SINGAPORE - Serious and persistent illness can wreak havoc on one's finances.
Health insurance, an efficient way to mitigate that financial risk, is one aspect of risk management that should not be put off for too long.
Here are some principles to take note of about health cover:
Group cover cannot replace individual portable cover
While you are employed, it is tempting to put off thinking about buying your own health policies. Some companies offer generous group hospital and surgical (H&S) cover. The catch is that should you be out of work or retire, that cover ceases. At that point, the cost of buying personal health cover may be very high, given that you are likely to be older and you may have pre-existing conditions that may be excluded.
Unfortunately, there will inevitably be some degree of replication between a personal H&S policy and group cover. Premium payments, however, need not be too much of a strain. For instance, premiums for MediShield Basic and private integrated Shield plans are paid through the Medisave account under the CPF.
The younger you are, the lower the cost of cover
This is because young people are likely to be healthy and the probability of their making a claim is small. That is why you are often advised to buy insurance when you are young. This is particularly because, as they get older, many people will develop health problems which are likely to be excluded or subject to a premium loading.