Importance of Medical Insurance for Permanent Residents (“PR”)
Ms Z, age 30, Forwarding Officer
Took up Permanent Residency in 2013
In Singapore, we have the CPF system which provides for a variety of our basic financial needs including retirement, property and medical. When someone becomes a permanent resident, he or she “plugs” into the CPF system and is able to access insurance plans that can be funded using the CPF medisave account.
One of the challenges is to set up the financial plans in a complementary way between what was already done and the new plans available as a permanent resident or citizen.
Medical insurance is a basic protection necessity for anyone planning for the long term. The common question is will Medishield alone be sufficient or should one upgrade to a more comprehensive plan. Ms Z’s story might provide some clues.
I was introduced to Ms Z by a client to help her through the transition on financial planning matters. She had just received her PR status and was eager to know what was available to her now that she has started receiving her CPF contributions.
We went through the consolidation of her financial plans and realised that she only had 1 Personal Accident Plan. The other “insurance” plans she had were really endowment plans for the purpose of savings.
As we reviewed her financial needs, she understood that her first step was hospitalisation and protection planning as she has decided to settle down in Singapore. Also, she wanted to save towards having sufficient emergency or “rainy day” fund.
When we discussed her medical insurance preferences, Miss Z mentioned that she do not wish to fork out any money if she was hospitalised. She was also concerned about long waiting time should emergency occurs. Thus, she decided to purchase a hospitalisation plan that covers up to private hospitals including additional riders (i.e. add-ons) that covered all the potential co-payments. The premiums were funded partly from CPF medisave account.
This is what is known as “Medisave approved Integrated Shield Plan”.
About one and a half years later, I received a call from Miss Z. She told me that she consulted a specialist doctor and was scheduled for a lump removal in the uterus. At that point, Miss Z was very concerned.
“Confirm I can go to any hospital right?”
“You very sure my hospitalisation bills can cover all right?” **
These were her exact questions to me over the phone. After verifying, I assured her that the surgery is covered under the policy and told her to seek the best medical advice and do what is necessary to get well.
The estimated bill size for the surgery was $12,000 and she would need to pay a deposit of $2000 first. As Miss Z had already set aside rainy day funds, the deposit was not an issue. At that point in time, all she wanted was for the surgery to be done as soon as possible.
With the reassurance, Miss Z went for her surgery in Parkway East Hospital with a peace of mind.
Ms Z had the surgery done, followed up with the doctor for post-surgery reviews and has been given the green light to resume her life normally and without worries.
Here is a summary of the total successful claims made:
$14,848.26 was paid out for her hospitalisation and surgical bills
$858.10 was paid out for her specialist consultation and pre & post treatments.
Total claim amount of $15,706.36.
To date, Ms Z’s premiums paid for the insurance totalled $1939.91.
GEN Planner’s Thoughts:
When one decides to settle down into a new country, there are many things to prepare. Most if not all will require money. In Singapore, medical bills can be quite substantial if one is uninsured. It is certainly not an item that can be easily budgeted for and the better way is to transfer the risk to insurance companies using insurance.
If Ms Z was a foreigner working in Singapore, she would not have been able to purchase a comprehensive medical plan at an affordable budget. She maximised the use of her CPF to put in place a comprehensive medical plan that served her well within 2 years of starting the plan.
I wanted to share her story because it serves as a very useful reminder about planning. Many times, it’s not about a spending a lot of premium dollars but rather being smart with what is available and working within an affordable budget. Of course, being willing to take responsibility and plan early is just as important as well.
What Ms Z have done is not difficult and the premiums are very affordable yet this simple hospitalisation planning is sometimes neglected due to ignorance or procrastination.
The best preparation for tomorrow is doing your best today.
Story by Yan Kai Yun, ChFC
** If you are eligible for Electronic Letter of Guarantee (eLOG) at participating hospitals, no upfront hospital payment or deposit is required up to $10,000. Otherwise, the hospitals may still request client to pay a deposit or full payment upon admission or discharge. Any amount payable will be refunded by the hospital to you after the insurance company has fully completed the claims assessment process. Further LOG exceeding $10,000 is subject to further approval by requesting through the hospital.
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