My Insurance Review (2021) - A Kiasu Approach
A review on my personal insurance coverage in 2021.
I last reviewed my insurance in year 2020 before the CI definition change.
And if you are anything like me, you would have most likely kept your hard copy insurance policies in the bedroom drawer, never for them to see the living daylight ever again. The transition to electronic correspondences and issuance nowadays by most insurance companies does not help either, and it’s now easier than ever to overlook your insurance policies from time to time.
This is why I always make it a point to review my own insurance policies every year to ensure that I am still well covered, and if necessary, make adjustments to my policies to align them accordingly to my current needs and situation. At the same time, I also look at policies to consider in the future when my life stage changes.
More importantly, such a periodic insurance policy review serves to remind me the current state of my coverage, and nudge me to take note of any premium changes. The latter of how much I am paying for my policies is critical #nopunintended to help me better plan for my financial goals.
With the passing of a distant relative last month due to cancer and another close relative with kidney failure and due to undergo a heart bypass surgery soon, I have decided to review my own insurance coverage slightly earlier this year, in particular relooking at my hospitalisation and critical illness coverage. #kiasu
Before I begin, I would like to as usual 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 near future.
This post is also not sponsored by anyone, and is purely a humble review of my own personal insurance coverage. I only hope that this post might be able to help others make better insurance choices, based on my personal reasoning and experiences.
A special shout-out also to Mr Lee Yong Shun from MoneyOwl and Mr Ong Ting Yong from the Advisors Alliance Group for the advices and help rendered to me during my annual insurance review.
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 & TM EarlyCover)
Early Critical Illness Insurance (Aviva Mindef Group Living Care Plus & TM EarlyCover)
Death/TPD Insurance (Aviva Mindef Group Term Life & GE Dependents Protection Scheme)
Personal Accident Insurance (Aviva Mindef Group Personal Accident & AIA Solitaire Personal Accident II)
Breakdown of my current insurance coverage
1. Hospitalisation Insurance
Current coverage: Up to Public Hospital (Ward A and below)
Comments: Stayed in both Public Hospital and Private Hospital before, and the Public Hospital experience did meet my expectations.
While I feel that that my current coverage of up to Ward A of a Public Hospital is adequate for me, I have decided to upgrade it further to cover Private Hospitals as well.
Reason being this greatly expands my treatment speed and options, as well as the quality of my hospital surroundings. Not to mention the access to more doctors for any second opinions if required. So it does make a pretty sleek difference to my quality of healthcare, which was the main reason that I was convinced to opt for the upgrade.
For a more comprehensive cover, I would also get the rider which covers a good share of my co-payments portion (i.e. deductible and co-insurance).
Verdict: Upgrade hospitalisation insurance to Private Hospital coverage with rider
2. Critical Illness Insurance
Current Coverage: $550k for 37 critical illnesses defined by the Life Insurance Association (LIA).
Comments: The LIA recommends buying at least 3.9 times your annual income of critical illness coverage, and the 'general advice' I have come across in the market so far is to buy at least 4-10 times your annual income.
Having witnessed the financial impact it can have on an individual should a critical illness come knocking, I have decided to boost my critical illness coverage further.
Critical illness is 'critical' for a reason, and it highly unlikely I would be able to fully get back to my normal life even after recovering.
I also won't know how bad the critical illness will be and when I might be diagnosed with it.
So I have decided to go way further than the recommended coverage, and to buy enough so that I would never need to work again if I get a critical illness.
Note: This is not for everyone. Do speak to a financial advisor to assess the appropriate critical illness insurance coverage that best suits your expectations and means.
Verdict: Get additional critical illness insurance
3. Early Critical Illness Insurance
Current Coverage: $500k for early critical illnesses
Comments: $300k of the $500k coverage only covers 10 early critical illnesses.
The 10 early critical illnesses covered are from the "big three critical illnesses" (i.e. cancer, heart complications and stroke), as well as kidney removal and small intestine or corneal transplant.
