Bypass Surgery Costs Health Minister only $8!

“In my recent bypass surgery, my hospital bill was largely paid by MediShield and a private Shield supplement. Medisave took care of my co-payment of the bill. My out-of-pocket expense for the hospital bill was $8 only; yes, no typo here.” Khaw Boon Wan


Unbelievable? Even Singapore's Health Minister sees the importance of having a private-integrated shield plan to supplement his Medishield.

Don't Leave Retirement to Chance

More and more Singaporeans are facing the grim reality of retiring later or lowering their lifestyle expectations when they call it a day. This is because they have not planned or failed to plan early enough for their retirement.

The fact is a majority of Singaporeans are unprepared for retirement. And ignorance is not bliss here.

Here are some factors to consider when planning for your retirement:

1. Retirement age

For a start, determine the age you hope to retire. The earlier you do this, the more time you have to plan and to adjust to or accommodate any hiccups along the way. Having this number in view is important as you can then project the savings you need at the start of retirement.

2. Years in retirement

Life expectancy has increased. In Singapore females have an average life expectancy of 83 years and men 78 years. You should also take your family’s medical history into account. The longer we live, the more resources we will need. The worse scenario is to outlive our resources and have no one to depend on.

3. Income needed in retirement

Most people think they will spend much less during retirement. But with plenty of time on your hands, you would not be sitting at home and not be doing anything. This is after all your golden years and you want to be able to enjoy the fruits of your labour. Giving yourself a retirement income that is 70 per cent of pre- retirement income is reasonable. To go any less would mean that you have to live a simple, even frugal lifestyle.

4. Consider inflation

Inflation is the increase in the general price level of goods and services. It can affect the purchasing power of your money. For example, with an inflation of 3%, $1,000 today will only have a value of $642 in 15 years’ time. Do not overlook this as you would not want to suffer from a shortfall during retirement.

5. Financial commitments

Consider what your likely monetary commitment would in retirement. Would your house be full paid off by the time you retire? Would you need to support your children in their tertiary education? Are your parents dependent on you? Thinking through would enable you to have a clearer picture of your retirement needs.

6. Medical expenses

High medical costs in your later years can leave you financially drained, jeopardizing your retirement. Therefore, it is highly advisable that you consider a comprehensive medical insurance plan. In this respect, when working out your retirement income, do remember to include the premiums of medical plans and other insurances that you would be paying beyond your working years.

7. Leaving a legacy

If you wish to leave an inheritance to the next generation or bequest an amount to a particular charity, this would also affect the way your retirement portfolio is structured. In either case, you would need to make provisions to ensure that the earmarked assets would not be drawn down as your retirement income.

8. Existing assets

Consider your existing assets and any future income streams when working out your retirement numbers. You can, for instance, project the value of your CPF. When in doubt, be conservative in your projections.

Investing in equities is still the preferred option to beat inflation. Equities tend to produce positive returns over the long term. Another instrument that you can consider is annuity which provides a constant stream of income for life.

Two things to remember when investing for your retirement:

• Never put all your eggs in one basket.
• Do not risk more than what you can afford to lose.

Can You Afford to Retire?

Why the need to plan NOW?

Singaporeans are living longer, thanks to the advancement in medical science and the standards of medical care in Singapore. Life expectancy of women is now 83 years old and for men, it is 78 years old.

With this longevity comes a problem – we could outlive the resources that we have in our retirement years.

A startling result from a new survey by global financial services firm Russell Investments revealed that half the working Singaporean population has yet to make financial plans for retirement even though 3 in 5 wish to retire by age 60. This is just 2 years shy of the statutory retirement age of 62. This survey was done with 500 fully employed Singaporeans aged 35-55 for their views on security in retirement (Business Times 23 April 2010).

In another study by HSBC, it found that 91 per cent of Singaporeans do not have any idea what their retirement income would be and only 9 per cent are prepared for this phase of their life (The Sunday Times, 2 August 2009).

This reflects a lack of awareness of the importance of planning for retirement and the social, emotional and physical impact of working longer. The amount is bigger than you think!

To give you an idea how much one would need in their later years:

Take for example – Mr & Mrs Lim are age 35 now and they both wish to retire at age 55. Combined, they estimated they would need a monthly income of $3,000 (in today’s dollars). Using an inflation rate of 3%, the monthly income would swell to $5,418 in 20 years’ time. And with a retirement duration of 25 years, their retirement funding works out close to $1,100,000.

And, may I add, this is assuming a simple lifestyle with perhaps a regional vacation once a year, no spending on luxury items and eating at restaurants not more than 2-3 times a month. The amount needed in retirement is a lot bigger than we think! Like it or not, you got to be a millionaire to retire.

