided by private insurance companies.
Why Getting Private Integrated Shield Plans Is Important
As a young working adult, buying additional health insurance – beyond what is already mandated by the government – may not feel like it’s an immediate priority. While you may appreciate its importance, you may just see it as an added cost that you’re unlikely to benefit from, especially if you’re healthy, fit and have never been hospitalised before.
However, being hospitalised may not be due to a health condition, and often, beyond your control. According to the Ministry of Health (MOH), the top 10 reasons for hospitalisations in 2021 include accident, poisoning and violence (1st) and skin-related infections (6th).
In a scenario where you need to be hospitalised, you would likely want the highest quality of healthcare that you can afford. You may wish to choose a preferred doctor and be able to focus on recovery without having to worry about the cost of healthcare.
Even though MediShield Life provides coverage in higher class wards in public hospitals and in private hospitals, you will likely be left with a significant shortfall. This is because MediShield Life coverage is sized for subsidised healthcare in Class B2 and Class C wards in public hospitals.
One simple way to think about the importance of private integrated shield plans (IPs) is that it allows you to seek a quality of healthcare that you prefer – and can afford. Moreover, MediShield Life does not include pre- and post-hospitalisation coverage, which can add significantly to your cash outlay for hospitalisation.
As a young adult, the last thing you want to worry about is draining your or your family’s savings or going into medical debt because of a hospitalisation.
What If You Can Fully Pay Off Your Private IP Coverage Using MediSave?
There are various private integrated shield plans (IP) that you can buy today. While they all incorporate similar deductible and co-payment features, difference in coverage levels can mean certain IPs are more costly than others.
One IP that you can fully pay off using your MediSave savings is Singlife Shield Starter. Ideal for young and healthy working adults, the premium for the IP is just S$300 (before GST). This falls in line with the S$300 Additional Withdrawal Limit (AWL) for those who are aged 40 and below.
The added good news is that from now till 31 October 2023, you can use the promo code “0GST” when you buy Singlife Shield Starter and Health Plus Starter to enjoy full GST waiver on first-year premiums – this means you’ll pay just S$300 using MediSave for Singlife Shield Starter and S$1 out-of-pocket for Singlife Health Plus Starter.
This plan provides coverage at more than 500 preferred medical providers in Singapore, with an annual coverage of up to S$20,000.
To illustrate the benefit, if you incur a S$10,000 hospital bill at one of the preferred medical providers, Singlife will cover 58% of the bill – due to S$3,500 in deductibles and 10% co-payment features.
(All screenshots are from Singlife website)
By topping up S$1 to purchase the Singlife Health Plus Starter rider, your co-payment reduces to just 5%.
This will mean you end up paying just S$1 in cash for your first-year premiums – after using the AWL of S$300 from your MediSave to pay for the premium, and getting a GST waiver for on the first-year premiums for both the Singlife Shield Starter and Health Plus Starter rider.
Singlife Shield Starter quotation for first-year premiums
Your Health Situation Can Change At Any Time
You may be concerned about the Singlife Shield Starter annual limit of just S$20,000 and may prefer a higher annual limit as you climb up the corporate ladder.
The Singlife Shield Starter and Health Plus Starter plan is exactly what it claims to be – a starter plan. You’ll progress to a higher coverage plan – Singlife Shield Plan 2 and Health Plus rider – when you turn 40 and without any further medical underwriting. This means you’ll retain protection for existing medical conditions, even after you turn 40.
Singlife Shield Plan 2 is an IP providing coverage for hospitalisation in A Class wards in public hospitals, while the Health Plus rider continues to reduce your deductibles and co-insurance payments. With this upgrade, which comes at higher premiums, your annual hospitalisation coverage under these plans will be upsized to S$1 million.
You can sign up for Singlife Shield Starter and Health Plus Starter online. All you need to do is fill in an online form, and you’ll get a quote within minutes.
Your out-of-pocket expense will be just S$1 for the first year when you get the plan and rider bundle – that’s after paying your S$300 premiums for Singlife Shield Starter via MediSave, S$1 in cash for your Health Plus Starter rider premiums, and enjoying GST waiver on both the main Integrated Shield Plan and rider.
Terms and conditions apply.
This policy is underwritten by Singapore Life Ltd. DollarsAndSense.sg is not an insurance agent or intermediary and is not allowed to solicit any insurance business or give advice on or recommend any product nor be involved in any discussions, negotiations or the arrangement of any insurance contract between you and Singapore Life Ltd. Please direct all enquiries to Singapore Life Ltd.
This material is published for general information only and does not have regard to the specific investment objectives, financial situation and particular needs of any specific person. You should read the Product Summary and seek advice from a financial adviser representative before making a commitment to purchase the product.
As this product has no savings or investment feature, there is no cash value if the policy ends or if the policy is terminated prematurely. Buying a health insurance policy that is not suitable for you may impact your ability to finance your future healthcare needs.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
Protected up to specified limits by SDIC.
The information contained in this broadcast is accurate as at 20/09/2023.