My Insurance Review (2020)
A review on my personal insurance coverage.
In case you haven't heard about it, Critical Illness (CI) definition are changing in Singapore soon.
According to the Life Insurance Association Singapore (LIA), the main insurance association representing the local insurance scene, these new CI definitions are set to take effect on 26th August 2020 (in about 3 weeks time).
What this means is that from 26th August 2020 onwards, all insurers in Singapore would have to adopt the new Critical Illness (CI) Framework 2019 as set out by LIA Singapore, replacing the current CI framework adopted in 2014.
I won't be going into the details of the new CI framework and its implications, but if you are interested, Seedly has written a nice article for the ordinary individual to understand more about these changes and how you might be affected by the new CI definitions.
In general though, there will be stricter definitions for cancer, heart complications and stroke (the so-called "big 3 CIs"), along with more exclusions added to conditions like coma and benign brain tumour, to name a few.
What this mean is that it may become harder for policyholders to make claims against their policies, and in a few instances, policyholders will even need to spend more money to undergo diagnostic tests to further confirm the condition before they can make a CI claim.
Existing CI policies will not be impacted, as insurers are required to fulfil the terms in the contract for as long as the policy remains in effect. As such, for those who have yet to get any CI coverage, this will be the last chance to get any CI policies under the old definition adopted in 2014.
With this in mind, I guess this would be a good time to review my insurance coverage, in particular on my critical illness coverage. After all, it's been a while since I last reviewed them.
Before I begin, I would like to point out that I am neither an insurance professional nor have I been explicitly trained in insurance. I do not have any of the necessary certifications, have never sold insurance to anyone and have no intention to do so in the foreseeable future.
This post is also not sponsored by anyone, and is purely a humble review of my own personal insurance coverage. My only hope is that this post might be able to help others make better insurance choices, based on my personal reasoning and experiences.
My current insurance coverage
In their respective categories, I currently hold:
Hospitalisation Insurance (AIA HealthShield Gold Max Plan B)
Critical Illness Insurance (Aviva Mindef Group Living Care)
Early Critical Illness Insurance (Aviva Mindef Group Living Care Plus)
Death/TPD Insurance (Aviva Mindef Group Term Life & GE Dependents Protection Scheme)
Personal Accident Insurance (Aviva Mindef Group Personal Accident & AIA Solitaire Personal Accident)
The only insurance I am not covered for is Disability Income Insurance, but since I am not working and do not have an active income for now, I am not eligible for it. Nothing I can do about it now, but I would look into this when I start working in the future.
Breakdown of my current insurance coverage
1. Hospitalisation Insurance (AIA HealthShield Gold Max Plan B)
Total Coverage: Up to Public Hospital (Ward A and below)
Comments: Stayed in both Public Hospital and Private Hospital before, and the entire Public Hospital experience met my expectations.
Given this, I feel that that my current health insurance coverage of up to Ward A government restructured hospitals is adequate for me, with the yearly premium more affordable as well.
Verdict: No Change needed
2. Critical Illness Insurance (Aviva Mindef Group Living Care)
Total Coverage: $350,000 for 36 out of the 37 CIs defined by the LIA. The remaining CI, 'Angioplasty & Other Invasive Treatment For Coronary Artery', is capped at 10% of sum assured or $25,000, whichever is lower ($25,000 in my case).
Point to note: $350,000 is the maximum coverage possible for this policy.
Comments: At the time of writing, the CI coverage offered by the Aviva Mindef Group Living Care rider has already adopted the new 2019 definitions set out by LIA.
Unlike individual policies, this is a group policy, so Mindef 'owns' the insurance policy. In other words, I don't have control over any future changes that Mindef might adopt for this insurance policy, just like how in this case I don't have control over whether to accept the new 2019 definitions or not.
Nonetheless, I would still keep the Aviva Mindef Group Living Care, since it is very affordable (before the age 50) for the amount of coverage it provides, and is easily one of the cheapest policies out in the market.
However, as part of my plan to increase my CI coverage to $500,000, I guess this would be a good time to layer on another CI insurance, and to 'lock in' this additional coverage with the 2014 CI definitions.
Side Note: The high coverage I am striving for here is just me being kiasu; the recommended CI coverage by LIA is only 3.9x your annual income in case you are wondering.
Verdict: Get additional CI insurance
3. Early Critical Illness Insurance (Aviva Mindef Group Living Care Plus)
Total Coverage: $300,000 for 10 Early CIs.
Point to note: $300,000 is the maximum coverage possible for this policy.
Comments: Similar to the Aviva Mindef Group Living Care, the Aviva Mindef Group Living Care Plus is also very affordable (before age 50) for the amount of coverage it provides.
While it only covers 10 Early CIs, the 10 Early CIs covered are from the "big three CIs" (i.e. cancer, heart complications and stroke), as well as kidney removal and small intestine or corneal transplant.
As cancer, heart complications and stroke make up 90% of CI claims, I think it pays to hold on to this policy in case of any diagnosis of early cancer, early heart complications and early stroke.
To align my Early CI coverage with my CI coverage, I plan to also increase my Early CI coverage to $500,000. As such, I would layer on another Early CI insurance.
For the additional Early CI insurance, I would go with a more comprehensive Early CIs coverage that covers more Early CIs, on top of the above 10 Early CIs.
