Reduction in Home Protection Scheme Premium from 1 July 2018

Home Pro­tec­tion Scheme (HPS) is an term-redu­cing mort­gage insur­ance man­aged by CPFB that will help HPS mem­bers to pay off the hous­ing loan in the event of death, ter­min­al ill­ness or total per­man­ent dis­ab­il­ity. It insures mem­ber up to 65 years old or until the loan is paid up, whichever is earli­er.

510,000 CPF mem­bers will pay less for their Home Pro­tec­tion Scheme (HPS) premi­um from 1st July 2018 onwards, when their insur­ance is due for renew­al. This will bene­fit 95% of the HPS mem­bers, with three quar­ters of them get­ting reduc­tion of at least 10% from their exist­ing premi­ums. The last reduc­tion in HPS premi­um was done in 2012.

Just to recap, CPF mem­bers have to be insured under HPS if they are using CPF sav­ings to pay for the hous­ing loan for their HDB flats. How­ever, they can choose to buy mort­gage insur­ance from private insurer as long as they can ful­fill the cri­ter­ia man­dated by CPFB. Vis­it HPS web­site to find out more.

 

MediShield Life and Integrated Shield Plan

The MediShield Life Review Com­mit­tee has just released the recom­mend­a­tions on the enhanced bene­fits to the cur­rent MediShield. The changes are as fol­lows:-

a) Remove the life­time claim lim­it of $300,000;

b) Remove the cov­er­age age lim­it of 90 years old;

c) Uni­ver­sal cov­er­age for all, includ­ing pre-exist­ing con­di­tions;

d) Increase the policy year claim lim­it from $70,000 to $100,000;

e) Increase the daily claim lim­its for nor­mal wards from $450 to $700 and ICU wards from $900 to $1,200;

f) Increase the claim lim­its for sur­gic­al pro­ced­ures from $150-$1100 to $200-$2000;

g) Increase the daily claim lim­its for com­munity hos­pit­als from$250 to $350;

h) Sub­stan­tially increase the claim lim­its for out­pa­tient can­cer chemo­ther­apy and radio­ther­apy treat­ments, to bet­ter cov­er the cost of sub­sid­ised can­cer treat­ment;

i) Lower co-insur­ance rates from the cur­rent range of 10–20% to 3–10%;

Co-insur­ance Cur­rent MediShield MediShield Life
Claim­able Amount
$0 — $3,000

20%

10%

$3,001 — $5,000

15%

10%

$5,000 — $10,000

10%

5%

>$10,000

10%

3%

Out­pa­tient Treat­ments

20%

10%

j) Start premi­um rebates earli­er from age 66, instead of age 71

The addi­tion­al costs arising from the expec­ted high­er claims from those with pre-exist­ing con­di­tions will be shared across those with pre-exist­ing con­di­tions, the exist­ing insured poli­cy­hold­ers, and the Gov­ern­ment. Those with pre-exist­ing con­di­tions will pay high­er premi­ums at an addi­tion­al 30% for a peri­od of 10 years, in view of high­er risks. The premi­um increase for the remain­ing poli­cy­hold­ers as a res­ult of uni­ver­sal cov­er­age should be no more than 3% from cur­rent premi­ums.

The private Integ­rated Shield Plan (IP) con­sists of two parts – the basic MediShield plan and a top-up por­tion. As an Integ­rated Shield Plan poli­cy­hold­er, you enjoy the com­bined bene­fits of MediShield, which is run by CPF Board, and the enhanced bene­fits of the top-up por­tion, which is run by your private insurer. When imple­men­ted, MediShield Life will replace the cur­rent MediShield por­tion of your IP.

Because MediShield Life will provide cov­er­age for all pre-exist­ing con­di­tions, you will also enjoy the MediShield Life cov­er­age, for life, includ­ing for any pre-exist­ing con­di­tions that you may have. This will apply even if the con­di­tion is excluded fromthe top-up cov­er­age by your Integ­rated Shield insurer.

As the admin­is­trat­or of MediShield Life, the CPF Board will assess all claims from the IP poli­cy­hold­ers and make pay­outs accord­ing to the MediShield Life bene­fits. The CPF Board will for­ward MediShield Life pay­outs to the private insurer, who will com­pute its share of cov­er­age and then provide the com­bined pay­out to the hos­pit­als dir­ectly.

All Integ­rated Shield Plan poli­cy­hold­ers will also receive cov­er­age for life under MediShield Life. Because Integ­rated Shield Plans premi­ums include a MediShield com­pon­ent which will become MediShield Life in future, eli­gible IP poli­cy­hold­ers will also receive sub­sidies from the Gov­ern­ment to help pay for part of their MediShield Life premi­um.

When MediShield shifts to MediShield Life, the premi­um for the MediShield por­tion will increase due to the MediShield Life changes. Hence, the over­all premi­um for Integ­rated Shield Plans may also increase.

