What do you look for in a medical insurance?

A client referred her friend to me as the friend plans to get a medical insurance and she know as an IFA, I am required to do the due diligence of comparing the different plans before recommendation. Her friend prefer this approach then to meet a tied agent and to be convinced that their company has the best plan.

We get to the topic proper after we settled down and she asked, ” What is the most comprehensive plan in the market?” In return, I asked her what does she look for in a medical insurance. She gave a list such as the plan should cover private hospital, pay as-charged, covers pregnancy complication and so on. I told her most plans cover that but they may varies in term of benefit. After a short silence, she ask me what I look for in a medical insurance. I replied, ” I just look for a plan that allows me to be hospitalised.”

She looked as surprised as some of you are looking now. What do I mean by a plan that allows me to be hospitalised?

I further explained that a deposit is required to be paid before the admission unless it is due to accident & emergency. The deposit can be paid using your medisave but you will have to pay the shortfall in cash if the deposit required exceeds the medisave limit. This is likely to happen if you are staying in a B1 ward and above, for e.g. A wards & Private ward. In the event that the patient is unable to pay the deposit, the hospital will usually suggest to them to downgrade to a lower ward or in the worse case, look for alternate help from the hospital or medifund. These process could take longer than we expected and that means no admission and treatment till you settle the deposits. My point is settle the deposits, get treated then you worry about the final bill!

What is the use of a medical plan if you cannot even get yourself admitted? For this reason, I strongly encourage the use of Letter of Guarantee(LOG). The LOG serves as an assurance of payment offered by insurers to hospitals, on behalf of a patient, for the portion of the hospital bill covered by insurance.  You can reduce the amount of your upfront payment  to the hospital and in most cases, there is no payment as the insurer technically act as the guarantor. What this means to the patient are the deposit is settle, you get treated and you don’t have to worry about the final bill if your plan is one of  ‘As-charged’ nature.

There is currently 3 companies that issue these LOG to the policy holders and they are

  1. Aviva
  2. NTUC Income
  3. Prudential

NTUC Income and Prudential issue LOG only to Government Restructured Hospitals and Institutions like

  • Alexandra Hospital
  • Changi General Hospital
  • National University Hospital
  • Singapore General Hospital
  • Tan Tock Seng Hospital
  • Khoo Teck Puat Hospital

Aviva is only one insurer that issue LOG to the above hospitals and private hospitals such as Parkway East Hospital, Mount Elizabeth Hospital and Gleneagles Hospital.

If you are planning to switch your current plan to Aviva, take note that you may be subjected to medical underwriting and put you in a less advantageous position due to your medical condition. Therefore, it is encourage to speak to a financial advisor before making any changes.