CPF Integrated Shield Plan – How to Manage the Rising Cost of Premium?

Cover For Hospitalisation – Integrated Plans

There is a common saying among Singaporeans that “one can die but cannot fall sick”. Morbid as it might sound, it is true to a certain extent. Falling sick in Singapore is expensive and there is no doubt about that. The cost of healthcare treatment in Singapore has become more expensive over the years. To make things worse, there is no sign of slowing down.

Cost Of Healthcare Ballooning Due To Tri-Factor Of Problems

Between 2011 and 2016, Singapore’s average annual healthcare inflation rate was 2.4% compared to the OECD average of 1.6%. In 2015, the cost of healthcare inflated by 15%! This is driven by complication between tri-factor of problems: Ageing population, growing incidence of critical illnesses (CIs) and increasing cost of treatment and medication.

Tri-Factor Of Problems: Ageing Population, Growing Incidence Of CIs, Increasing Cost Of Treatment/Medication

As Singapore’s population ages, our population is likely to see an increase in the number of people falling sick. In particular, CIs like cancer and stroke are becoming more common. For example, the incidence of breast cancer in Singapore has more than doubled over the past 40 years. In the same period, prostate cancer has gone up fivefold.

This puts more pressure on the healthcare system as the demand for healthcare services increases. Simple economics would tell us that higher demand drives up the cost of healthcare (if supply stays constant). Despite the government’s effort to increase supply, it is hard for the supply to keep up with an ageing population’s healthcare needs.

Apart from an ageing population and growing incidence of critical illnesses, there is also a growing trend of more severe illnesses. This is due to the growing resistance of bacteria, viruses and parasites against medical treatments.

Rising Concern Over Increasing Cost Of Integrated Shield Plans

In the past, you could fall back on your private Integrated Shield Plan (ISP) to cover your medical bills. Nowadays, while you still can fall back on your ISPs, there is a rising concern over increasing ISP premiums.

Insurers Have No Choice But To Raise Premiums, Thanks To Unsustainable Losses On Integrated Shield Plans

In 2016, all the ISP providers in Singapore (AIA, Aviva, AXA, Great Eastern, Income and Prudential) made losses on ISP for the first time in 12 years. One year later, in 2017, the losses continue to balloon. With two straight years of losses for the insurers, the only way for insurers to sustain their ISPs is to raise their premiums.

Cover up to Private Hospital (Cash portion only) (Source of table premium are from brochure and application forms)

Cover up to Government Hospital (Cash portion only) (Source of table premium are from brochure and application forms)

New Regulation On Co-Payment For Integrated Shield Plans

Moreover, with the recent change in Ministry of Health (MOH) rules on ISPs, you can no longer buy ISPs with full riders. According to the new rules, every new ISP policyholder will have to bear a 5% co-payment element (capped at $3,000 per annum). It is a double whammy for all new ISP policyholders.

So, How Can You Still Afford Your Integrated Shield Plan?

Finding ways to afford the increasing premium for ISPs is fast becoming a problem for Singaporeans.  This is especially for those who are on the verge of retiring and will no longer have monthly income to sustain the rising ISP premiums. But wait, all hope is not lost. There is still a pretty smart way for you to support the increasing premiums for ISPs.

Solution: Build A Plan To Pay For Your Integrated Shield Plans

Here’s our solution for you: Build a plan to pay you monthly, so you don’t have to worry about the premium.

The payout from your plan can be used to pay for your ISP premium. This ensures that you will continue to be able to afford your ISP premium, regardless of whether you are employed or not. All you need to do is to contribute to your annuity plan for 20 years and most of your future ISP premiums may be settled.

There is flexibility in deciding when you would like to start receiving payouts. You can also choose to receive it at a later date if you find that you don’t have a need for the payout to pay for your ISP premium even it reached your payout age. The payout that you choose not to receive can be redeposited to earn interest from your insurer. It’s a totally flexible plan that can help you manage your ISP premiums without much effort!

For example, your total premium for the planning is about $40,191.90, that is about 15 years of private shield plan premium from age 60. With a return estimated at $747.21/ month projected at 4.25% return for 10 years, which will take about 4.5 years to break even from the payout start date. And if you choose to redeposit back to the company, you will be able to gain higher return. Most importantly, this will help you to support your premium for your private shield plans when you need it the most for more than 20 years.

At the same time, it provides some disability income benefit which will provide you 50% more benefit in the event not able to perform 2 out of 6 activities daily living and 100% more benefit in the event not able to perform 3 out of 6 activities daily living. If the guaranteed benefit is $500 per month after diagnose with not able to perform 2 out of 6 activities, the benefit will be $750 instead and $1,000 in the event not able to perform 3 out of the 6 activities.

To assist you, here is the Guide on how to fund your hospitalisation insurance premium in the long run to get a rough indication of settle age plans premium to payout to fund for your hospital plan. It is a good indication how much you can use the planning to fund your hospital plan future premium. Click HERE to download the guide.

Now, we have already come up with the perfect solution for you. Lets make the smart choice?

Article by Alan Chong,

Email: jooshin.chong@proinvest.com.sg

Need any help?

If you want to know more about Integrated Shield Plan or any other enquiries, you may contact me through whatsapp, schedule an appointment with me or fill up the form below and I will get back to you as soon as possible.


Financial Services Manager
RNF No. CJS200166139


B.Eng (Hons), AFC


October 2019
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