Another alarming finding from the survey showed that:

• The average age Singaporeans start to embark on retirement planning is 59
• Only 40 per cent plan to develop a comprehensive retirement plan
• 20 per cent plan to consult a professional financial adviser
• A majority of the respondents replied that their financial preparations include setting aside fixed savings, CPF and purchasing medical insurance.

In a report by Straits Times dated June 2007, it said that only 4 in 10 active CPF members – those earning an income and who turned 55 in 2005 – had the Minimum Sum of $90,000 in their CPF at end of 2006.

Some questions you need to ask yourself:

• Do you think savings & CPF are enough for one’s supposedly golden years (after showing you the calculation above)?
• Are you willing to compromise on your retirement lifestyle and live on a lower income?
• Do you intend to continue working beyond age 62?

If the answer is ‘no’, my friend, the key then is to start retirement planning early.

The 20 something’s think they’ve still got time to plan for retirement so they postpone this aspect of financial planning often to when they’re in their 30’s. In my observation, the mid 30’s is the time when most people, in the midst of paying for a property and saving for children’s education, start to give some thought to their own golden years.

Remember, time is your friend. The earlier you start, the higher the chance that you’ll be able to achieve your retirement goals.

The Weakest Link in Your Insurance Program - Disability Income Cover

Why is Disability Income Protection So Important?

I'm sure you'll agree that our wealth accumulation plans and risk management goals hinge on our ability to earn an income and actively contribute to them.

And a disruption of our income generating ability need NOT necessarily be due to either one of the 30 critical illnesses or total and permanent disability (TPD).

For example, orthopaedic-related, psychiatric issues and rheumatological conditions are not classified under critical illnesses or TPD. And these conditions can be debilitating enough to stop you from working.

Truths:

• 1 in 3 workers will become disabled for a period of 90 days or more before age 65 (source: Commissioner's Individual Disability Table A)
• The average disability absence is 2 ½ years (source: Commissioner’s Individual Disability Table A)
• 3%-4% of Singaporeans are estimated to be currently disabled and unemployed 1 in 7 workers will be disabled for 5 years or more before they reach 65 (source: http://www.stretcher.com/stories/9907261.cfm)

The impact of this disability is a loss of income, and even if you can return to work it may be to a lower paid job due to some level of ongoing disability or illness. This is the real disability cover you need to look into.

But you may ask: I am already covered, aren't I?

Many people believe they are already covered for the risk of disability. Let's look at the common misconceptions:

1. I have a policy that covers me for Total & Permanent Disability (TPD)

This only covers very severe and permanent disability. I suggest that you read the fine print definition in your policy document to understand under the circumstance under which you can make a claim. Some policies state that you need to have your limbs amputated before the insurer pays you. And it must be a pair of limbs (one leg, one arm or both legs/arms)! How often do you think this happens?? TPD protection is useful to have but falls well short of the real disability cover required.

2. I have a Critical Illness policy

Critical illness policies only cover a specific number of illnesses, usually 30. Critical illness policies work well to provide a lump sum in the event of a critical illness. But it falls short of the real disability need too.

3. I have medical insurance

Medical insurance and MediSave can help you pay your hospital and surgical bills but they do not replace your income.

4. My employer will pay me

Most employers define how long you will receive your salary in the event you are unable to work. In Singapore, this is often between 1 and 3 months, and again falls short of the real disability need too.

5. My savings or my family will help

Yes, of course you can rely on your savings or your family, provided there are sufficient funds available and you feel comfortable doing this. Unfortunately, most people do not have enough savings and most do not want to be a financial burden upon their families.

So, what can you do about it?

1. Worry

2. If option 1 is not acceptable, then you need to consider a Disability Income Plan that takes care of this gap in your protection program.

Disability Income Plans

These are specifically designed to protect against disability and will offer income replacement of around 75% of your regular income.

These plans tend to offer flexibility to meet varying needs. Hence, such plans are taken as a "standalone" plan. The rationale for this is that your need for disablilty protection is long term - if such protection is bought as a "rider" to a basic savings plan, you may find yoruself without protection if you decide to stop savings.

Hence, keep your options open and take a standalone plan.

A Big 'C' to Reckon With

Singaporeans are familiar with the 5 ‘C’s – condo, club membership, cash, credit card and car. Now, there’s another ‘C’ that is making headlines in the media here. You guessed it - it’s Cancer.

