fML Case Study: Shield Plan Riders At Old Age – Yay Or Nay?

fundMyLife Case Study - Is it worth it to get shield plan riders at old age?

While we’re a question-and-answer platform that connects questions to the right advisers, once in a while the fundMyLife team receives questions directly. We get them via email, our contact page, or even Facebook itself. One day, fundMyLife had the opportunity to correspond with Karen*, who dropped one of the team members a message about personal finance.

Here’s a little bit about her – she is 50 years old, currently unemployed, and has three children who are still in school. They are aged between 17-21. She presented a total of four different questions for us, which we thought were worth discussing. In this article, fundMyLife explores her questions and shares our thoughts in this case study, on whether it’s worth it to get Shield Plan and Shield Plan riders at old age.

Karen’s questions

Karen started the conversation by sharing that she and her children had a Shield Plan A from NTUC Income without any riders. She was wondering if it was worth it for her to firstly switch to Enhanced Shield Plan (presumably from NTUC Income as well) (Question #1).

She also expressed concern whether it was worth attaching a rider since there will be a co-payment of 5% in a few years’ time (Question#2).

The next question she had was if it was a good idea to upgrade her children’s plans to the enhanced private hospital shield plan without riders first (Question #3). Her children can obtain riders when they start working.

Finally, she asked if it was easier to downgrade plans later in her children’s lives when they purchase the private hospital plan now while they are still young and healthy (Question #4).

fundMyLife’s opinion**

#1 To upgrade or not to upgrade

An easy answer to that is “it depends”, but that would be a cop-out.

The Integrated Shield Plan from NTUC Income comes in two variations: IncomeShield and Enhanced IncomeShield. The main difference between these two plans are that the Enhanced version has less limits when it comes to compensation. For example, the equivalent of IncomeShield Plan A is Enhanced IncomeShield Advantage where the limit of compensation is $1,200/day for the former as opposed to as charged for the latter, i.e. as much as the hospital charges.

Let’s see how much she has to pay to switch to an enhanced plan equivalent for her age. IncomeShield Plan A vs Enhanced IncomeShield Advantage, at 50 years old: from annual premium of $178 to $224. That is pretty affordable! How about after 50 years old?

We plotted a table for her perusal, from 50 until 85 years old.

A table showing the premiums for age ranges
Before we ask whether it’s worth it to get shield plan riders at old age, we must see how much it costs to maintain ISPs into old age. Information found here and here.

We discuss this from a premium point of view. At first, between 51 to 60 years old, the premiums remain manageable for both kinds of ISP, with around $100 difference between the two. Two observations on what happens after 60 years old:

  1. Within the same plan, the premium almost doubles from the previous age bracket, i.e. $257 vs $413 for IncomeShield
  2. The difference in premiums for the same age bracket between IncomeShield and Enhanced IncomeShield increases drastically

The increase in amount reflects the higher risk of hospitalization when a person gets older, which is normal. However, for Enhanced IncomeShield, the cash outlay, i.e. amount required to pay in cash, increases a lot as well. In addition, the cash outlay for Enhanced IncomeShield is twice that of IncomeShield in each age bracket. Hospitalization plans are important, and Karen will have to consider whether she’s okay with the expenditure and whether she will be able to maintain the cash outlay for the years to come.

#2 Is it worth getting a rider?

Her concern comes from the fact that there will be at least a 5% co-payment for the hospital bills in the near future, in 2021. To address the first concern, hospital bill sizes range between $970 – $13,1490, depending on the ward class and location of the hospital. In addition, NTUC declared there are maximum co-payment of $2,500 for both Plan A and Advantage with the Assist Rider.

A secondary concern that she should address is the fact that she has to cough up additional cash to pay for the riders. How much does need to pay? We plotted a table for her convenience.

Table that helps Karen decide whether to get shield plan riders at old age
Rider premiums for Plan A and Advantage riders. Plus Rider is no longer offered for Plan A policyholders.

Judging from the the table, the premium for the riders jump at she’s 60. It’s relatively affordable, and if she has the cash for it, why not?

