Should I get an Integrated Shield Plan for my elderly mother?

Recently we received a question from a Consultwho.sg user about buying an Integrated Shield Plan (IP) for his mother. His mother is 72 years old, and suffers from high blood pressure and high cholesterol levels. Our user is considering buying an IP for the purpose of covering his mother's hospitalisation or surgical costs.

What is an Integrated Shield Plan (IP)

An Integrated Shield Plan (IP) helps defray the cost of hospitalisation or surgery at private hospitals, or class A/B1 wards in public hospitals. IPs are sold by insurance companies, and provide additional coverage over Medishield Life. IPs are different from Medishield Life, which is run by the Central Provident Fund (CPF) board.

A quick comparison of private hospital IP premiums hosted by the Ministry of Health reveals that the cheapest yearly premium for a 71-73 year old ranges from $2800 to $3300. Note that we have used private hospital IP premiums here - basic, standard IP (introduced in May 1st 2016), class B1, and class A IP premiums are all cheaper. For more information, please visit this link.

Should our user purchase an Integrated Shield Plan (IP) for his elderly mother? Let's see what some financial consultants have to say.

Wilfred Ling CFA ChFC:

Wilfred says that it is not advisable for our user to purchase an IP for his mother. This is because it is likely that the IP will exclude all medical conditions related to the blood circulatory system due to his mother's high blood pressure. Similarly, exclusions will likely be imposed on all medical conditions related to high cholesterol levels. This means that it is likely that heart disease and stroke will be excluded.

An exclusion is a condition or circumstance where insurance policy benefits will not be paid. For example if an exclusion is imposed on heart disease, insurance policy benefits will not be paid in the event of a heart attack, or medical conditions related to heart disease.

Wilfred notes that given his mother's age, it is possible that she has developed other medical conditions that she may not be aware of. If that is the case, Wilfred draws from his own experience to raise an important point - IP plans automatically exclude pre-existing illnesses, regardless of whether it has been declared by the insured.

As a result, it is likely that medical conditions the user and his mother may be concerned about will not be covered by the IP. Together with the high premiums imposed due to her age, Wilfred does not think that the high IP premium is justified by the large number of exclusions.

Wilfred makes a point that if his mother is a Singaporean or Permanent Resident, she is already covered by Medishield Life, which defrays hospitalisation and surgery costs in B2/C wards in restructured hospitals.

Seng Bingyang ChFC:

Bingyang raises the point that the user's mother is 72 years old, and is eligible for the Pioneer Generation Package. This package lowers the premium cost of Medishield Life, and contributes a small sum to the individual's Medisave account every year. Regarding exclusions and the severity of the mother's health conditions, Bingyang suggests checking with the IP insurers separately.

Bingyang suggests that the user assess his financial situation in the event of a medical emergency - has he set aside enough savings to pay for his mother's medical bills without compromising his current lifestyle. If the user values the peace of mind of paying a 'known' premium payment to cover possible hospitalisation and surgery costs, then an IP may be suitable.

Read the original question and answer here.

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