While Singaporean kids are covered by Medishield Life, some parents prefer to buy a private health plan, too.
Hayley Pereira’s son, Conor, underwent surgery to remove his oversized tonsils and adenoids recently. The tissues were affecting the way fluid drained from his ears and as a result, he suffered from sleep apnoea and had difficulty hearing.
The cost of the surgery in October last year came up to $18,000. Thanks to the insurance policy they had taken out for their now two-year-old boy, as well as their Medishield rider, Hayley and her husband did not have to pay a cent.
“Good thing we had the insurance and rider or we would’ve had to fork out that five-figure sum,” says Hayley, who also has a four-year-old daughter.
“We have an investment-linked plan and spend about $250 a month on insurance premiums for our kids. The policy covers critical illnesses, hospitalisation and death, but not congenital illnesses,” she says.
“Children are more likely to fall sick and get into accidents, so it made sense to purchase insurance to cover them in case something happened and their medical bills turned out to be exorbitant.
“My husband and I purchased the Medishield rider before the Government changed the rules, so that we wouldn’t have to worry about paying a down-payment when choosing a private hospital.”
Isn’t Medishield Life enough?
You may wonder: Why would you need additional insurance when the Government gives Medishield Life coverage to every baby who is a Singaporean or permanent resident?
This scheme provides reimbursements for hospitalisation expenses incurred within certain limits, such as up to certain hospital and ward types. There are also on the surgical procedures undertaken. You can also use Medisave to pay for your kid’s medical bills.
Medishield Life protects your kid from large hospital bills and certain costly outpatient treatments, such as dialysis and chemotherapy for cancer, explains Daniel Lum, director of Product and Marketing at Aviva Singapore.
Medishield Life pay-outs are pegged at B2/C-type wards in public hospitals, so if you want to opt for a higher-class ward for your child, you may choose to buy a Medisave-approved Integrated Shield plan (IP), which can be paid for with Medisave. Daniel adds that IPs are by far the most common plans for Singaporeans.
However, while IPs provide reimbursement in case your child gets hospitalised, they don’t cover outpatient costs or any other expenses incurred, says Juliet Khew, managing director of Health at AXA Insurance. This is why you may wish to purchase additional health insurance for Junior. With a health insurance plan, you get income relief – a benefit that isn’t covered by IPs.
This plan or that plan?
Most financial experts would agree that it’s worth buying health insurance for your child, but with so many types of plans available in Singapore, it can be difficult deciding which to get.
Typical health insurance plans work by reimbursing medical expenses such as hospitalisation, surgery and treatment for chronic or critical illnesses and accidents.
According to Juliet, there are plans that provide outpatient cover for visits to general practitioners and specialists, and those that offer coverage for hospitalisation and surgery.
If you want coverage for more serious medical conditions, you can opt to purchase critical illness cover for your child – either by buying a standalone critical illness plans, or a rider to a whole life plan, for instance.
You may also want to check if your own critical illness plan can extend coverage to your kid for a small fee.
Or, if you have company-related health insurance coverage, find out if it can also cover your kid (this would depend on the company’s group insurance policy).
Before you buy
It’s important to understand the level and type of coverage you are looking for, as well as the types of plans available, Daniel says.
“For example, you should check for coverage against your requirements, including prescription drugs, treatment for chronic conditions, specialist consultations and emergency care.
Think about the quality of healthcare you want your child to receive. Look for a plan that lets you claim the maximum limit for the type of hospital and ward you prefer, Daniel suggests.
In addition, medical expense plans such as IPs typically have “deductible” and “co-insurance” features.
A deductible is the initial portion of claims made in a year that the policyholder needs to pay for, before receiving any claims payout.
Co-insurance is the percentage of the claims that the policyholder co-shares with the insurer. These features help keep IPs affordable by sieving out small claims and prevent abuse of the coverage by the insured.
“You should weigh your out-of-pocket costs against the premium for the insurance plan,” Daniel advises.
“If the concern is to reduce out-of-pocket medical expenses, you may wish to purchase riders to cover the co-insurance and deductible portions.”
Insurers also offer various discounts – these may be based on the number of family members you want to cover, or if you (the policyholder) want coverage for your child, for example.
Find out more about these discounts, as you could save quite a significant amount of money in the long-term. You should also do your own research and speak to your financial adviser so that you select the right heath insurance plan for your child.
What to ask your agent
Before buying a health insurance plan, Juliet recommends that you ask your agent questions about coverage, such as:
• When you can start covering your child
• How much coverage you should buy
• What kind of coverage is included in the plan, and
• If common illnesses, like hand, foot and mouth disease, dengue fever or food poisoning and congenital illnesses are included.
“You should also find out if there is a waiting period before your child can be covered and if there are any policy exclusions,” she adds.
“In cases where you choose to cover your child, with you (the parent) listed as the policyholder, you should find out if your child’s plan will still continue if something happens to you as the policyholder, and if there are any waivers of future premiums.”
The best time to buy
Ho Lee Yen, chief customer and marketing officer, AIA Singapore, advises you to buy a health insurance plan for your child as early as you can.
“Medical underwriting is required when purchasing health insurance. So, there is a risk of not being covered for pre-existing conditions developed at a later age or being charged a higher premium due to loading fees.”
You can even buy a plan before your little one is born, says Juliet.
With a prenatal plan, for example, mums may even be able to secure life coverage for themselves and their child from as young as 16 weeks of gestation, including protection against congenital illnesses.
“The added benefit of purchasing a maternity plan is that after your child is born, the life coverage (often death and critical illness) can be transferred to your child without the need for medical underwriting,” Juliet adds.
What isn’t covered
It’s not just pre-existing conditions that aren’t generally covered; health insurance plans for children also do not cover these:
• Routine eye and ear examinations
• The purchase of spectacles, contact lenses and hearing aids
• Dental work (except due to accidental injuries), and
• Elective procedures and conditions of newborns due to pregnancy complications.
Such plans also typically don’t cover common cough and cold. But your kids could possibly get coverage for these ailments through your group insurance plans, Daniel says.
Other types of child insurance in Singapore
Some parents feel that life insurance is unnecessary for kids since they do not have any income that needs replacing.
But Daniel Lum of Aviva says that you can consider buying life insurance as a gift for your child when he is young and more insurable.
At the same time, life insurance premiums increase with age, so your kid will reap the benefits of lower premiums in the long run.
Plans for specific children’s diseases
These offer coverage against specific diseases, but they operate differently in that they typically pay out a lump sum upon diagnosis of those diseases.
Some may even include reimbursement for hospitalisation expenses for the specific diseases, but the amount of cover is usually limited.
These plans may be a good supplement, but they generally don’t replace the coverage of a typical health insurance plan, Daniel says.
Personal accident plans
These can help prevent emergency out-of-pocket expenses, Daniel says. Such plans cover accidental death and dismemberment, and medical expenses for accidental injury.
This plan would allow you to set aside a desired amount towards your child’s university fund.