#3 A family that upgrades together, stays together

…in the same ward, that is. However, as mentioned it’s important to consider the costs involved. More so if she and her children are not working yet so that presents additional  risks and may use too much of her MediSave funds.

That said, because her children are not working, this reduces the household expenditure per person. This is advantageous to Karen because this will qualify her and her children for substantial subsidies for MediShield Life.

Table of MediShield Life subsidies based on income per person
Subsidies for MediShield based on household monthly income per person. Source: https://www.moh.gov.sg/content/moh_web/medishield-life/premiums—subsidies/types-of-premium-subsidies.html

With lowered MediShield Life premiums, she can channel her funds to paying for her and her children’s Shield Plans.

#4 It’s always easier to downgrade

Have you ever thought of why you need medical checkups/underwriting when purchasing life or health insurance? The insurance company is taking on a risk to insure you, and as such requires as much information as possible.

When her children downgrade from Integrated Shield Plans to MediShield, there’s no need for any health assessment or medical underwriting. However, if any of her children decides to upgrade again after downgrading, they’ll have to undergo medical underwriting again.

fundMyLife opinion

We don’t have the entire picture which includes household income. This is important because households below a certain level qualify for premium subsidies for MediShield Life (more details here). Whether we assume that there is a breadwinner in the family or otherwise, the household monthly income per person should be at a sufficient level to qualify for subsidies.

One thing to note is that, when she is older, her MediSave will not cover everything for either the IncomeShield or Enhanced IncomeShield. In her later years, cash is required to cover the rest. Without a job, the burden falls on her children. The amount of cash required for the plan is not trivial from 66 years onwards.

It’s important that she engages a financial adviser, preferably one who can advise not just herself but also her children. We recommended her to approach on of the awesome financial advisers of fundMyLife.

Ask fundMyLife financial questions today!

That’s all folks! We hope the case study useful to understand whether it’s worth it to get shield plan riders at old age. If you see anyone who’s like Karen, just show them this article and let them know it’s good to reconsider.

If you’re still unsure about what you need, why not head on over to fundMyLife and ask our curated pool of financial advisers? Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

*name was changed for anonymity

**the following article is a opinion, and does not constitute financial advice whatsoever. Please do your own due diligence and speak to a professional financial adviser

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

Top 9 Reasons Why Singaporeans Land In Hospitals

Top reasons why Singaporeans land in hospitals

Have you ever wondered why Singaporeans land in hospitals? We can look to data for that. However, medical data in many countries can be sparse at best, opaque at worst. Fortunately for us Singaporeans, data is plenty and often available readily. We here over at fundMyLife love data, and what better to explore this passion by going through the hospital bill data provided by the Ministry of Health?

In the handy Excel sheet from the MOH website, there are a total of 155 condition/procedures in the list, capturing hospital bills between 2016 and 2017. While immensely useful, it can be somewhat overwhelming, chock full of data. In this article, fundMyLife distills the list and examines the top 7 reasons (in no particular order) why Singaporeans land in hospitals.

#1 Anus, Surgical removal of haemorrhoids (Haemorrhoidectomy) – 10,180 cases

We start this list with the end. Of our bodies, that is. Haemorrhoids, also known as piles, are swollen veins in the rectum and/or anus. Haemorrhoids are a literal pain in the ass, causing plenty of discomfort when you sit or when you’re pooing. In the worst case scenario, the swell results in a visible clot that requires surgery for removal. Most cases are mild, and can be treated without surgery. To prevent this, make sure you eat plenty of fibre so that you have soft stools and don’t need to strain during bowel movements.

#2 Childbirth – 40,157 cases

In the list, we found two different reasons for hospitalization under the category of Childbirth. There’s antenatal care (6,548), where a mother is admitted into the hospital due to problems during pregnancy. For example, abnormal bleeding or tests and monitoring that requires an overnight stay. The second reason is the childbirth itself, where mothers either do it naturally (22,628) and Caesarean (10,981). We note that twice the number of mothers choose natural childbirth rather than Caesarean (ouch).

