• Daniel Lee

Things you must know before you purchase a health insurace

In our previous article – Things you must know before you purchase any insurance - we’ve established that health insurance is one of the types of insurance you NEED to have in the area of risk management.

In this article, we will be going through some of the key considerations you should have when looking at purchasing private health insurance in Singapore.

For those who are hearing this for the first time, private health insurance in Singapore is called an Integrated Shield Plan, which essentially builds on top of the MediShield Life coverage that all Singaporean Citizens and Permanent Residents would have.

Integrated Shield Plans are further divided into two separate categories, the main plan, and the rider. To purchase the rider, you must first purchase an integrated shield plan with the SAME provider.

Main Plan: Public or Private Coverage?

The first consideration is whether you should apply for a hospital insurance plan that covers only public hospitals or up to private hospital treatments?

The key differences between public hospital and private hospital treatment coverage come in the form of:

Quality of healthcare – Thankfully, Singapore is a first-world country that is ranked highly in the Global Health Index. The difference between a private hospital and a public hospital, when it comes to the quality of healthcare, is comparable as they have to abide by the strict standards set out by our government.

Waiting Time – In theory, the waiting time of public hospitals is higher as compared to the private hospital simply due to a higher volume of people going to public hospitals.

However, it is worthwhile to note that all hospital has patient priority issues. Depending on the severity of your situation, your waiting time may or may not be higher. (i.e. someone with a high chance of heart attack will be put in priority as compared to someone with a broken leg).

As such, in a situation where your condition is severe, the waiting time between private and public hospitals may be comparable. If not, the waiting time for a private hospital should, in theory, be shorter than the public hospital.

***Insurability refers to the likelihood of you being insured based on your current health situation. When it comes to health insurance, you can downgrade your coverage anytime you want but it is near impossible to upgrade or get insured the moment you have a pre-existing condition.

This is especially so in the case of hospital insurance. From experience, I have had clients whose applications had been postponed due to BMI issues or have certain conditions excluded simply because they had visited the polyclinic for it before. Long story short, lock in your insurability while you are still healthy.

Rider: Is there a need to purchase a rider?

Before any hospital insurance claims can be paid out by the insurance companies, we will have to first pay for the deductibles followed by any outstanding co-insurance amount.

So, what exactly is this deductible or co-insurance?

A deductible is an initial amount you have to pay for your medical expenses before your health insurance makes a payout. You usually only need to pay the deductible once in a policy year.

Co-insurance is how much you have to co-pay or split the cost with the insurer after you pay the deductible. It is usually expressed as a percentage. For example, if you have a co-insurance of 10%, you will pay 10% of the cost after the deductible.

While deductibles are still pretty much manageable (usually fixed at $3,000), the co-insurance component may be problematic as it is variable and expressed as a percentage of your bill size.

Now, this is where the Integrated Shield Plan Rider comes into the picture.

Depending on the company, the Integrated Shield Plan Rider will cover your deductibles, either partially or completely, and limits your co-payment payable to a maximum of $3,000 a year. That means to say, that regardless of your bill size, the maximum co-payment that we will have to pay a year would not exceed $3,000. (only if you visit Government Hospital or the list of panel specialist or hospital that the insurer works with)

Having an Integrated Shield Plan Rider will complete your hospital coverage and provide you with peace of mind that regardless of what happens to you in the future, the maximum amount that you will have to fork out for your hospital expenses would not exceed $3,000 a year.

My Stance on Health Insurance (and self-plug)

For audiences who are below 45 years old, if your budget permits, just get hospital insurance that covers up to private hospital treatment, and here is why…

Firstly, the difference in premiums between A-ward government hospital coverage and private hospital coverage is still manageable before the age of 45.

Secondly, you’re locking in your insurability now so that you can decide at a later age, where you’re more financially established if private hospital treatment is something, you’re willing to pay for.

For readers above 45 years old, you might want to decide if the cost is worth paying for. If indeed, you would prefer to seek treatment in a private hospital, get yourself covered up to a private hospital. If not, getting yourself insured up to A ward public hospital would suffice.

Now that you’ve understood the

  • Difference between public hospital treatment and private hospital treatment coverage

  • Importance of having an integrated shield plan rider

The next thing you would need to consider would be the insurance company that you should apply for regarding your hunt for the best-integrated shield plan and here’s where the self-plug comes.

As an independent financial advisor representative, I am able to be on your side in helping you assess your insurance planning needs and to compare the different options that are available to you today so you do not have to sink in days and weeks of your time to do it on your own.

If you do not have the time, interest, or know how to identify the right type of insurance and the right company you should be considering, you can reach out to me via telegram and WhatsApp and we’ll see what we can do together!

If you would like to view some of my past work relating to insurance planning, you can head over to my insurance planning page here.

In the following weeks to come, I’ll be publishing more guides - “the things you need to know before…” – relating to financial planning in general so do join my telegram channel to stay updated!

Daniel is a Licensed Independent Financial Consultant with MAS and a certified Associate Wealth Planner that provides advice in the following areas:

  • for investment and portfolio management advice - find out more here

  • for insurance planning and portfolio optimization advice – find out more here

  • for retirement planning advice– find out more here


This article is meant to be the opinion of the author and is for information purposes only.

This article should not be seen as financial advice

This advertisement has not been reviewed by the Monetary Authority of Singapore


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