The Life Insur­ance Asso­ci­ation has assured the MediShield Life Review Com­mit­tee that the bene­fit recom­mend­a­tions made by the Com­mit­tee will have min­im­al impact on the IP (i.e. top-up) com­pon­ent of premi­ums of Integ­rated Shield Plans. Insurers will assess the impact of the MediShield Life changes on the over­all IP premi­um and will advise their poli­cy­hold­ers when the changes are con­firmed.

All Singa­pore cit­izens will be eli­gible for the fol­low­ing sub­sidies on their MediShield Life premi­ums: trans­ition­al sub­sidies to cush­ion the increase in their pay­able MediShield premi­um, as well as Pion­eer Gen­er­a­tion MediShield sub­sidies if they are Pion­eers and MediShield Life premi­um sub­sidies if they meet the income cri­ter­ia. All Integ­rated Shield Plan poli­cy­hold­ers will enjoy the same sub­sidies for the MediShield Life com­pon­ent of their IP premi­ums.

The Gov­ern­ment will release more inform­a­tion on how you will be assessed for the premi­um sub­sidies when ready.

For Everyone: Work Injury Compensation Act

With effect from 1 April 2008, Work Injury Com­pens­a­tion Act (WICA) replaces the Workmen’s Com­pens­a­tion Act (WCA). The cur­rent scope only cov­ers manu­al work­ers and non-manu­al work­ers earn­ing less than $1,600 per month. The scope isnowwidened to cov­er non-manu­als work­ers earn­ing above $1,600 per month. Though buy­ing insur­ance for this group of work­ers is not com­pulsary, employ­er is still liable for the com­pens­a­tion if a val­id claim arises. The min­im­um and max­im­um to the claim for death and Per­man­ent Inca­pa­city for all work­ders are as fol­lows:

  Min­im­um Max­im­um
Death $47,000 $140,000
Per­man­ent Inca­pa­city $60,000 $180,000

So it makes sense for employ­er to pur­chase insur­ance for all work­ers to trans­fer the risk to insurers.

Life Protection

Life pro­tec­tion insur­ance is a life insur­ance policy that is designed to cov­er the insured for life. It pays a lump sum of money upon death, and about 5 install­ments of pay­out upon Total Per­man­ent Dis­ab­il­ity of the insured. Life insur­ance policy usu­ally also comes with Crit­ic­al Ill­ness cov­er­age that also pays a lump sum upon the dia­gnos­is of the covered crit­ic­al ill­ness defined by the insurer.

The fol­low­ing three types of life insur­ance are cur­rently sold in the mar­ket.

Type of Life Policy Cov­er­age
Tra­di­tion­al Whole Life Policy Whole life
Term Policy Up to a spe­cified age, say 60
Invest­ment-linked Life Policy As long as it is in-force

Con­tin­ue read­ing

Pyramid of Insurance Needs

pyramidofinsurance.png

The Pyr­am­id of Insur­ance Needs shows the increas­ing level of insur­ance that every­one needs. The most import­ant insur­ance is to cov­er ourselves adequately on health, the basic one being the nation­al hos­pit­al­iz­a­tion plan, the integ­rated Medishield plan offers by insurer that cov­ers the hos­pit­al bill com­pletely. This is import­ant as we should con­cen­trate on get­ting ourselves well and con­tin­ue with our nor­mal life instead of wor­ry­ing on the fin­an­cial bur­den.

Next on the pyr­am­id is pro­tec­tion against death, total per­man­ent dis­ab­il­ity and crit­ic­al ill­ness. This is rarer than hos­pit­al­iz­a­tion, but if it hap­pens, it will cause a lot of fin­an­cial and emo­tion­al strain on the fam­ily. We would like our fam­ily mem­bers to con­tin­ue their life as nor­mally as pos­sible. Hence, a com­pre­hens­ive cov­er­age with suf­fi­cient pay­out will help our fam­ily mem­bers to tide over the dif­fi­cult peri­od.

After we have adequately covered ourselves, we will then seek for oppor­tun­ity to save and invest to ensure a con­tinu­ity of good life for our fam­ily mem­bers. Fam­ily with chil­dren should con­sider edu­ca­tion policy to ensure and lock down a fixed sum of money for the children’s ter­tiary edu­ca­tion for a prop­er head-start in life.

And when we reach age 55, we should buy an annu­ity insur­ance policy that will pay us income, with increas­ing amount every year, as long as we live. We should be enjoy­ing our retire­ment years, without wor­ry­ing of lack­ing of income to sus­tain our every­day expenses.

Down­load the Fin­an­cial Needs Ana­lys­is spread­sheet now to determ­ine the amount of funds required for the vari­ous areas of insur­ance cov­er­age!

Ginny Lim Gek Eng
Email: lgekeng@yahoo.com
Web : www.aboutfinancialplanning.net