What Do You Think?


No loadings on Income’s health insurance

Portable scheme continues the full health insurance protection even after leaving employment.

Wed, Nov 18, 2009
The Straits Times

I REFER to Mr Kaliannan Tamilselvam’s letter last Friday, ‘End exclusion penalty’.

He wrote that he underwent an angioplasty procedure while working for a company which covered him under an Aviva group health-care scheme. After he left the company, he was rejected by his former employer’s insurer when he wanted to continue with the health insurance coverage.

He also wrote that he subsequently tried to get health insurance under NTUC Income, but was quoted a premium which was too high. We have contacted him to clarify that he had applied for life insurance and not health insurance.

For life insurance, a higher premium (or loading) was quoted in view of his pre-existing medical condition and previous medical procedures. NTUC Income’s health insurance premium rates are uniform across age bands. While we may impose exclusions, we do not impose loadings for our IncomeShield health insurance plans.

Mr Tamilselvam’s situation could have been avoided if he had been covered under a portable medical benefits scheme when he was with his previous company. A portable medical benefits scheme such as NTUC Income’s Portable Group IncomeShield is designed to address the need for employees to continue to enjoy full health insurance protection even after they leave their employment for any reason. The premiums for these portable medical schemes can be partially or fully funded by employers.

As a social enterprise, NTUC Income’s aim is to make essential insurance such as health insurance accessible, affordable and sustainable for all. Thus we have strongly advocated the benefits of portable medical schemes, which largely address the limitations of traditional group hospital and surgical insurance plans.

Lee How Teck (Ms)
Senior Vice-President & General Manager
Group & Health Insurance
NTUC Income

This article was first published in The Straits Times.


Some points to note based on the above

(Disclaimer/Note: The following are solely MY opinons based on my experiences and information as a financial industry practitioner. It DOES NOT constitue any form of impiled direct advise or product recommendation.)

*  Said person is confused between Health Insurance (covering hospitalization, outpatient etc.) and Life Insurance (covering Death, Disability, Critical Illnesses etc.). The impression that I have gotten is that said person doesn’t seem to know what he/she is applying for and quick to make a judgement when something happens.

*  Application for ANY form of Life & Health Insurance is subject to underwriting (aka screening of medical conditions by the insurance company) as insurance operates on the principal of risk pooling/sharing. Policy terms and conditions typically exclude PRE-EXISITING CONDITIONS (i.e. medical conditions – minor/major that you are currently seeking follow-up treatment/medication for).

*  Income is correct in saying that their Health / Medical Insurance plans – specifically Incomeshield DO NOT impose premium loadings. However exclusions could apply based on the health declaration and status at the point of application. This adheres to the principle of risk sharing and pooling and anti-selection (unfortunately, I will not go into the bore you to tears story of how it works A-Z and why the addition of not so healthy people in the pool will increase claims and premiums consequently).

*  The key point here is not so much on why did the employer not get a portable coverage. The problem with many (based on my experiences and with NO intention/purpose to single out any one in particular) is that they seem to think that company coverage is a god-given and more than sufficient for them not to spend additional $$ on something as essential as a basic Private Shield Plan. Inertia at work! Problems will come when individual final decides to get it but gets frustrated and upset with the insurer to due unfavourable underwriting (as a result of pre-existing medical conditions developed). Furthermore, it is really a joke when a particular self-proclaimed activist/guru claims that basic Medishield is more than sufficient (*sacarcsm intended*).

*  And as a note, basic Medishield has capped limits, and is mainly for B2 class and below. So if you desire better coverage i.e. B1 and above – basic Medishield will never be good enough. I have the examples to back up my statement.

*  To add on, once no coverage can be obtained on standard terms, some tend to get upset/frustrated/angry with the insurer, thus do not wish to take up the cover.  Within this group of people, there are bound to be ‘black sheeps’ who start to bad-mouth/spread negativity about insurance as a risk management instrument. Where in the very 1st place, given such an experience, logically speaking, shouldn’t they realise the importance and the significance of getting a good coverage even more! Very often, these are the people who have procrastinated for a long time! (The procrastination could be due to a variety of reasons).

*  Procrastination and ignorance is not an excuse when the fact is that you had a chance/opportunity to make a responsible choice when you are perfectly healthy. Why wait until when something happens then start to blame the whole world except yourself! It is all about taking responsibility for your choices/decisions as versus to playing the blame game!

* I have received some comments and ‘feedback’ that financial planning should be about making $$ (in this context, what the prospect/suspect really means is that the financial adviser should be making investment profits for them and not telling them to go into instruments that is not designed to make $$ i.e. insurance would fall under this fallacy). Typical example of inertia/ignorance aside, what instrument can protect your income in the event of any unexpected event that affects/incapitates your ability to earn that income? No point talking about the latest sure to make money trading system etc. when an unexpected event can possibly wipe out your savings.

*  I believe after reading this forum letter, many should realise that it is simply not wise to rely on company to cover you (just because you don’t have to pay a cent). Do not be penny-wise and pound foolish.

Hence in our financial plan, we need BOTH a SHIELD and a SWORD! 🙂

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