Insurance coverage; medical shield; financial planning; personal finance

For the longest time, I wanted to blog about Integrated Shield Plan (IP) but have been putting it off due to various reasons. The impetus for this article is due to a recent request by a lifetime member. He is seeking my views on the recent saga between the medical professionals and the insurers over the Integrated Shield Plan (IP).

The latest sparring between Singapore Medical Association (SMA) and insurers came after Ministry of Health (MOH) banned the sale of new Integrated Shield Plan (IP) with full rider on 7 March 2018. What riled many Singaporeans was the manner in which the policy was implemented. To prevent people from rushing to buy full riders, those buying a rider from 8 March 2018 had to switch to the new scheme by 1 April 2021 at the latest. Back then, MOH has not mandated any change to the 1.1 million policyholders who have full riders.

I am one of the 1.1 million policyholders who have full riders. When MOH announced that new Integrated Shield Plan (IP) must come with the co-payment feature, I feared that the insurers would do the same for existing policyholders. Indeed, my worst fear came true on 18 February 2021 when NTUC Income emailed me changes applicable to my Plus Rider.

Most of us work our entire lives just for our family. Some might be after improving just their lifestyle, but at least every man or woman with kids keeps the interest of his/her kids first. They go the extra mile in professional life and work extra to get the best for their children.

Many succeed in getting more than what their kids need. They know they will take care of all their needs while they are alive and working. However, it’s a problem when they won’t be here. This is why there is a service called life insurance. Millions of people get life insurance all around the world, and here is why you should too.

It’s for Your Family, Not You

You have to pay a premium your most life or until you die. This can scare many people, thinking about how they save enough money. Many think that they do many other better things with that same money. Some would choose to invest in a house, and some in their business.

However, remember that it’s not an expense you are doing for yourself. It’s not a wish but a need, and you are doing it for your family. It’s much easier to spend money when you are spending it on your family.

A very belated Happy New Year to all readers! My family had a bad start for 2020 and things only settled down for the past few days. Now that things had pretty much gotten back to normal, I am taking this opportunity to pen down some thoughts and reflections about what had happened to my family. In addition, I have also decided to share my positive experiences with NTUC Incomeshield. Hopefully this sharing will benefit readers when crisis struck home.

For sure, nobody is ever prepared for crisis. But when disaster strikes, make sure you are ready.

This is the second time that my family had activated NTUC Incomeshield. In both instances, the claiming experiences were very positive. Many people like to joke that NTUC stands for “No Trouble Until Claim”. But our claiming experiences turned out to be otherwise!

Note that this is not a sponsored post by NTUC Income nor am I promoting NTUC Incomeshield. In addition to this, the information contained in this article is not meant to be a form of financial advice. If you have any queries pertaining to NTUC Incomeshield, please seek financial advice from a licensed financial consultant.

Enhanced Incomeshield Preferred with Plus Rider

On 2 January 2020, my wife had a severe headache in the morning.

According to the Singapore Cancer Registry Annual Report 2015, about 35 Singaporeans are diagnosed with cancer every day. This is a frightening statistic which gives me countless sleepless nights. As a sole breadwinner, it is important that I am covered adequately so that my family will not be financial affected if I am struck with anything untoward. In my last update on my insurance coverage in 2018, I revealed that I had purchased an endowment plan from NTUC Income. But I have forgotten to update that I had also purchased AIA Triple Critical Cover.

In this article, I will share my motivations for buying AIA Triple Critical Cover. I will also share the merits and limitations of AIA Triple Critical Cover. Note that this article is not sponsored by AIA nor am I giving any financial advice. I am just sharing my personal experiences. Readers should engage financial consultants if in doubt because everyone’s financial situation and needs are different.

What attracted me to buy AIA Triple Critical Cover insurance was because of its unique selling point of ‘Power Reset’ feature, which restores the critical illness coverage amount back to 100% even for early stage critical illnesses. However, there are a major drawback for this policy that I will like to share so as to provide a more balanced review.

