Protecting what’s yours: Take cover with health insurance
How much do I need? Is there an age limit? How do I prevent duplicate coverage? These questions and more will be answered.
Health insurance is something we don’t really think about very much especially when we are in the pink of health. But what happens when you become a victim of an unexpected misfortune like critical illness? Or even meet with an accident?
Life as we know it is filled with uncertainties and we should never take it for granted – having adequate health insurance would give us and our family protection against the financial losses that we could suffer in the event of an accident, illness or even disability. In addition, health insurance can provide you income during your hospitalisation or disability, or cover the cost of your medical treatment or nursing care.
But often, we find it a challenge to understand which health insurance plan is the most appropriate for us: One that meets our needs and provides us enough health insurance cover. We explore some questions you may have before making a purchase decision:
1. How much health insurance do I need?
Yes, it’s true that healthcare costs are constantly on the rise – all the more reason for us to be covered with health insurance. We definitely don’t want to risk being inadequately insured and end up wiping out a portion of our savings to pay for medical expenses. To help you understand the amount of health insurance you may need, here are some things you should bear in mind:
- The quality of healthcare service and the level of income protection that you want if you fall ill or become disabled.
- The amount your dependents – for instance your spouse or children – would require for their daily needs, if you were unable to provide income for them over an extended period of time.
2. How can I ensure that my health insurance policy works to my best advantage?
To get the best out of your policy, you should always do some research on the different types of hospitals. The cost of healthcare differs substantially between the private and public hospitals. Here are some guidelines:
- Get information on the ward charges.
- Find out the costs of related medical treatment.
- Check if the benefits under your health insurance will cover all the costs.
- Consider all available options.
- Choose your ward or treatment that is within your financial means.
3. How can I ensure that my health insurance policy covers me for an illness or disability that strikes?
As a client, it is important that you provide true information to your financial adviser when buying a health insurance policy. This ensures that the policy you purchase actually provides you adequate cover. Detailed information such as your age, occupation and any history of illnesses, medical conditions or disabilities must be disclosed. In addition, all health insurance policies do carry some exclusions, setting out the circumstances under which benefits will not be paid.
(Exclusions in policy – The most common exclusion in health insurance products is the “pre-existing condition”, which means that any illness or disability that you had at the time of purchase will not be covered. Exclusions do vary from product to product, so you must read the policy contract carefully to find out exactly what you are covered for or not covered.)
4. How do I prevent duplicate coverage?
It is prudent for one to be covered by a comprehensive health insurance plan but what happens when we find that our existing insurance plan does not cover all grounds? Often, we may think about buying another policy or even switch to another policy to ensure that we have sufficient coverage. Nonetheless, before you make any decision to purchase another health insurance policy, here are two very important factors that you should take note:
- Multiple medical expense policies
As the total reimbursement from all your plans is limited by the expenses you have actually incurred, it means that even if you buy additional medical insurance plans, it may not provide you with extra benefits. Hence, it’s important to check with your financial adviser if you are unsure.
- Switching between health insurance products
It is generally not advisable to switch between health insurance policies as the new policy will not cover any illness or disability you already have at the time of purchase. A common exclusion known as the “pre-existing condition” exclusion is found in most health insurance policies. Thus, you will not be able to make claims on the new policy for medical conditions that developed after you took up your original health insurance policy. Your original policy would have covered and paid on your claim.
5. Is there an age limit for taking up health insurance coverage?
Most health insurance policies are not available to people over a certain age. Although the entry age limit varies from insurer to insurer – generally ranging between 65 and 75 years old – it is often emphasised that we should buy health insurance whilst we are still young. The reason being: We are generally in a better state of health as the probability of developing an illness or disease increases with age. Thus, it is advisable that you purchase health insurance coverage early and enjoy the benefits of the policies.
(NOTE: The information in this article is of a general nature and may not apply to every situation or to your own personal circumstances. This article should not be regarded as a substitute for seeking legal advice on any specific issue. Consumers are advised to always seek the advice of their financial adviser when in doubt.)
This article was written by the Life Insurance Association. For more information on life insurance or the Life Insurance Association, visit www.lia.org.sg.
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