Long Term Visit Pass Holders – What type of insurance is suitable?
Me: So your mother is coming over from Malaysia to help take care of your child?
Client: Yeah. Infant care in this area is full! If not, there is no one else to help us look after him. Thankfully, I managed to successfully apply for a Long Term Visit Pass for her from ICA.
Me: Oh great. With that you can go and work with a peace of mind.
Client: Actually I have another concern. What will happen if my mother falls sick and needs to be admitted to a hospital? She doesn’t have any insurance coverage over here.
Me: Don’t worry about that. Let me share with you the planning that can ease your concern.
This conversation is not a unique one-off discussion. Over the past year, I’ve had 5 such conversations with clients and each are justifiably happy and concerned at the same time. They are happy to be able to have family support at a time when their children are young yet at the same time, concerned because their parents are uninsured while they are here for the foreseeable future.
What is a Long-Term Visit Pass (LTVP)?
A Long-Term Visit Pass (“LTVP”) allows a foreigner to have a long term stay in Singapore.
Foreigners may apply for LTVP under one of the following schemes:
- Visitor whose spouse is a Singapore Citizen.
- Visitor whose spouse is a Singapore Permanent Resident.
- Visitor (below 21 years old) whose parent is a Singapore Citizen or Singapore Permanent Resident.
- Visitor whose child (above the age of 21) is a Singapore Citizen or Singapore Permanent Resident.
- Visitors who are students of institute of higher learning seeking employment in Singapore.
- Female visitor whose child/grandchild is studying in Singapore on a student’s pass.
- Visitor seeking permission to deliver a child in Singapore.
Many people with Long Term Visit Pass have good reasons to stay in Singapore and generally, they intend to stay for at least a few years. At the same time, the insurance that they have may not provide coverage for their stay in Singapore. Without this risk management planning, they can be vulnerable to a financial disaster if they were to fall sick and needs to be hospitalised.
While LTVP holders do not enjoy MediShield Life insurance coverage or receive the same level of government subsidies that Singaporeans and Permanent Residents are entitled to, they are still subjected to the same health risks and this can be a real concern for LTVP holders and their family members. Fortunately, there are certain insurance plans that covers people on LTVP and in some cases, can be funded from CPF savings of their family members who are Singaporeans or Permanent Residents.
If you have family members who are on LTVP and you are concerned about their financial well-being when it comes to financial protection against potential medical bills, read on for some ideas on how to plan for your loved ones.
Here are 3 types of insurance that you can consider when planning for your loved ones who are on Long-Term Visit Pass.
1. Hospitalisation Protection Plan
We all understand that getting medical attention and being hospitalised as a foreigner is not going to be easy on the wallet. The option of being covered with an international health insurance plan may cost a bomb and be an overkill.
One little known option is that LTVP holders can be covered under the CPF Integrated Plans and have a portion or all of the premium paid for using the CPF savings of a family member. This may be a cost effective way to have comprehensive hospitalisation insurance coverage.
Did you know?
LTVP+ holders are eligible for healthcare subsidies for inpatient services only at Restructured Hospitals and institutions (RHIs). The levels of inpatient subsidy will depend on the choice of ward class, and will be similar to the corresponding subsidy levels for Permanent Resident (PR) patients. LTVP+ holders are, however, not eligible for subsidies for day surgery, specialist outpatient clinics (SOCs) and polyclinics services.
2. Personal Accident Plan
Accidents can happen to anyone at any time. LTVP holders are able to be covered with a personal accident plan if they are concerned about medical bills arising from accidents. In my opinion, a comprehensive accident plan should provide benefits beyond accidental death and permanent disability benefits. It should also provide insurance benefits for reimbursement of medical treatment due to accident, Traditional Chinese Medicine treatment (TCM) and other “accident” events such as food poisoning and dengue fever.
A personal accident plan can serve as a good compliment to an exisiting hospitalisation plan to cover outpatient treatments arising from accidents.
3. Critical Illness Protection Plan
Critical illness is one of the major concerns that many of my clients have. We can all understand the financial impact that a stroke or cancer can have on someone. Medical bills, loss of income and the need for having a full time care taker are some of the consequences that a critical illness can bring.
There are many types of plan that covers critical illness such as Whole Life insurance (with critical illness rider attached), Term insurance (with critical illness rider attached) or Standalone critical illness policies.
Here are a few questions that can help you to decide on what type of plan is more suitable:
1. How long do I intend to be covered? If the period is short, a term policy may be more suitable.
2. What type of protection do I need? If there is a preference for comprehensive coverage, consider a plan that covers early stage critical illnesses.
3. Am I going to stay in Singapore in the near future? If there is an intention to stay for the long term, a whole-life plan may be considered.
Is this what you have been hearing from….somewhere or someone?
Often there are people who mentioned that foreigners cannot buy life insurance in Singapore. That is not necessarily true as there are plans that are available in the market that are meant for those who are residing in Singapore on valid passes, even if they are foreigners.
However, there are qualifying criteria to be met in order to purchase the plan. An example is that the passes need to have at least 6 months validity. In some cases, the type of passes will also have an implication on what type of plans are eligible for the applicants.
Your first step is crucial in ensuring everyone have a peace of mind!
Imagine for a moment that you have a family member who have a medical condition that requires immediate medical attention and any delay can be life threatening. Your choice is to arrange for immediate medical treatment and prepare to pay for a large hospitalisation bill or risk delaying medical intervention by arranging for the family member to be sent back to the home country for medical treatment and have the bill covered by insurance. It is a difficult choice to make as we want the very best for the family member yet we may not always be financially able to ensure that it can happen.
You can avoid making this catch-22 choice by planning in advance. While it is difficult to predict the future to foresee which of the 3 types insurance mentioned above will be more important, I will suggest that generally speaking, hospitalisation insurance should be addressed first.
When it comes to getting hospitalisation coverage, using CPF Integrated Plans is one of the most cost effective way to get cover. You can download this “Guide to Hospitalisation Plan for LTVP Holders” to help you understand better the premium range, withdrawal limits and cash outlay for LTVP holders to help you get started.
(NOTE: Get our Guide to Hospitalisation Plan for LTVP Holders to help you understand better the premium range, withdrawal limits and cash outlay for LTVP holders to help you get started. Get your copy here)
It is as much about them as it is about you
Making sure that the people around you is properly insured is not just for their protection, it is also for your own financial protection. The loss of health of a family member will likely result in a direct impact on your day to day activities and having insurance plans properly set up will at the very least reduce the financial impact.
A final tip…have a conversation with the family member who is here on LTVP to see if indeed they are concerned about being properly insured. Getting them involved in the process early will make the whole planning process more pleasurable for all involved.
Have fun planning for your risk management!
Article by Andy Wu