In relation to my previous article “My NTUC Income Life Insurance Policies”, a member requested for my opinion on investment linked policy (ILP). He also wrote that the investment linked policy that he had bought was not profitable. Is investment linked policy really that bad and is it worth your time and money?

In this article, I am going share my candid views on investment linked policy. Readers would know that I don’t mince my words, so I am going to pull no punches.

For a period of time, investment linked policy used to sell like hotcakes in Singapore because it has been marketed as a unique financial product that offers potentially high returns and insurance coverage. The commission fees for investment linked policy are usually very lucrative. Thus, obviously insurance agents would attempt to sell this type of insurance product in a bid to make more commission fees. But in my opinion, this is one of the worst insurance products for consumers and one should avoid buying it unless he is 100% sure of what he is buying into.

As a matter of fact, I have examined this topic before in 2015 (Frightening Truth about Investment Linked Policy).

In life, disaster often strikes when you least expect it. Of course, no one is ever prepared for a disaster but having life insurance coverage would help to put your mind at ease that your financial losses are mitigated.

During the National Day week, my family bought two life insurance policies. One was NTUC Income Limited Pay Revosave and the other was AIA Triple Critical Cover. The decision to strengthen my family’s protection and savings arose after a strategic life insurance review with my wife.

As a finance blogger, I always advocate my readers to do annual review on their life insurance coverage. This is because family situations often change, so the most prudent approach is to do timely review to ensure that the interests of your family are well-taken care of.

In 2016, I wrote that I upgraded my family health insurance to private ward class and also bought full riders for the whole family. Boy, am I glad that I did so. Because in March 2018, Singapore government mandated the removal of full riders for new applicants of private health shields. It really drives home the importance of proactively managing my life insurance portfolio.

There are many who questioned the role of whole life insurance and there are even finance bloggers who claimed that this financial product is a scam.

There are a few battles you simply cannot afford to lose in life. While insurance would not enable you to avoid these catastrophic disasters, it can provide an important safety net for you to ride out these storms and gives you a piece of mind.

Notwithstanding the above, the recent announcement on major changes to the Integrated Shield Plan rider had thrown a spanner in the works to my insurance portfolio strategy.

My family’s journey

Very often, I look at my children and can’t help feeling how fortunate they are. At their age, they already had overseas holidays, get chauffeured to school in family car and live in a comfortable condominium. These are luxuries that I could only dream of when I was a young kid.

At some point, I even felt jealous of them because they don’t have an inkling [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Do you need cash? It may sound odd but you can lend money to yourself. Life insurance loan allows you to do so. Before you dismiss this as yet another click-bait article, I want you to keep an open mind and read on. Because this strategy may be extremely useful in your wealth building journey.

In various stages of life, we may face cash flow problems. Sometimes the money woe may be due to a loved one incurring unforeseen massive hospital bills due to an accident or it could be the purchase of a big-ticket item like a new house which requires substantial hard cash for down-payment and renovation expenses.

Whatever the case, we are likely to encounter phases of life whereby we may need some financial help. In this article, I would share how you can lend money to yourself through insurance loans.

As a general principle, I would not encourage readers to borrow unnecessarily. We should all live within our means. But recent events made me realize the vulnerability of many low-income families in Singapore. I read an article of a security guard who suffered from a massive heart attack and thereafter struggled to pay hospital bills amounting to a staggering $78,000.

In a couple of years, I am turning 40 and would be automatically enrolled in Eldershield. Launched in 2002, this national scheme is aimed at providing basic financial protection to Singaporeans who need long-term care. My late father was one of the beneficiaries of Eldershield payouts. Henceforth, in this article, I will share my views on this insurance policy.

According to the Ministry of Health’s website, it is estimated that 1 in 2 Singaporeans who are healthy at the age of 65 is at risk of having a long-term disability over their lifetime. However, not many Singaporeans are prepared for such a scenario. To meet this gap, ElderShield provides eligible policyholders a monthly cash payout for a period of time, in the event of suffering from severe disability.