Some startling statistics from the Singapore Cancer Society:

• 1968-1972 – 12,000 cases (incidence rate of 135 per 100,000 males & 103 per 100,000 females)
• 1998-2002 – 38,000 cases (incidence rate of 231 per 100,000 males & more than double for females to 240 per 100,000)
• Sharp rise attributed to the dramatic increase in breast cancer in women and colorectal cancer in both sexes

On 6 March 2010, The Straits Times did a special report on Chinese and Cancer. The cover photo is a lady by the name of Mrs Cynthia Fong, age 55 and she suffers from breast cancer. The shocking part is this – her ‘target’ drug Herceptin costs $4,000 per shot and she needs a total of 17 shots. That works out to a whopping $68,000 just for drugs alone!

Cancer treatment, which can cost tens of thousands of dollars, can easily drain one’s medisave savings as well as wipe out the accounts of one’s spouse and family members’. Medishield insurance can be used but there are limits.

Mrs Fong has emptied the bulk of her own and her husband’s medisave, health insurance schemes and family’s savings.

The price tag for Mrs Fong’s new lease of life so far is $100,000 and she still has yet to fork out at least $30,000 more for her shots.

There would be additional treatments and medical expenses after Mrs Fong is discharged from hospital. Realistically speaking, the total bill is highly likely to be more than $130,000. And this is only over a period of 12 months.

Cancer is not a cheap affair, not to mention the emotional and physical trauma that one must endure during and after chemotherapy.

Solution to high medical costs

In Mrs Fong’s case, it seems like she did not own a medisave-approved enhanced shield plan that has ‘as charged’ benefits.

When one has an ‘as charged’ plan, treatment costs, consultations, surgical benefits, daily room and board etc. are charged as per the bill, subject to the yearly claimable limit. For example, the best plan, Plan 1 (any private ward), from Aviva has a yearly limit of $500,000.

It does not cost an arm or a leg to be covered under a comprehensive medical plan.

To give you an idea of what the premiums are like with one insurer:

Age 1-30 - $158.55

Age 31-40 - $241.28

Age 41-45 - $446.70

Age 46-50 - $481.46

You may withdraw up to $800 (for insured person below 81 years old at age next birthday) per insured person per year or $1,150 (for insured person 81 years and above at age next birthday) per insured person per year.

With continuous enhancement to medisave-approved shield plans, the deductible and co-insurance portions can also be fully covered by riders. When you have these riders, you are effectively covered 100% by the insurer - this means you are reimbursed in full without forking out a single dollar.

Why wait when you are healthy?

There is no reason to hesitate getting yourself covered by a comprehensive hospital and surgical plan.

My recommendation is to get the best plan which gives you access to private hospitals. Private hospitals have its privileges – prompt attention, shorter waiting time and reduced agony over availability of beds (as compared to restructured/government hospitals).

As this type of plan could potentially cover huge hospital bills, pre-existing conditions are almost always excluded unless declared and accepted by the insurer.

Aviva’s moratorium underwriting is the first in the industry. This gives people with pre-existing conditions a chance to be covered for their existing conditions.

What this means is that during the period of 5 years of continuous insurance from the date of commencement of the cover, if the insured person has not, in relation to the pre-existing condition experienced symptoms or sought advice or tests from a specialist, physician or alternative medicine provider or required treatment or medication, Aviva will cover that pre-existing condition.

Give yourself and your loved ones the best gift you can, and that is not to be a financial burden when you have an illness.

Female Illnesses - The Men Don't Get It!

It’s a known fact that women generally tend to outlive the men. In the Singapore context, women live an average of 83.2 years vs men at 78.4 years (Source: Health Facts Singapore 2008). This is good news for women but this genetic make up also puts them at a higher risk of diseases, specifically female related illnesses.

Facts:

• From 2003 to 2007, on average, about 2046 female Singapore residents are diagnosed with breast cancer annually. That translates to 5.6 cases per day.
• Among the top 5 female cancers, Breast, Ovary and Uteri cancers are ranked 1st, 4th and 5th place respectively. (Cervical cancer is ranked 6th)
• Systemic Lupus Erythematosus (SLE) occurs 10-15 times higher in females than males.
• Rheumatoid arthritis hits women 3 times more than men.
• 70% of Chronic Auto-immune Hepatitis cases occur in women
• Osteoporosis hits 1 in 3 or 4 females over age 50

A comparative look at historical statistics revealed a rise in the incidence of breast, cervix, ovary and uteri. For instance, between 1993-1997, there were 3,574 breast cancer cases. For the same 5-year period between 2003-2007, the incident rate for breast cancer went up to 6,798. That is close to a 50% jump!

