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.

Why We Shouldn’t be Bothered with Fear-Mongers

bad-economic-headlinesThere is much fearmongering in the different media which we are exposed to everyday. Take a look at the money section of any website, newspaper or magazine and you will find stories warning you about the Chinese economy, the Federal Reserve’s interest rate policies, the impact of the U.S. presidential election, global oil markets and market volatility.

But none of these stories—while interesting to read and think about—is worthy of spending too much of your brainpower.

Why? Because these big global factors are beyond your control and will be resolved without the slightest help from you.

You cannot control how the S&P 500 will perform or whether the European region will restart pumping profits. History has shown us that there are times when the U.S. markets outperform foreign markets and when the opposite is true. This is also true when it comes to growth stocks, value stocks, small and large companies. There is no way to successfully or consistently predict what will happen next.

So why do we bother?

Psychologists call it the “illusion of control“. Our intellectual minds tell us we can figure it out, even when—trust me—we can’t!

Putting your precious time into what you CAN control is really the only sensible way to go.

Here are six actions where focusing your energies in will reap you rewards:

  1. Develop rational goals built on your values. Let’s face it, without a real plan, you have decided to drift and hope for the best.
  1. Consider possible life transitions and how they might impact your actions. Transitions rarely give notice, so considering the impact of possibilities allows you to put solutions in place.
  1. Build agreement with other stakeholders (your spouse, a partner) on strategies to reach your goals. With all parties working toward the same goals, you’re more likely to be working for each other and get things accomplished.
  1. Invest time and resources to work with professionals who can help move your goals forward. Whether it’s creating a retirement plan or a proper risk management plan, you’ll benefit from working with experienced experts.
  1. Know your financial numbers and assign priorities for savings, accumulation and spending. Consider a rating system from 1 to 5, where you assign a point system to where your paycheck and resources go.
  1. Understand more about the “whys” of your life. Our beliefs don’t just arrive in our thinking like a magician’s trick. On the contrary, your money beliefs—your mindset—come from your money history over the course of your life. And it’s that mindset that determines what you consider the norm. Taking the time to understand whether your beliefs support your values is always time well spent.

These actions are very specific to you—you make the choices, decisions and actions that will support the outcomes you desire.

Devoting time to the economic issues of China or whether equity markets will rise or fall is beyond your ability to control and will only divert your attention from what really impacts your life.

A Quick Guide To Retirement Planning

Many people work their entire lives with one goal in mind – retirement. It’s one of the most important life events that is experienced by most people.
From a personal and financial perspective, achieving an easy, well-funded retirement is a lifelong process that requires early planning and commitment to a long-term goal. Once you reach retirement age, you can then enjoy the benefits of a comfortable retirement in which you have more than enough money to cover your living costs.

Managing Your Retirement

When it comes to retirement planning, the earlier you can start in your career, the better off you will be.

The problem, however, is that most young people are not thinking about retirement. After all, when you are in your 20s or 30s, being 65 or older can seem like forever.

Even for older people, it can be daunting. While everybody would like to retire in comfort and financial security, the amount of time and complexity of creating a successful retirement plan can make the whole process somewhat intimidating.

As a matter of fact, retirement planning often can be done very easily. All it takes is a little homework, an obtainable savings and investment plan, and the long-term commitment to preparing for your retirement years.

How Much Do You Need for Retirement?

After you stop working, your expenses don’t stop. In fact, given the fact that you probably will be dealing with more health issues, they are likely to be higher.

So how much money do you actually need to fully fund a comfortable retirement? While an exact answer is impossible to give, there are some factors that should be considered:

Medical Expenses – If and when you become ill, you are going to want the top-quality medical services that are available. Most people don’t want to have to depend on charity or welfare. In Singapore, everyone is entitled to MediShield Life benefits. But this publicly funded program only covers minimal expenses. And there often is a gap between what the government will pay for and what you actually need.

Living Expenses – You are still going to have to live indoors, wear clothes, eat food, and have heat and fresh air to breathe when you are retired. All of these things cost money. Even if your mortgage is paid off by the time you retire, you are still going to have to pay property taxes, homeowners insurance, and maintenance costs.

Other Expenses – A comfortable retirement includes such non-essential expenses as entertainment, transportation costs, and other expenses that don’t fall into the other categories.

Add these all up, add the rate of inflation between now and your retirement date, and you have a general idea of how much money you are going to need for your retirement. Now all you have to is multiply that number by how long you expect to live!

Start Planning Now

Retirement planning is a process that takes decades of commitment in order to achieve the end result: The comfortable retirement you deserve. The concept of saving and investing money in a retirement fund may seem daunting, but with a few basic calculations and commitment to a realistic plan, you can achieve it.

How Can You Cope With Long Term Care?

Screenshot (259)I would like to share with you the story of two friends of mine, who are in distress because their parents require long term care.

George and Joanne are a married couple in their late 40s. George just put his parents in a nursing home, which costs $2,000 per person every month. At the same time, Joanne’s mum is living with them while receiving in-home medical and nursing care. Such home care services costs $1,100 every month.

All 3 parents are either suffering from dementia or stroke, which hampers daily activities like eating and bathing. In particular, George’s mum has lost control of her bladder due to dementia.

They feel stressed and emotionally drained. Both sets of parents have lost their savings and independence, because they lack long term care insurance.

After struggling with long term care for their parents, George and Joanne want to protect their kids from the financial and emotional burden of having to care for them in their old days. They realised they need a long term care insurance policy.

As George was sharing with me, he felt that if his and Joanne’s parents had a long term care policy, instead of creating this emotional and financial burden for the family, the policy would have paid for the care and help them maintain their independence.

Lesson learnt:
The greatest risk we will face in retirement is requiring long term care. Without long term care insurance, we are playing the wrong odds. What is really worrying George and Joanne is this fast approaching dark cloud of a $100,000 per person risk, for an average 5 years stay. How are they going to pay this amount when they still have to save for their retirement?

If you are 40 years old or older, long term care insurance builds a shield around your nest egg, protecting you and your family from that risk so you can enjoy spending quality time with each other in retirement. Your kids will be grateful they don’t have to worry about changing your diapers or giving you that uncomfortable sponge-bath, because you planned ahead.

If you have parents age 40 or above, long term care insurance will pay for the care of your parents at old age and help them maintain their independence. Most importantly, you don’t have to pay for long term care expenses such as Nursing Home fees and hiring a caregiver on your own.

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