Side Note: Again the high coverage I am striving for here is just me being kiasu; As for the recommended Early CI coverage amount, the LIA does not have any for Early CIs, so it's really up to you.
Verdict: Get additional Early CI insurance
4. Death/TPD Insurance (Aviva Mindef Group Term Life & GE Dependents Protection Scheme)
Total Coverage: $1,000,000 (Aviva Mindef Group Term Life) + $46,000 (Great Eastern Dependents Protection Scheme) for Death and TPDs.
Point to note: $1,000,000 is the maximum coverage possible for the Aviva Mindef Group Term Life policy; Great Eastern Dependents Protection Scheme has standardised coverage of $46,000.
Comments: The Aviva Mindef Group Term Life is the only insurance policy in Singapore to also include Death/TPD as a result of peacetime military operations (i.e. reservist included).
As I still have over 10+ years of reservist duties, I will continue holding on to this policy.
As for the Great Eastern Dependents Protection Scheme, I am keeping it as well since the premium is pretty low for now and payable by CPF.
Verdict: No Change needed
5. Personal Accident Insurance (Aviva Mindef Group Personal Accident & AIA Solitaire Personal Accident)
Total Coverage: Up to $600,000 (Aviva Mindef Group Personal Accident) and up to $150,000 (AIA Solitaire Personal Accident) for Death, Burns, Dismemberment or Permanent Total Disablement due to accidents.
Point to note: $600,000 is the maximum coverage possible for the Aviva Mindef Group Personal Accident policy;
For the AIA Solitaire Personal Accident policy, only Accidental Permanent Total Disablement has $150,000 coverage, Accidental Death, Burns and Dismemberment only covers up to $100,000.
Comments: The Aviva Mindef Group Personal Accident mainly focuses on death, burns, dismemberment and disablement due to accidents. It also pay out a small amount of between $1,250 to $5,000 for selected fractures.
The premium for the Aviva Mindef Group Personal Accident is cheap at just $1 monthly per $100K coverage so I am keeping it as a why not.
The AIA Solitaire Personal Accident on the other hand, not just covers death, burns, dismemberment and disablement due to accidents, but also up to $2,000 for medical expenses and up to $500 for Chiropractic/TCM expenses per accident.
As I like to participate in outdoor activities, I am keeping it as a protection against any medical claims for accidental sport injury or fracture accidents.
A special shout-out here to my Financial Consultant, Mr Ong Ting Yong, for the excellent service and advice provided to me.
Verdict: No Change needed
With all these in mind, the final verdict is to increase my current CI and Early CI coverage to $500,000, up from my existing CI coverage of $350,000 and Early CI coverage of $300,000 respectively.
To achieve this, I have to get additional CI and Early CI insurance plans of at least $150,000 and $200,000 respectively.
My chosen insurance plan for myself
After some deliberation, I decided to get a single policy that covers both CIs and Early CIs instead of two separate plans. Spending some time online looking around, I decided to go with the Tokio Marine TM EarlyCover, with a coverage of S$200,000 and up to age 75.
With this additional S$200,000 coverage, my CI and Early CI coverage are now $550,000 and $500,000 respectively.
The Tokio Marine TM EarlyCover is a single payout CI term plan that covers 99 critical illnesses from different stages of severity – early, intermediate and advanced, as well as 10 Special Conditions. The plan also provides a lump sum death benefit of S$20,000, and is available for coverage up to age 70, 75 or 85.
I decided to go for coverage up to age 75 for the following reasons:
While the possibility of occurrence is higher for coverage of up to age 85, my personal take is that CI coverage should only be a form of income replacement to allow me the option to stop working and focus on recovering upon diagnosis. This is especially important during my prime working years of age 25 to 65 (or 70 since we are all living and working longer). As such, by the time I decided to stop working, I should have already gathered sufficient retirement funds for my day-to-day expenses, and CI coverage then would be a nice-to-have, rather than a need.
Most critical illness treatments are covered by my hospitalisation plan (i.e. my Integrated Shield Plan) for local treatment. I will not need the payout for my medical bills.
By extending to age 85, it will increase my plan premiums and possibly delaying my retirement, as I now need to gather more retirement funds for the plan as well. Assuming that I retire at age 65 and no longer have an active income, I would still have 20 years of premium payments to be made, on top of the already (much) higher premiums to begin with had I opted for coverage until age 85.
Back to my chosen insurance, the premium I was quoted for the Tokio Marine TM EarlyCover plan is also one of the lowest among its peers/competitors offering a similar product, which is great.
This, coupled with the fact that I also decided to purchase the policy through MoneyOwl, means I am also eligible to receive up to 50% rebate in the agent’s commissions. Sounds like a pretty good deal to me.
A special shout-out here also to my assigned MoneyOwl's client adviser, Mr Lee Yong Shun, who had most patiently and kindly provided me with the relevant information and advice needed for me to make my decision throughout the entire process.
With this new addition, my updated insurance coverage table now looks like:
Sweet. Till the next review. (:
Are you reviewing your insurance too before the new CI definitions take effect? Why and why not? Let me know in the comments section below!
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Disclaimer: All information contained herein this blog is solely the writer's personal opinion, and does not constitute an offer, recommendation or solicitation of an offer of any kind. Readers are also advised to do their own due diligence, and to consult a financial adviser for any financial advice.