However, I don't think there is a need for me to increase my coverage for early critical illnesses as early critical illness is unlikely to affect me as much as a critical illness. Treatment would likely be less "xiong", and I would likely recover faster.
So this amount is just nice for income replacement during my treatment and recovery period should I get any early critical illness.
However, I wouldn't mind tagging alongside a small additional coverage of early critical illness with my aforementioned critical illness policy if there are discounts.
Verdict: No Change needed
4. Death/TPD Insurance
Current Coverage: ~$1 million
Comments: Should be fair to say this amount is more than sufficient.
Verdict: No Change needed
5. Personal Accident Insurance
Current Coverage: ~$1.8 million (for accidental death & TPD). Up to $2,000 for medical expenses and up to $500 for Chiropractic/TCM expenses per accident.
Comments: Should be fair to say this amount is also more than sufficient.
Verdict: No Change needed
Similar to my insurance review in year 2020, the only insurance I am still not covered for now is Disability Income Insurance. Nothing I can do about it now since I do not have an active income yet, and is not eligible for it. I would look into this in the future when I start working.
With these in mind, the final verdict is to upgrade my hospitalisation insurance to Private Hospital coverage with rider, and increase my critical illness coverage to ~$1.5 million.
The chosen insurance policies
For my hospitalisation policy, I decided to stick to my current provider AIA and upgrade to the AIA HealthShield Gold Max Plan A with Rider, as they offer the highest pre- and post-hospitalisation cover in the market at 13 months, as well as a maximum claim limit of $2 million annually - the highest in the market. And as an added bonus, I would get Ting Yong, a Million Dollar Round Table (MDRT) holder from the Advisors Alliance Group as my financial advisor. A super nice and efficient friend, I have full confidence in his service and competency as my agent.
Critical illness policy wise, I decided to get the Aviva MyProtector Term Plan II, after some discussion with my second financial advisor Yong Shun from MoneyOwl, who has most patiently (and perhaps painstakingly) attended to my many questions throughout the whole process. Super nice and proficient, I fully recommend his service as well. Anyway, the plan in question is a term life plan and offers a term life benefit for death and TPD, as well as the option to add a critical illness rider (accelerated), and early critical illness rider (additional).
After much deliberation, I have decided to go with a critical illness coverage of S$1 million, and up to age 76 (So I have full cover until I am over age 75 since the policy will lapse when I hit my 76th birthday). I would also be tagging along $50k in early critical illness coverage since there is a discount. This $50k is also additional and non-accelerated, so it adds to my CI coverage amount as well. With the additional ~S$1 million in critical illness coverage, my critical illness coverage is now $1.6 million, and my early critical illness coverage is now $550k.
I decided to go for coverage up to age 76 only as I believe that critical illness 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 from now till 65 (or 70 since we are all living and working longer). By the time I decided to stop working, I should have already gathered sufficient retirement funds for my day-to-day expenses (not to mention my CPF life payouts as well), and critical illness coverage by then would no longer be as crucial for income replacement.
I will also not need the payout for my medical bills, as these would be covered by my hospitalisation plan already for all local treatment.
Purchasing the policy through MoneyOwl also means I am eligible to receive up to 50% rebate in the agent’s commissions. Steady lah.
With these new changes, my updated insurance coverage table now looks like:
Sweet. Till the next review. (:
[UPDATE - 8th April 2021] If you are also considering approaching MoneyOwl to get your insurance, you can use my referral code 3LCY-92WU to sign up an account with them. In the event you subsequently purchase an insurance policy from them, you would be awarded with $20 GrabFood credits. You can also potentially get up to $65 GrabFood credits in total if you also end up using other MoneyOwl's products and services such as Investment, Comprehensive Financial Planning and Will Writing Services. Note: Do also let the MoneyOwl's agent know that you were referred in so that he/she can inform their admin department to follow up. For more information about this, you can refer to it here. Disclaimer: I also get $20 GrabFood credits.
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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.