How can we cope with the rising premiums and changes?
Here are some points to consider in your IPs:
1. What is your choice of care?
Average bill size of private hospitals is about 3 times of that of public hospitals and is increasing more than 2 times faster than public hospitals. Premiums of IPs with entitlement to private hospitals will have a tendency to increase more than premiums of IPs with entitlement to public hospitals only. A person who is only looking at a choice of care in a public hospital, do not need to cover up to private hospitals in an IP. This can keep the premiums more manageable.
2. What if I would like to have entitlement to private care too?
People choose private doctors and hospitals over public hospitals for different reasons. Just like how a couple decides on a private gynaecologist versus a gynaecologist in a public hospital or a patient visiting a General Practitioner (GPs) versus visiting the polyclinic. Some of the reasons include convenience, preferred specialist, waiting time, friend’s recommendation etc.
While premium is a consideration in deciding which type of IP to go for, the choice of care is important too. A person, who wants to have entitlement in a private hospital and still keep the premiums affordable, can include some deductible / more co-payment in their IPs and this will vary from insurers to insurers.
3. Complementing with life insurance
Life insurance uses a different concept. Compared to IPs, the premiums of life insurance do not change once the plan is incepted, based on entry age. If a person is covered for $100k in a life insurance, the potential liability of the insurer to the policy holder is capped at $100k. In an IP, the potential liability to the insurer is “As charged” (up to the policy year limit of the IP) and the insurer is still subjected to renew the policy next year.
Because of the different nature in plans, IPs will have a trend of rising premiums and having the policies changing from time to time. A person, who wishes to keep the premiums more affordable in the long term and during retirement years, can consider complementing life insurances with their existing IPs. This will create a hybrid of fixed premiums in the midst of rising premiums in IPs.