Carcinoma-in-situ vs Cancer

When we talk about cancer, we need to first understand the difference between Carcinoma-in-situ and Cancer.

Carcinoma-in-situ refers to a pre-malignant stage without invasion of the cells. As for cancer, it points to the presence of malignant tumours where there is abnormal and uncontrolled growth of cells and evidence of invasion of cells.

A plan which covers critical illness covers cancer. A female illness cover, on the other hand, covers both carcinoma-in-situ as well as cancer.

Other Special Needs of the Woman

Motherhood and maternity, plastic reconstructive surgery due to accidents and burns, medical procedures on female organs and annual routine medical check ups are also special concerns of the females.

In the competitive marketplace, there are a few insurance companies that offer female illness cover. Some come in the form of standalone plans whereas others are riders to basic plans.

With a plethora of options in the market, which female illness plan is most suitable for your needs?

What to look out for in a Female Illness plan

• Check if it covers carcinoma-in-situ stage of major female illnesses
• This is one of the key differences between female illness cover versus normal critical illness cancer. A female illness plan allows for claims even at early stages.
• Pay attention to the number of sites the plan covers i.e. 1 or 2 sites for some and others 6 sites
• Look out for coverage of specific illnesses that females are prone to
• A free medical check up (usually bi-annual) would be useful
• Maternity cover – this benefit covers pregnancy complication and congenital anomalies. It is mostly optional and it comes at a substantial cost. If you have a Shield plan that reimburses for these, then this may not of importance to you.
• Female surgical procedures reimbursement – if surgical procedures are required and done in a hospital, then this can be taken care of by your Shield plan.

In conclusion:

• Get yourself covered with a female illness plan now before it is too late
• Protection is an investment and it is one of the best forms of leverage for your money
• Ensure you have adequate critical illness coverage in place (If you do not know what is your ideal coverage, seek professional help.)
• Lead a balanced lifestyle – pay attention to your physical, mental and emotional health
• Spend quality time with yourself and with your loved ones; cherish the blessings you have been given
• Go for a health screening every year

Fool-proof Medical Insurance Reduces Stress

What is Medical Insurance

With medical care costs escalating steadily, you need to protect your financial health should you be hospitalised as a result of an illness or accident.

Medical insurance or health insurance is perhaps one of the most overlooked area in financial planning. And many people do not realize that a hefty medical bill can potentially derail their financial plans overnight. For example, a heart angioplasty at National Heart Centre would set you back between S$21,000 and S$31,000.

So, do you have a fool-proof medical insurance plan in place?

Since the introduction of medisave approved integrated private shield plans, we are spoilt for choices. An enhanced plan has 'as charged benefits' instead of sub limits for each category of medical expenses. Besides the usual room and board, surgery, doctor's fees and treatments etc, other benefits available with such plans include confinement in community hospitals, pregnancy complications, congenital conditions, letter of guarantee and benefits for major medical transplant.

What to watch out for

Every life insurer would offer medical insurance solutions. A medical plan is made of 2 parts: 1) the basic plan and 2) the rider. There are full riders and there are partial riders. A full rider covers the deductible (up front payment, depending on the ward class) and co-insurance (10% of the balance of the bill after deductible). On the other hand, a partial rider covers only the co-insurance portion. Hence, it is expected that a full rider will cost more than a partial rider.

Besides the riders, the plan type will dictate the level of benefits. In choosing a plan, be sure to go with one that covers your health concerns.

How we help you

So, how do you then select from the plethora of options in the market? Do you have the time and energy to meet up with different insurers to understand their plans?

If the answer is no, then you would be better off consulting a professional financial advisor who has access to the different solutions available in the market. He or she would be able to highlight the differences between each plan and advise on a plan that best fits your needs.

We go through a structured questionaire with our clients to get them thinking about their requirements for health care. Our recommendation will be based on their responses to the questions.

We have counselled many who have pre existing conditions and advised what is best moving forward to ensure that they get cover for other conditions. As a rule of thumb, insurers exclude pre-existing conditions altogether. However, Aviva is the only insurer that has moratorium underwriting v/s full medical underwriting. Aviva’s moratorium underwriting is the first in the industry. This gives people with pre-existing conditions a chance to be covered for their existing conditions. What this means is that during the period of 5 years of continuous insurance from the date of commencement of the cover, if the insured person has not, in relation to the pre-existing condition experienced symptoms or sought advice or tests from a specialist, physician or alternative medicine provider or required treatment or medication, Aviva will cover that pre-existing condition.

The type of medical insurance you have can either make or break your financial plans.

Consult a professional financial advisor before you make the purchase. One wrong move and you could lose your insurance coverage completely.