#3 Newborn, Normal Baby – 25,391 cases

According to the list, almost 2/3 of the children born in hospitals require hospital stay, assuming each case in #2 results in one child. Even if the child is healthy, they sometimes require observation overnight (15,202). There are many reasons for this. If the baby releases his/her bowels before birth, he/she will be swimming in amniotic fluid with the stool. While most babies are ok despite that, they are observed for any possible infection for 24 hours.

Mothers who carry Group B Streptococcus in their vagina receive antibiotics childbirth, but the baby will undergo observation for any possible infection. In addition, if the mother’s water broke longer than 24 hours before the child’s birth, the baby is at risk of developing infection in the lungs which requires observation. If the baby’s weight is lower than average, the baby may require observation for possible health concerns.

Another main reason for a normal baby requiring overnight stay is neonatal jaundice (10,189), caused by high levels of bilirubin – broken red blood cells that causes yellowing in eyes and skin. During the stay, the baby undergoes phototherapy, a treatment that exposes him/her to florescent light that the skin absorbs to help break down bilirubin to a more harmless form.

#4 Eye, Cataract Surgery – 46,142 cases

As you age, there is a chance of your lens clouding up that turns your lens opaque. Symptoms of cataracts involve generally poor vision and trouble with seeing light, which really reduces your quality of life. Diabetics and smokers are more likely to develop cataracts. At over 46,000 cases in a year, it’s indeed one of the more common ailments people face in Singapore. The only way to treat this is to remove the cloudy lens and replacing it with artificial lens to restore vision.

#5 Intestine/Stomach, Gastroenteritis (Diarrhoea) – 14,857 cases

Did you know that you can get hospitalized for shitting too much? Neither did we, until a very good friend of one of our members was warded for non-stop diarrhea. While it sounds funny, we assure you that it is anything but. Gastroenteritis refers to the inflammation of the intestine and stomach, usually caused by bacterial toxins or viral infection. Symptoms typically involve expulsion of liquid from your body via non-stop vomiting and/or diarrhea. This is often accompanied by fever and dehydration. Fortunately, mortality in Singapore for severe diarrhea is low, requiring constant hydration.

#6 Intestine/Stomach, Endoscopy for gastrointestinal bleeding (Day Surgery) – 45,006 cases

Endoscopy is a commonly performed procedure to examine your upper digestive system, i.e. oesophagus, stomach and small intestine. It involves putting a long tube with a camera attached to one end called an endoscope into your mouth, where it will travel through your body. We lumped two procedures together, 1) Intestine/Stomach, Endoscopy for gastrointestinal bleeding (25,547) with 2) Stomach, Gastroscopy (Day Surgery) (19,459) since they are similar procedures but for different parts of the body.

Endoscopy helps to image parts of your insides to discover causes for symptoms such as nausea, vomiting, pain in the abdomen, and gastrointestinal bleeding. It’s a day surgery because doctors will give you anesthesia before the endoscope inside your mouth.

#8 Intestine, Colonoscopy (Day Surgery) – 20,747

While the scope went in through the mouth for endoscopy, in colonoscopy the doctor inserts the scope from the opposite end. Doctors use colonoscopy to diagnose possible colon cancer and bowel diseases like Crohn’s disease, polyps, and ulcerative colitis.

#9 Respiratory Tract, Upper respiratory tract infections (URTI) – 29,824

URTI refers to the infections of upper respiratory tract, including middle ear infections and allergic rhinitis. It is a very broad category as the respiratory tract involves several body parts, e.g., nose, nasal cavity, pharynx, and larynx. Common symptoms include nasal discharge, congestion, sneezing, sore throat. Sounds familiar? It’s the ordinary cold and cases like allergy. However, sometimes the cold can so bad that the patient checks him/herself into the ward for observation. Interestingly, a large number of the cases come from KKH, implying that most of these patients are relatively young.

Conclusion

That’s all folks! That was a lot of cases of hospitalization in one year. We hope this article was informative, and you found the reasons why Singaporeans land in hospitals useful in anticipating future possible ailments (touch wood). If you have any more questions on MediShield Life and Integrated Shield Plans, why not ask our curated pool of trusted financial advisers?

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.