What Is A “Deductible” or “Excess”?

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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.

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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.

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.

4 Types of Insurance Cover You Need

life buoy protectionLife is full of uncertainties and we need to always be prepared for the untoward. Doing all you can to keep your family and yourself away from financial hardship is very important. Once you have set aside an emergency fund of three to six months of living expenses, you should be seriously thinking of taking care of your protection needs. Here are the 5 types of protection we need for comprehensive insurance cover.

1. Hospital & Surgical (H&S)

If an unexpected illness or accident happens, the first costs that you will have to take care of are your hospital & surgical bills. A major illness or injury can wipe out all our Medisave funds and even our life savings. One of the most dreadful things when you are ill is deciding which assets you have to liquidate to pay the medical bills. With escalating healthcare costs in Singapore, hospital & surgical insurance is undoubtedly the most essential type of protection for anyone.

2. Disability (Income Protection)

What is your most important financial asset? This is a question I often ask people and they may initially say things like the house they own, their car, or any other investments they have. Upon further prompting, they will realise that their greatest asset is in fact themselves. It is our ability to write, speak, read and commute to and from work that allows us to make a living. The effects of disability can range from a minor and temporary reduction in income to a catastrophic lifetime loss of income. The table below sums up the different types of disability which we should cover ourselves for as a form of income replacement:

Rising in Severity (1 to 3) Disability Type Common Definitions
1 Own occupation “Unable to perform material duties of own occupation”
2 Own or similar occupation “Unable to perform any occupation which one is reasonably fitted by training, experience or education”
3 Any occupation “Total and permanently disabled and unable to engage in any occupation”

3. Critical Illness

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This provides a lump sum pay-out when you are diagnosed with one of 37 specific illnesses such as invasive cancers at an advanced stage. Some people believe that critical illness (CI) cover is unnecessary if they are covered by their H&S plans. However, these Medisave-approved Integrated Plans which most Singaporeans rely on are insufficient to cover all expenses due to a major illness. Our shield plans reimburse only for inpatient expenses, costs for cancer treatment such as chemotherapy and radiotherapy, and kidney dialysis. A cancer patient is commonly not warded in a hospital unless surgery is required or life support is essential towards the terminal stage of the illness. Most of the medical expenses incurred on specialist consultation, medical examination, laboratory tests and specialised cancer drugs cannot be claimed in H&S plans.

Furthermore, for someone diagnosed with an advanced stage CI, in order to recover well he/she may have to take time off work for a prolonged period of time. For working adults, the income lost due to time away from work while undergoing treatment and rehabilitation will not be compensated.

Early stage

Early stage CIs usually require a lower cost of treatment and chances of recovery will be higher than advanced stage CIs. However, if an early stage cancer patient is not warded in a hospital, it is still good to have a small amount of cover for expenses not covered by the hospitalisation plan. In addition, wouldn’t it be great if we can have the choice to stop work and rest, if we are diagnosed with an illness? We can never predict if our illness will worsen. Having an insurance pay-out allows us to take leave from work to rest and receive treatment when our illness is still at an early stage. This can enhance our chances of recovery. 

4. Death

Death cover provides a pool of funds to your spouse and dependents in the event of your untimely death, to make sure that the family that you so painstaking work for do not tumble when you are gone, and that they can continue to live life as well as they always have. Nothing can compensate the emotional loss of a loved one, but if the financial aspect is well taken care of, it makes things a little more bearable.