Health insurance. Most of us neglect it, yet it is highly important. Medical bills can be very costly if you don’t take out the proper medical insurance. Therefore, it is critical to understand the different types of health insurance in Singapore that you should get. This is especially important when we’re young, as insurance premiums would shoot up as we age.
This article will set out the 5 different types of health insurance that you should know about. To provide background, this article also provides a general overview of medical insurance in Singapore.
Through this, you can know the types of health insurance in Singapore that ease your financial burden during illness.
There are essentially five different types of health insurance in Singapore, namely medical expense insurance, income insurance, term care insurance, hospital care insurance and insurance coverage for critical illness.
1. Medical Expense Insurance
One of the most important types of health insurance in Singapore is medical expense insurance. As the name suggests, “medical expense insurance” covers medical expenses incurred from sickness or injury.
Who is this type of health insurance relevant to?
Firstly, anyone who doesn’t want to rely on their savings for medical expenses. Additionally, this insurance applies to individuals who do not have the benefit of healthcare support from their employers.
The MediShield Life scheme dates back to 2015. It aims to provides basic health insurance for all Singaporeans and PRs.
The current MediShield Life protects its policyholders for life and provides them with high payouts.
You also need not apply for this scheme. The CPF Board automatically enrols you in it if you are a Singaporean Citizen or PR. Unlike the previous MediShield programme, the current MediShield Life does not give you the choice of opting out.
What exactly does MediShield Life cover?
MediShield Life pays for your hospital bills such as hospital stays in hospital wards. However, MediShield Life only covers hospital stays in subsidised B2 and C wards in public hospitals.
Therefore, for those wanting to stay in private hospitals or public Class A or B1 wards, your MediShield Life coverage will probably not be enough. To fully cover your medical bills, you would have to fork out the remaining amount from cash or Medisave.
MediShield Life medical insurance also covers certain costly medical treatments such as chemotherapy for cancer and kidney dialysis.
MediShield Life Premiums
You can pay for your MediShield Life premiums using money from your Medisave. You will be prompted to top up your Medisave account if you don’t have sufficient funds in your Medisave.
Alternatively, you can turn to your immediate family members such as parents or spouse for help. They can support your MediShield payments with their own Medisave.
Integrated Shield Plan
MediShield Life medical insurance does not cover Class B1 hospital wards and upwards.
Nevertheless, you can take out an Integrated Shield Plan for additional coverage. This Integrated Shield Plan would comprise of both MediShield Life as well as additional private insurance. There are also a variety of Integrated Shield Plans to choose from.
When should you take out an Integrated Shield Plan?
You can consider the Integrated Shield Plan if you wish to stay in private hospitals or Class A and B1 wards in public hospitals. Under this arrangement, you would have to engage a private insurer. This insurer then provides you with the additional coverage that you require.
Higher Premiums under Integrated Shield Plan
Of course, with great coverage comes great premiums. With the Integrated Shield Plan, you would be paying higher premiums than if you only had MediShield Life.
Fortunately, you can also use your Medisave to pay for the premiums under the Integrated Shield Plan. However, such premiums should not exceed the Additional Withdrawal Limits for your Medisave account. If not, you would have to top up the difference using cash.
The Additional Withdrawal Limits (from 1 Nov 2015) are:
Age Additional Withdrawal Limit
S$300 Next birthday at 40 years and below
S$600 Next birthday at 41 to 70 years
S$900 Next birthday at 71 years and above
This means that as you grow older, you can use more of your Medisave to cover your additional private insurance.
2. Income Insurance
Disability income insurance is another type of health insurance in Singapore that you need to consider.
This provides you with a part of your monthly income in the event that you experience a disability that affects your ability to work. This is especially important if you are the sole breadwinner whom your family depends on.
However, disability income insurance can’t replace the entire income you earned before your disability. It is merely a supplement to your savings and typically pays up to 80% of your average monthly salary.
In Singapore, we have a national disability income insurance scheme called Eldershield. This covers you as long as you are a Singapore Citizen or PR above the age of 40.
Eldershield operates on an opt-out basis. You are automatically admitted into the scheme if you do not indicate otherwise. Under Eldershield, you receive coverage from either Aviva, Great Eastern Life or NTUC Income. These are the private insurers appointed by the Ministry of Health that run the Eldershield scheme.
You receive Eldershield payouts if you can’t complete 3 of the 6 daily living activities below:
Type of activity Details of activity
Washing The ability to wash in the bath or shower (including getting into and out of the bath or shower) or wash by other means.
