Are You Adequately Insured?
By Stephen Mok
IPP Financial Advisers Pte Ltd
My friend called me today to tell me that one of his friends had a motorcycle accident sometime back. He fell off his motorcycle and injured his head seriously. Fortunately he survived the accident but unfortunately, he lost his memory!!!
Now he is recuperating at a community hospital in Ang Mo Kio (Singapore) as he cannot stay too long at Tan Tock Seng Hospital, which is a restructured hospital.As the sole bread winner of his family with two kids, he is now unable to support them.
Who knows how long he will need to stay in the community hospital.
As an independent financial adviser, immediately the issue of insurance payout and the survival of his family sprung into my thoughts….
1) Will his Private Medishield plan pay for all his hospital bills?
2) Will his Life Insurance Critical Illness Policy pay a lump sum of money for his medical related expenses outside the hospital?
3) How long will his company keep him under their payroll?
4) How long will his savings last, now that he is completely unable to work due to his loss of memory.
5) Can his wife get a job as soon as possible? What will happen to her children while she is at work?
6) Who is going to pay the community hospital bills when the family’s CPF Medisave funds run dry?
7) Who will pay for the children’s school fees, meals in school, school books etc….. will the kids fall into bad influence without proper parental guidance?
I will answer Q1 and Q2, as for the rest of the questions, his poor wife will soon find out.
Q1) It depends on which company he bought the Private Medishield Plan from. Only 2 companies cover the cost of staying in a community hospital as of today. Most cover expenses for stays in restructured and private hospitals only.
Q2) No, his life insurance critical illness plan will not pay a lump sum to him as loss of memory is not a critical illness. Yes, I am afraid when the premiums are not paid the policy will terminate.
So is there an insurance policy that will pay?
Yes, this is called a disability income policy where the insurance company will pay when the person insured cannot do his work after an illness or accident. He will be compensated a portion of his pay. If he should recover partially, but cannot get back his job or a similar paying job due to his disability, he will still get a pro rata payment till an age he had specified when he bought the policy, for example age 50, 55, 60 or 65.
Details of which I will not elaborate unless you request from me.
Most of us are busy trying to build up our bank accounts before we retire. Do you have Plan-B, just in case you are stopped from achieving your goals by an illness or a serious accident?
Most Singaporeans already have at least two insurance polices but most have less than $100,000 of insurance coverage. Just ask yourself, how long will your insurance payouts last? One year, two years? Is your family’s lifestyle going to be compromised because you failed to plan?
So, are you adequately insured?
If you want a no obligation review, please contact me.