Insurance & Costs of having and raising a child

[d.o.g.]

did you take in consideration if the policy covers follow up in the hospital after you leave the hospital.

My main concern when I bought was not outpatient care but the $200k cost of an organ transplant. Outpatient care is relatively small potatoes compared to such things. I think some outpatient costs e.g. dialysis can be claimed. However others are out-of-pocket which is where a critical illness policy can be useful.

If you have to pay by yourself then its going to be pretty ex as a private patient.

Do you have a choice? If you do not have H&S insurance, would it not be even worse, since you would be out-of-pocket for both in-hospital and outpatient costs?

As for being a subsidized patient, you are free to choose a subsidized ward if you qualify under means testing. The H&S insurance will cover whatever you actually get charged.

Just because your H&S insurance covers you for staying at a private hospital doesn't mean you should.

If you want subsidized patient status during outpatient care, then get admitted as a subsidized patient from the start.

Disclaimer: I am not an insurance agent and am not licensed to give advice on medical insurance. Talk to a licensed insurance agent or an insurer to be sure.

[flinger]

Thanx D.O.G. Appreciate your reply.

I am worried that the outpatient would be expensive based on my experience. 1 outpatient treatment as a private costs me about 600 dollars and follow up was like 200 plus each. So adding them up came up to quite a bit, but the company I was working it covered the cost.

I was thinking, if I did not have a job or worked in a company that does not cover these, then I would have big out of pocket expense if I have a few months or a yearly follow up.

I was thinking if any of the H & S support these either through a rider or something.

Anyone knows? Probably need to ask an advisor.

Thanx again. I see this as a potential risk.

[bluechipstamp]

I've claimed twice from IncomeShield for post-hospitalization fees. Follow-up visits/therapy/medication are covered within 90 days from discharge, subjected to the same co-insurance/deductible. I believe other shield plans are similar.

[Bibi]

I write this based on my experience. The H&S will pay outpatient even after your discharge from hospital for 90 days subject to co-insurance and deductible. After which you have to pay it out of your own pocket except if the outpatient claim is kidney dialysis or cancer treatment or organ transplant treatment.

If you were warded as a private ward, your outpatient cost will be considered as private cost. You can seek to reduce this cost by requesting for a referral from a local polyclinic. Means testing will be done to determine which ward class you are eligible. By asking for a referral from polyclinic, you will not be able to choose your hospital nor your doctor.

[JJW]

flinger,

Most H&S plans in the local market should have coverage for 'Post Hospital Follow Up Treatment', which is defined in the policies. However, coverage is generally only for follow up treatment within a specified number of days from discharge.

But as d.o.g. has pointed out, best to check with the insurer/agent for confirmation.

[flinger]

Thank you everyone for your reply. I need to read up on how means testing is done, I am more then willing to pay if it is affordable for me at that time, but just in case, job lost or for some reason don't have the cash, or locked in something etc... I want to have the flexibility ....

Thank you again all for taking the time to reply to me. Cheers!

[Musicwhiz]

Thanks d.o.g., no offense taken.

I am reviewing my policies now (I have a summarized sheet) and realized that I had purchased quite a few whole life policies (some when I was young, and some in early 2000s), so I guess I made some bad mistakes there. I'd probably liquidate most of them and buy additional term to cover myself; then invest the money saved. Good idea when I started to think about it - I should have done this long ago haha.

As for my daughter's policy, it would seem that I should terminate the Whole Life policy to save myself money moving forward in 2011, and use the money saved to further increase my term coverage (for me and wife). Will have to speak to my planner about this. I guess although I already spent some $$ on my daughter's whole life policy, it's better to terminate now rather than suffer more years of paying when the returns are poor, and I can use term instead.

Once again, thanks!

Just to provide an update on my insurance revamp and review after the discussion on December 10, 2010. It's been about 4 months since then and the date today as I type this is April 15, 2011.

Thanks to d.o.g's advice I took a long hard look at all my policies. I've surrendered three policies of my own - 2 Whole Life and 1 Step-Up Term; and signed on three new policies - a CI/TPD Term till Age 85, a 30-year reducing Term and a Disability Income Policy covering $3,000 a month. I am still keeping one Life Policy as it is cheap and offers death, TPD and CI coverage; and also one older endowment policy which so far has yielded 4.75% per annum compounded returns (I did the computation with my financial broker with the help of a financial calculator).

As a result, my yearly premiums has dropped from about $4,450 to $4,380. Doesn't sound like much, but my coverage for death/disability has increased from $380,000 to about $750,000; and for CI the coverage has increased from $75,000 to about $150,000. In addition, I also now have coverage for income loss should that occur.