ElderShield policyholders can choose to enrol in Eldershield 300 or 400. The former is for policyholders who joined between 2002 and 2007. The payout amount is $300 per month and duration is 5 years. My dad qualified for this plan back in 2005. Eldershield 400 is for policyholders who joined after 2007 and the payout amount is $400 with duration up to six years.

Eldershield

Enrolling in Eldershield is easy because by default you are automatically enrolled into the scheme unless you choose to opt out.

Are you intending to buy insurance policies? If so, this is an article that you must never miss. And I want you to pay close attention to the message contained in this article. If unsure, do read it over and over again. Today, I am going to share with readers the Insurance Nomination Law promulgated by the Singapore government on 1 September 2009. I suspect many Singaporeans are not aware of this relatively new legislation. So, I hope readers will find this information useful in their wealth building journey.

In recent years, many financial bloggers have been espousing the merits of direct purchase insurance products. However, most people may not be familiar with the insurance laws in Singapore. Without the proper advice from financial advisors, many consumers may end up buying the wrong insurance products that may not suit their needs. Hence, I always feel that financial advisors offer a value proposition even under today’s technology evolution.

Again, I must emphasize that this article is not meant to be a form of financial advice. It is for information only. If in doubt, please consult your financial advisor.

Making nomination

When you buy insurance, you are [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only.

In one of my previous articles, I touched on how to apply for exemption from CPF’s Home Protection Scheme (HPS). A reader wrote in and posted an interesting question on what I usually look out for when buying mortgage insurance. Today, I shall touch on the difference between terminal illness and critical illness. But before you proceed, it is important that you make the effort to understand my article before jumping to conclusion. Not understanding the thin fine line between terminal illness and critical illness could be financially fatal. And I do mean it.

Most people who do not work in the insurance industry are confused between terminal illness and critical illness. To be honest, I used to be one of those. But my understanding starts to improve a little bit over the years as I talk to many financial planners and they shared with me some useful tips. Of course, I don’t work in the insurance sector and is not a certified financial planner. So, what I am going to share here is based on the best of my knowledge and readers should not misconstrue it as a form of financial advice. If in doubt, always check with your financial advisor.

My mother-in-law recently got admitted into a public hospital for an operation and was warded in a subsidized Class B2 ward. For the past few days, she had been complaining about being unwell and in acute pain. On a few occasions, we informed the nurses about this but they appeared nonchalant and were not helpful at all. It was indeed a frustrating experience but it also vindicated my decision to upgrade my family’s health insurance to private medical shields since last year.

The follow-up appointment was an even worse experience. We waited for 7 hours before the doctor’s consultation. The nurse was also very rough in her handling and caused a lot of discomfort for my mother-in-law.

When Singapore government rolled out the Medishield Life in 2015, many Singaporeans assume that there is no need for private medical shield plans. After all, the coverage of the new Medishield Life seems comprehensive, covers everyone and protects you for lifetime.

So why waste money on upgrading your health insurance to private medical shield plans? But then again, not many people realize the gaps that exist in the system.

Firstly, since Medishield Life [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only.

Yesterday, my colleague shared with me that his mother was diagnosed with Stage 3 breast cancer. I was shocked to hear this news but really didn’t know how best to advise him. So I thought the only thing I could do was to listen to his story.

Apparently, my colleague’s mum went for a diagnosis after feeling a lump in her breast two months ago. The preliminary tests revealed that she had breast cancer in the early stage. However, recent tests showed that the cancerous cells had spread aggressively and doctor advised that surgery was needed. Thereafter, she would also need to go for chemotherapy.

Understandably, my colleague’s mum is now feeling very depressed. After all, being diagnosed with a late stage cancer illness can be daunting. When a person is at this phase of her life, there are a lot of uncertainties and fear. It doesn’t help that my colleague’s father is a small-time business owner and needs to travel frequently. Thus, during this difficult time, his mother lacks the emotional support from her husband.

Being the eldest son, my colleague is the pillar of support for his family. The mother is a full-time house-wife. He has two younger brothers who are still schooling and one of them is studying in Australia.

