So this came in my mail two weeks ago…

What exactly is CareShield Life?

It may sound like a type of nut, but it is our improved national long-term care insurance scheme that replaces the old version – ElderShield.

So why do we need long-term care insurance?

A study has found that Singaporeans are spending a bigger part of our lives in poor health compared to 30 years ago.

According to the Health Promotion Board, 1 in 4 Singaporeans aged 40 years and above has at least 1 chronic disease.

Families have generally become smaller too. This leads to a declining old-age support ratio – the number of working children to provide care for every elderly.

And depending on circumstances, long-term care could cost between $1,000 to $4,000 per month, for services such as home care, day care and nursing home.

This is where long-term care insurance comes in to alleviate the financial burden.

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?

Should I get Disability Income Insurance?

and ydisability

How would you get by if u lose your ability to work and earn a paycheck every month?

Financially speaking, working disability is worse than death. Our earning ability is our greatest asset and you are the golden goose that lay the golden eggs. Most insurance policies only pay when the golden goose drops dead or is critically ill, but this is not enough. What we need to do is to insure the golden goose’s “ability” to lay golden eggs.

But you may ask: I am already covered, right?

Some people may believe they are already covered for the risk of disability. Let’s look at the common misconceptions:

I have a policy that covers me for Total & Permanent Disablement (TPD)
This only covers very severe disability, such as losing a pair of limbs before your insurer pays you. What if a teacher loses her voice and has to quit teaching? This does not meet the definition of TPD, but is sufficient to trigger your disability income payouts till your desired retirement age.

I have a Critical Illness policy
Currently, critical illness insurance providers do not cover diabetes as one of the 37 critical illnesses. What if a pilot is grounded because his diabetic condition affects his vision? Critical illness policies work well to provide a lump sum to cover medical expenses. But it falls short of the real paycheck protection need.

I have personal accident coverage

The weekly income payable from personal accident plans is payable only if the cause of disability is accidental, defined as involuntary and violent. Working disability from illnesses is not covered.

My employer will pay me
Most employers define how long you will receive your salary if you are unable to work. In Singapore, this is often between 1 to 3 months, which will not be sufficient in the case of long-term working disability.

Therefore, it is crucial for all working adults to consider a Disability Income policy that provides for replacement of income in all scenarios of working disability. If a sickness or injury (of any severity) prevents you from working for at least 60 days, it can replace 75% of your earned income, by offering a tax-free cash benefit every month.

What Is A “Deductible” or “Excess”?

High-deductibles-II-resized-600.jpg

A deductible or excess is something you have on your policy when you have either, Hospital & Surgical coverage or Motor coverage. And its a dollar amount – it could be $500, $1000 or $3,000.

Quite simply put, the deductible is what you are responsible for, before the insurance company pays out anything on your behalf to fix your vehicle or seek medical treatment.

The lower your deductible, the higher your premium is going to be. Conversely, the higher the deductible you have, the lower your premium is going to be. 

Reason is this – you, the driver or the patient, are taking on more risk with a higher deductible. When you have a lower deductible, you are putting more risk on the insurance company. As a result, your premiums are effected in this way.