12 Questions to Ask when Reviewing Your Life Insurance Coverage

Policy review

I recently came across an article about an expectant mum who found out she had stage 4 cancer at age 33. Feeling the unpredictability of life, I’m compelled to write this piece.

Reviewing your life insurance coverage is a crucial part of financial planning and there are some key questions to ask to ensure you still have the right policy in place at the right cost.

Getting started: what you need

  • A copy of your original life insurance policy illustration
  • Summary of the policy features and benefits

Your current policy and circumstances

  1. Is my life insurance policy still in force?
  2. What type of policy is it? For example, term insurance or whole life insurance
  3. Have my needs changed?
  4. Is this still the right type of policy for my needs?
  5. Do I need more or less life insurance cover than I currently have?
  6. Can I still afford the premiums?
  7. If I need to increase my cover, has my health deteriorated or am I leading a healthier lifestyle that could mean better pricing for increased cover I may want?

Beneficiaries of your life insurance policy

  1. Who are your named primary beneficiaries?
  2. Are your name primary beneficiaries still those you would like to benefit from the proceeds of your policy?

Policy features and benefits

  1. Does my policy have any guarantees? If so, what are they? Are they still beneficial to me?
  2. Are there any ‘policy review’ points that I can benefit from? E.g. ability to increase the cover without further medical underwriting.
  3. Can I borrow against the cash value of my policy from the insurance company? If so, do you want to take advantage of this feature?
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Importance of Overseas Medical Coverage

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There is an essential aspect of Medical Insurance which some of you may not know – having overseas coverage. To illustrate the importance of it, below is the story of my colleagues’ client.

She is a 9 years old girl, who was diagnosed with Brain Cancer in 2014. After 2 weeks of treatment, her doctors gave up as the healthcare industry in Singapore does not have the necessary type of cancer treatment – Proton Chemotherapy.

Her parents sought advice from her doctors as to where their daughter could go internationally, in order to undergo Proton Chemotherapy. Doctors told them the nearest country with this treatment is South Korea, which is also the cheapest. Although she was unable to walk and had to move around in a wheelchair, the girl’s parents decided to bring her to South Korea.

After the treatment was done, she responded well and returned to Singapore, able to walk again. After follow-up Chemotherapy in Singapore, her cancer is now in remission.

Her parents and financial planner filed a claim for the medical bills incurred in South Korea, amounting to $110,000. Thankfully, their insurer paid for it, as the girl’s Hospital & Surgical plan covers overseas hospitalisation and treatment costs.

Many of us may feel that since Singapore is a very developed country, we should have all forms of healthcare. But this little girl’s story shows us that the opposite is true.

There are definitely more cases of patients being advised to seek treatment outside Singapore. So do check if your Hospital & Surgical Plan covers you for overseas treatment.

FAQs on MediShield Life and Private Integrated Shield Plans

MediShield Life (MSHL) has replaced MediShield as of 1 Nov 2015. Like MediShield, MSHL is targeted at Class B2 and C wards coverage but it provides better protection such as:

  • Higher inpatient/day surgery/outpatient cancer treatment limits
  • Higher annual claim limits
  • No lifetime limit
  • Lower co-insurance payable

This brings several questions for people who are already insured with a Private Integrated Shield Plan (IP). Below are some of the questions I have encountered and my answers to each.

If I have an IP plan and MediShield Life, does that mean I am paying for two policies?

MediShield Life is the foundation on which IP plans are built. There is only one plan and there is no duplication of coverage or payment of premiums. If you have an IP plan, you will pay one single premium directly to your private insurer. The MediShield Life portion will be sorted out at the back-end between your insurer and the CPF Board.

How much can I claim under MSHL and how much under my private IP plan?

You can submit your claim to your private insurer. The part of the claim that MSHL can cover will be provided by the CPF Board to your insurer. Your private insurer will then provide the entire payout to you.

How is my IP premium affected?

The MediShield Life portion of your IP premium has increased from what it used to be under MediShield, but is fully payable by Medisave. The additional private insurance portion of IP premiums is payable by Medisave, up to an Additional Withdrawal Limit.

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Additionally, all 5 IP insurers have committed to not changing the additional private insurance coverage component of premiums for IPs in the first year after the launch of MSHL.

You may be eligible for certain premium subsidies. To understand which subsidies you are entitled to and how they work, there is more information on MOH’s website.

What is the Additional Withdrawal Limit (AWL) for my age group?

Here’s the respective AWLs for each age group:

Age Next Birthday 1 to 40: AWL of $300

Age Next Birthday 41 to 70: AWL of $600

Age Next Birthday 71 and above: AWL of $900