I came across the article by fellow blogger, Andrew Loh, on his recent medical bill. Andrew is a blogger whom I respected a lot because of his various quality articles in Yahoo Singapore website. Arising from his recent medical ordeal, I realized that there is a lack of understanding on Medishield Life among Singaporeans.

In his article, Andrew was very clear on the mechanism of Medishield Life. But several readers were puzzled as to why the Medishield Life payout was only $720 when the bill is $3959.19 after government subsidies of $6767.90.

Without verifying, many Singaporean readers took this opportunity to slam government policies and made baseless toxic remarks.

Firstly, Medishield Life has deductible and co-insurance portions that can be paid using Medisave or cash. Many Singaporeans thought that Medishield Life cover 100% of medical bill, which is untrue. The policy intent of the deductible is to keep MediShield Life targeted at large bills, and is only payable once in a policy year. Co-insurance ensures that policyholders are responsible for their medical bill.

Secondly, if you do not wish to pay the deductible and co-insurance fees, you can always opt for Integrated Shield Plans (ISP). Many of the ISP in the market have options for riders to waive off deductible and co-insurance fees.

MediShield Life was rolled out in November 2015 to replace the MediShield. Unlike its predecessor, MediShield Life is a mandatory basic health care insurance designed to provide better coverage for Class B2 and C wards in public hospitals. There is also no need for Singaporeans to apply for MediShield Life. Given that MediShield Life provides enhanced coverage, it is important to review the merits of MediShield Life versus Private Integrated Shield Plan (IP).

Features of Medishield Life

Before we look at IP, there is a need to consider the key features of MediShield Life. Firstly, MediShield Life provides lifetime coverage and even those pre-existing conditions can be covered. The lifetime claim limit has been removed and the maximum claim limit has been increased to $100,000 per policy year. Thus, with the improved benefits, most Singaporeans will fork out less cash amount for hospital bills.

As a result of these enhancements, the premiums for MediShield Life have also increased. However, the premiums for MediShield Life can be fully paid using CPF’s Medisave account. To offset the premium increases, the government is also providing subsidies. Clearly, the policy intention is to provide an affordable health care insurance that is able to meet the majority population’s needs.

It was supposed to be one of his daily routine toilet trips in the night but to his utmost horror, there was a lot of blood in his urine. With much fear and worry, he could not sleep that night and the next morning, he went to see his family doctor. To his shock, he was diagnosed with kidney cancer and had to remove one of his kidneys.

That was 30 years ago and my insurance agent lived to tell the tale. I bought my first insurance from him when I was an eighteen year old army boy. Throughout the years, whenever I bought new life insurance policies from him, he often relate this incident to me. I guess he tried to reinforce in me that life can be very unpredictable. Using himself as an example, he don’t smoke or drink and live a perfectly healthy lifestyle. So until this day, he also don’t know why he suffered from kidney cancer. However, I was in my twenties and in the prime time of my life. So like many people, the possibility of death and critical illnesses seem so remote to me.

Now that I am in my mid-thirties, things are very different.

Two weeks ago, I upgraded my whole family’s health insurances to Integrated Shield Plan (Private Hospital)  to provide maximum coverage for medical expenses. As I also opted for the rider to cover the deductible and co-insurance portions, the amount of cash forked out was about $1,100 per annum after Medisave deduction.

The decision to upgrade our health insurances came about after a health scare that occurred to my colleague and my brother’s daughter who suffered a broken leg a couple of months ago. These incidents certainly really drove home the importance of buying health insurances when in the pink of health. With the kick-in of Medishield Life with effect 1 November 2015, you are still eligible for Medishield Life even if you have pre-existing illnesses or health problems at the point of applying for Medishield Life. However, do note that if your pre-existing conditions are very serious, you may need to pay additional premiums.

Personally, I am glad that the government has finally decided to provide coverage to Singaporeans born with pre-existing illnesses. This is the right thing to do, especially for new-born babies born with defects or chronic health problems. The Medishield Life will also offer protection for life to Singaporeans and Permanent Residents, so we need not worry about not having medical expenses coverage when we are old.

