Ensuring you have sufficient protection in the event of a health scare is a key aspect of financial security, but how do you know what you really need? Here’s a crash course on the 4 common types of health insurance, and what they cover.
If you are looking for protection from large hospitalisation bills and costly outpatient treatments, health insurance is what you need. Depending on the level of coverage, it helps to reduce the amount of cash you need to fork out for hospital and surgical expenses.
An example of a basic health insurance plan is MediShield Life, which covers all Singapore Citizens and PRs, regardless of age and pre-existing conditions. MediShield Life is designed to provide sufficient coverage for subsidised treatment in the public hospitals. MediShield Life premiums can be fully paid for by Medisave.
If you would like to have additional insurance to cover costs associated with treatments in private ward types, you can consider buying an Integrated Shield Plan. However, please note that premiums for Integrated Shield Plans will cost more than MediShield Life, and may not be fully paid for using Medisave.
Critical illness insurance
Treatments for major illnesses, such as cancer, often cost a significant amount of money. If you want to receive a lump sum to help you to pay for such expenses in the event you are diagnosed with these major illnesses, you should get yourself a critical illness policy.
One important point to note is that insurers may have different definitions of critical illness, so you will need to examine your policy thoroughly to be certain of what is covered.
Disability income insurance
An accident or sudden onset of an illness could result in disability and leave you unable to work. If you want to ease the financial impact from the loss of income in such an event, you may wish to consider disability income insurance.
This type of insurance may be more applicable for sole breadwinners or major contributors to their household income. It usually pays a fixed amount each month, for up to 5 or 10 years or until you are 60 or 65 years old.
Long-term care insurance
Severe disability may happen unexpectedly, especially in old age. The severity and length of disability, as well as the cost of care are also highly uncertain. If you want to receive financial support should you be unable to look after yourself, you should ensure you have long-term care insurance coverage.
CPF members with a Medisave Account will be automatically enrolled in ElderShield at the age of 40, ElderShield is a basic long-term care insurance scheme that provides a monthly cash payout in the event of severe disability. If you wish to receive higher payouts than what ElderShield offers or protect yourself against moderate disability, you may consider getting ElderShield Supplements on top of your ElderShield coverage.
Information accurate as at 8/8/2017.
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