The Need to Secure your Eldershield Supplement

We all have the option to use our medisave money optimally - that is to secure ourselves with the best medisave-approved hospital and surgical plan (shield) plan and eldeshield supplement. When we are covered with higher benefits, the impact on our cash flow is largely reduced than when we are not.

Eldershield is a severe disability scheme that provides a monthly payout. It is for people age 40 and above and is an opt-out program. It is also referred to as long term care as the benefit payout can span throughout one's lifetime.

The benefit is nothing to shout about - it is either $300/month for 5 years or $400/month for 6 years (applicable for those who turned 40 after September 2007).

The criteria to qualify for the benefit is when one is not able to perform any 3 out of the 6 activities of daily living (ADLs). These are:

• Washing
• Feeding
• Dressing
• Toileting
• Transferring
• Mobility

The question is: Is $300/mth or $400/mth enough when you are disabled for an indefinite period?


Risk factors that you need to be aware of:

• Singaporeans are living longer but will spend 8 years in ill health or disabled (3 Dec 2007, The Straits Times)
• Younger people are getting old people's diseases (16 Mar 2010, The Sunday Times)
• The number of cases for dementia will more than double to 45,000 by 2020 (4 Mar 2010, The Straits Times)
• Incident rate for common illnesses leading to long term care:
  - heart disease - 23.6% (MOH 2009 statistics, principal causes of death)
  - hypertension - 24.9% (MOH 2004 statistics, disease burden among 18-69 years)
  - cardio vascular diseases - 8.0% (MOH 2009 statistics,principal causes of death)
• Based on the experience of other advanced countries, such as the UK, men and women have a 35% and 45% chance of them being disabled in their lifetime respectively (source: MOH website)

Rising costs of medical care is a MAJOR concern:

• Cost of hiring a maid - close to $1000/mth!
• Cost of private nursing home ranges between 3-figure to 4-figure sum per month (go to MOH website for more detailed information)
• Miscellaneous costs of medical aids, treatments, alternative therapies, supplements

I have come across people who give various excuses for not doing so:
1. They feel that they don't need it now as they are healthy (can you tell for how long?)
2. They want to wait till they are older (who can guarantee that you can still qualify for cover?)
3. They want to conserve their medisave (to serve what purpose?)

By the way, do you know you can only do 3 things with your medisave?
1. Withdraw it based on the daily specified limit for hospitalization and certain conditions if you do not have a hospital & surgical plan
2. Use it to enhance your hospital & surgical plan and eldershield benefits
3. When you die, your beneficiaries will 'inherit' this money

Let's not be penny wise pound foolish.  It is the right thing to do to upgrade your eldershield plan.  Do it for yourself. Do it for your loved ones.

Read more about Aviva's MyCare Plus, the new enhanced Eldershield plan that was recently launched in my next blog post.

Eldershield Supplement

Overview

Eldershield is a severe disablity assistance scheme to help individuals cope with the financial demands of a disability.

Singaporeans and PRs aged 40 with Medisave accounts will be automatically included in the scheme unless they opt out of it. The plan pays out when one is unable to perform 3 out of the 6 activities of daily living, namely feeding, dressing, mobility, transferring, toileting and washing.

A fixed monthly benefit is payable up to a fixed number of years. Premiums can be paid using Medisave or cash (can be deducted from Medisave accounts of spouse, children, grandchildren or parents).

Features

1. Lifetime Cover

2. Guaranteed Renewable

3. Worldwide Coverage

4. Tax-Free Cash Payout (use it anyway you like)

5. 90-Day Deferment Period

6. Waiver Of Premiums

Eldershield Reform 2007

This reform took place in September 2007. Key revisions were:

• Cash benefit increased from $300 to $400 per month
• Maximum benefit payout duration extended from 60 months to 72 months
• Introduction of Eldershield Supplements (available from Aviva, NTUC Income & GE)

Eldershield Supplement 2007

This was introduced because a $300/$400 benefit per month is not going to be sufficient for medical care and related expenses. The supplement covers a higher monthly cash benefit; the range is from $800 to $2,000. A maximum of $600 can be used from Medisave account to pay for the supplement premium. Any balance above $600 will be paid with cash.

Competitive Analysis - The Straits Times, 10 November 2007

“… rehabilitation benefit ... Only Aviva offers it as part of its plan. This is useful as a person who is severely disabled now could get better later given medical advances"

"But its 10 years' coverage is a limitation, the experts said. They prefer Income and Aviva's lifetime coverage."

"Another factor in Aviva's favour is that it gives rehabilitation benefit at premiums which are not much more ..."

"... an example of a 40 year old man who wants to get $1,000 a month for life if he becomes disabled ... An Aviva basic plan and supplement costs $695 a year until premiums no longer have to be paid at age 67 or $501 a year."

"An Income set of plans cost $860 a year till age 65. A GE set costs $549 per year, but coverage lasts for only 10 years."

Should You Wait Till You're Older?

You may think you can defer getting the Eldershield supplement till when you're older, say in your 50's. Think again.

The chances of severe disabilities increase sharply as we age. Based on the experience of advanced countries, men and women have a 35% and 45% chance of being disabled in their lifetime respectively (Source - MOH). Illnesses, accidents and frailty are all common reasons for temporary or long term disability.

Since the launch of Eldershield in 2002, in a 4 short year span, there were 2,366 claims paid out by Eldershield and 7,183 by the IDAPE scheme (those who do not qualify for Eldershield and age 70 and above)(Source - MOH Eldershield Experience Study 2002-2007).

Given a Singaporean's lifestyle and high living standards, the ability for one to stop work to look after a disabled family member over the long term is considerably very low.

When you're healthy, get the best that money can buy to cover you.

Opinion

Aviva Mycare is currently the most competitive Eldershield Supplement program in the market.

It is very affordable. It has the most comprehensive benefits. Another piece of good news - you use the interest from your Medisave to pay for the supplement and the principle stays intact.

Resource

If you wish to learn more about Eldershield and how you can increase the monthly benefit, give me a call at 9873 1075 or drop me an email.

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.

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.