Dressing The ability to put on, take off, secure and unfasten all garments and, as appropriate, any braces, artificial limbs or other surgical or medical appliances.
Feeding The ability to feed oneself food after it has been prepared and made available.
Toileting The ability to use the lavatory or manage bowel and bladder function through the use of protective undergarments or surgical appliances if appropriate.
Mobility The ability to move indoors from room to room on level surfaces.
Transferring The ability to move from a bed to an upright chair or wheelchair, and vice versa.
Source: Ministry of Health website
Under Eldershield you can expect to receive payouts of up to S$400 per month. This payout period lasts for up to six years or 72 months.
Another good thing about Eldershield is its length of coverage. In fact, it covers you even after you’ve stopped paying premiums at the age of 65! Thus, you are protected even if you develop a disability in the later years of your life.
3. Term Care Insurance
Long-term care insurance aims to help you receive the care you need as you age.
This type of health insurance in Singapore provides you with a monthly payment for long-term nursing care.
Despite ElderShield providing a monthly payout in the event of disability, this could be insufficient for your long-term care. This is because nursing homes and specialised hospitals charge expensive rates of upwards of a few thousand every month.
You can take up ElderShield supplements or add-ons to boost your monthly payouts and extend the payout period.
In this regard, you can choose from three ElderShield supplement policies provided by the approved private insurance providers. They include NTUC PrimeShield, Aviva MyCare and Great Eastern ElderShield Comprehensive.
From the year 2020 onwards, CareShield scheme takes over the ElderShield scheme. The CareShield program would provide higher payouts that increase over time with no cap on payout duration.
This may reduce the need for add-ons such as the ElderShield supplements. Additionally, this will provide individuals with enhanced protection against long-term care costs.
4. Hospital Cash Insurance
One of the key types of health insurance in Singapore is hospital cash insurance.
As an employee, you probably worry less about your income during hospitalisation. Most companies would provide paid hospitalisation leave. You just have to furnish the required medical proof.
However, it’s different if you are self-employed or working as an insurance or real estate agent. This is where hospital cash insurance becomes more imperative.
With hospital cash insurance, you can claim money for every day of your hospitalisation for medical treatment or surgery. Nonetheless, this payout varies. For example, you can obtain a higher payout if you were hospitalised overseas or warded in the Intensive Care Unit.
Incredibly, this insurance gives you cash on top of your benefits under MediShield Life or the Integrated Shield Plan. Thus, hospital cash insurance is one of the types of health insurance in Singapore that you should consider getting.
5. Critical Illness Insurance
You’re a hardworking professional in your 30s. Suddenly and unexpectedly, you experience a severe stroke that leaves you paralysed on one side of the body. What then happens, especially if you’ve responsibilities to your family?
Moreover, you now face a long and arduous road to recovery that further takes a toll on your family.
So how do you protect yourself and your family if something like that happens to you?
The answer may very well lie with the following type of medical insurance – critical illness insurance. The insurance kicks in two main situations. Firstly, if you get diagnosed with a critical illness. Alternatively, it commences after you undertake a type of surgery covered by the policy. This entitles you to an upfront lump sum payout, thereby easing your financial burden in cases of critical illness.
Many critical illness insurance policies would pay you 100% of the sum assured upon your diagnosis of a critical illness. For instance, if your sum assured is $250,000, this full amount will be provided to help you through your critical illness.
With this lump sum amount, you and your family can now have some cash at hand to deal with the medical expenses that will arise. The ability to relieve your financial burden shows why critical illness insurance is one type of health insurance in Singapore.
Conditions Covered by Critical Illness Insurance
You must be wondering, “what qualifies as a critical illness?”
Critical illness insurance would generally cover include major cancers, stroke, bypass surgery, kidney failure and heart attacks. However, there are differences in coverage, depending on the policy you sign up for. Thus, you would have to make more inquiries online as well as with your agent to find out more.
We cannot predict what will happen to us in the future.
As much as we like to think we are invincible, that is far from the truth. Sometimes, unexpected medical issues crop up that throw our life into disarray.
Therefore, it is crucial that we know the different types of health insurance in Singapore. This will enable us to know which types of medical insurance would best suit our needs so that we can take out the appropriate insurance policies to protect us and our loved ones.
For more on insurance and money matters, you can check out our other finance tips and articles.