Changes Are Confusing – What can I do?
When I explained the various “things to know” about IPs using the concept of heavy rain and umbrella, people tend to understand better and almost inevitably, I will get the “What’s the point of this type of umbrella?” remark. (As you are reading this, is that your first thought as well?)
My answer is always the same – we don’t design the umbrella; we use the umbrella. Unless you want to give up your umbrella (i.e. terminate your IP coverage), your concern is to learn how to optimise it’s use and ultimately, protect yourself against getting wet in a downpour.
That being said, when it comes to your personal financial planning, here are the 3 main things you can do which are entirely within your control:
A. Each IP provider has a “style” – Master the style of your IP Provider
Your IP provider is likely to have a combination of some or all of the 5 features I described earlier and some may even have other features that I have not described. Knowing the “style” of your IP provider is essential for you to optimise your coverage.
For example, you will need to know how to access the panel doctors, what is the process to follow, how do you get help, how do you get a certificate of pre-authorisation or letter of guarantee…etc. You will also need to know what is the process when you are using a non-panel doctor such as what is covered and not covered, how will the IP provider support non-panel doctor claims…etc.
Of course, when you have a financial planner or insurance advisor helping you, you can just reach out and get the “concierge support” from working with an advisor but nonetheless, whether you have someone helping you or not, the goal is the same – learn the style of your IP provider so that you can use it to protect yourself as much as possible financially.
But, what if you don’t like the style of your current IP provider? This brings me to the next consideration…
B. If you don’t like the style of your IP Provider, you can consider a change (with caveats)
Before I comment on this second consideration, let me be clear – I do not encourage switching your IP provider or terminating your IP. By default, you should stay where you are, learn the style of your IP provider and learn all you need to learn to maximise your coverage should you need to make a claim. Go with the flow and roll with the changes.
One more important point, you are likely to want to switch to another IP provider because there are some features at the new IP that you want to switch to. It is important to remember that the new IP provider that you switch to may change their “style” and remove the feature that you like or add a feature that you dislike in the future. In essence, there are no guarantees that you won’t end up at the same place having made the move.
However, if you wish to explore the option of making a switch, here are the caveats to consider:
- Make full declaration of your health when applying to the new IP provider
- Only switch when you are able to get the same or better coverage terms
- Read and understand the clauses and definitions related to “Pre-existing Conditions” and standard exclusions to see if there are any that might apply to you
One final point, I believe this is one of those moments where it’s better to act with the professional advice and recommendation of a financial planner rather than DIY-ing and this brings me to my next point.
C. Rework Your Risk Management Plan
IPs are part of your insurance risk management plan to protect against the “Loss of Health” risk. There are other insurance products such as personal accident insurance, disability insurance, critical illness insurance and other benefits such as hospital cash benefits that can work together in tandem to provide comprehensive protection.
In fact, one of the benefits that came from the introduction of “co-payment” to the IPs is that the premiums will be reduced and the premiums saved can be reinvested to plug other gaps or supplement your hospitalisation insurance in other ways.
One idea that you can consider is to reposition your IP which used to be able to offer “swiss-knife” coverage for all hospitalisation bills to one that is intended to cover for catastrophic bills only. This change in focus will mean that the need for riders can be reviewed, more premiums can be saved but you will have to consider the need to budget for higher deductibles and co-insurance.
There is no “best” way as we do not know our future needs but we can work from a plan and make sensible adjustments along the way.