From this exercise, I managed to "free up" about $9,000 of cash from the surrender of the two Life policies, and have put this money to work earning 5-6% yield in equities.

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As for my wife, she will be surrendering her Whole Life policy later this month, and free up about $6,000 worth of cash (to be used for investment, no doubt). Her current term policy is step-up and covers $250,000 death/disability and she will give this up too. Premiums currently stand at about $3,000 per annum.

I have already signed her up for two new Term policies for death/disability and CI. Her coverage is now $720,000 for death/disability and $125,000 for CI, while her premiums have been reduced to just $2,000 per annum! I did not get disability income insurance for her as I perceive she may convert from full-time work to being a stay-home mum pretty soon; and anyway she earns less than me so the policy will also pay out less. Somehow the costs for disability income policies are much higher for women than for men!

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The plan is also to terminate my daughter's Whole Life policy and change it to a Term one, either with same expense/higher coverage or lower expense/similar coverage. This policy currently runs till about Nov/Dec so I am just waiting for that time to come for the surrender. Will invest any difference I obtain; and currently I am already investing my daughter's money on her behalf in order to build up her University Education Fund.

Incidentally, my current Endowment Policy (the one yielding 4.75% compounded) will mature around the time she is 18, so this is yet another source of funds to fund her education if need be.

So through all this, I have to once again thank d.o.g. for "forcing" me to review me and my wife's insurance policies and to surrender the Whole Life ones. Will proceed to "Buy Term and Invest the Rest" from now on as I feel comfortable in getting a 5% return on my investments over the long-term.

Will appreciate some comments and feedback on this as well, and for others to share what they have done with their own insurance policies.

Cheers!

[mikh]

".. and also one older endowment policy which so far has yielded 4.75% per annum compounded returns (I did the computation with my financial broker with the help of a financial calculator)....

" ..Incidentally, my current Endowment Policy (the one yielding 4.75% compounded) will mature around the time she is 18, so this is yet another source of funds to fund her education if need be..."

Hi MW,
Can you let me know what is the compounded return this particular Endowment policy guarantees? Based on what you say, the 4.75% is probably the "if the funds perform..". I see Endowments being bandied around by agents based on historical performance rather than on the much lower guaranteed sum (of course!). But if it's that sure, why don't they guarantee it?

Secondly, not directed at MW. I've tried to follow the discussion on this thread and did not see discussion about renewal premium of term policies. Although it appears wise to buy term, there is the risk of rates going up, as they will. In contrast, the alternative would lock in the premium. Would not that be an important consideration as well?

[Musicwhiz]

Hi MW,
Can you let me know what is the compounded return this particular Endowment policy guarantees? Based on what you say, the 4.75% is probably the "if the funds perform..". I see Endowments being bandied around by agents based on historical performance rather than on the much lower guaranteed sum (of course!). But if it's that sure, why don't they guarantee it?

Secondly, not directed at MW. I've tried to follow the discussion on this thread and did not see discussion about renewal premium of term policies. Although it appears wise to buy term, there is the risk of rates going up, as they will. In contrast, the alternative would lock in the premium. Would not that be an important consideration as well?

Hi Mikh,

The returns were computed as the current surrender value of the policy versus total funds injected to-date, and it worked out to be 4.75%. Hence, this is guaranteed as it is the current surrender value if surrendered today. For info, the policy was incepted in 1997 and is with NTUC Income (there were also some bonus declarations along the way).

As for Term, I have purchased reducing Term instead of step-up Term. This means my premiums stay the same but coverage decreases as I get older, which is logical because it is assumed you have more and more retirement funds and savings as you age. So this removes the risk of premiums "jumping" at every 5/10 year interval.

[mikh]

" The returns were computed as the current surrender value of the policy versus total funds injected to-date, and it worked out to be 4.75%. Hence, this is guaranteed as it is the current surrender value if surrendered today. For info, the policy was incepted in 1997 and is with NTUC Income (there were also some bonus declarations along the way)."

Perhaps I was less than clear. I understand that you have achieved 4.75% based on historical performance. So, a: what did they originally guarantee? This should be in the contract. and b: what is guaranteed going forward? This is the same number in the contract. History does not assure the future, otherwise they would have guaranteed it.

"As for Term, I have purchased reducing Term instead of step-up Term. This means my premiums stay the same but coverage decreases as I get older, which is logical because it is assumed you have more and more retirement funds and savings as you age. So this removes the risk of premiums "jumping" at every 5/10 year interval."

This means that your premium rate is already locked in? ie. you have already committed to be insured for XX number of years rather than year by year? Otherwise, there is not much difference in getting same cover by paying a progressive inflated rate.