Last year, during a meet up with the man behind BeMoneySavvyToday.com, Brendan Yong shared with me his insights on how to succeed in investing. Brendan works in the financial industry for 11 years and is a veteran when it comes to insurance matters.

First and foremost, most Singaporeans tend to rely on tips from friends and investment bloggers on when is the best time to invest and which are the best stocks to invest in. Most of them either are not financially savvy or have no time to do research. But to succeed in investing, there is no shortcut and you need to put in a lot of hard work. Half the game is won if you make the effort to analyse and take care of the downside risks.

Secondly, you must understand your character and priorities. Your personality and behavior determine the outcome of your investment decision, not the market. Over time, you would realize that your greatest enemy is yourself because managing your emotions is key to winning the investment game. On priorities, many of us have family commitments or hectic careers, so not many people can have the luxury of time to do stock research. For this group of people, choosing a reliable financial planner would make sense.

Last month, the Monetary Authority of Singapore (MAS) launched compareFIRST with Consumers Association of Singapore, Life Insurance Association of Singapore and MoneySENSE. compareFIRST is a portal that contains information on life insurance products offered by all the life insurers in Singapore. However, way before the website was launched, last year, SG Wealth Builder had an opportunity to meet up with Brendan Yong, of BeMoneySavvyToday.com.

Unlike me, Brendan has worked in the financial industry for 11 years and is a veteran when it comes to insurance matters. Nevertheless, both of us shared the same belief that insurance is a form of protection, and never meant for investment purposes. In that meeting, he revealed a frightening industry secret on investment-linked insurance policies.

When touched on the topic that there was an initiative by MAS to promote online direct purchase for insurance products, Brendan chuckled and commented “Of course I knew that as I work in the industry. As a matter of fact, MAS had a round of consultation with the industry players on the proposed move”. However, Brendan dismissed that such a move reflected that consumers are ready to purchase insurance products directly from the insurers.

He shared that financial planners and insurance agents still has a role in helping consumers in making the most informed choice when it comes to buying the most suitable insurance products.

Singaporeans love to buy and sell properties and cars, and the secondary markets have been vibrant for these two big-ticket items. To source for the best deals, Singaporeans can conveniently log on to online websites like iProperty and SG Car Mart. But how about insurance policies? In US and UK, the secondary markets for traded life and endowment insurances are pretty robust. However, in Singapore, the market for traded life and endowment policies is still pretty nascent.

Traded life insurances exist because the existing policy holder decides to liquidate his life or endowment policies due to financial problems or when the insured person experiences a decline in life expectancy and hope to cash in on his insurance.

Usually the cash value would be low if the policy holder surrender the policy to the insurer, so a better option would be to sell to another individual at a higher price as offered by the insurer. Throughout the transaction, no new policy is created and only the existing policy bought by the original policy holder is used.

An important thing to note is that if you purchased a traded life policy or traded endowment policy, you are required to pay the premiums until the policy matures or the person whose life is insured dies.

Tan Kin Lian used to be my hero and I started this blog after being inspired by his blog. I like his online work helping to answer Singaporeans’ queries on matters regarding insurance policies.

Recently, I was reading Tan Kin Lian’s blog and came across his posting “Consumers who deserved to be ripped off”. I was quite angry when he made that comment because most people would find it difficult to understand the mechanism of the various insurance policies.

In the olden days, there was a lack of information available to the public for consumers to make informed choices. Thus, most of us would rely on our insurance agents to help us make the best financial decisions. In today’s Information Age, we can obtain information from online easily.

Make no mistake, I totally agreed with him that we should all buy term policies and hospitalization plan for protection purposes. The rest of the money can then be used for investing or consumption.

But what I am unhappy was that he made all these comments to the public after he stepped down as CEO from NTUC Income in 2008. I have been a loyal NTUC Income for 13 years and bought 3 life insurance policies during Mr Tan’s reign as CEO.