Simplifying Health Insurance

Help with paying your hospital bills
Healthcare costs are rising faster than the average cost of other goods and services¹. Medical expense benefits aim to meet the direct costs of medical treatment and hospitalisation.

Depending on the type of plan chosen, this benefit group may cover the full cost of treatment, or just a portion of the costs. Or your plan may cover some costs in full, and other costs in part, or are subject to maximum limits. As a recommended minimum, everyone’s health insurance provision should include at least some benefits of this type.

Medical expense benefits are offered on a reimbursement basis. In short, you pay the bill first and then the insurance company gives you the money back.

¹From 2005 to February 2010 the Healthcare Consumer Price Index has risen by 13.8% compared with a rise of 11.9% in the General Consumer Price Index over the same period. Source: Singapore Government Ministry of Health website MAS Monthly Statistical Bulletin March 2010

Reasonable and Customary Charges
Most insurance companies will only pay out for ‘reasonable and customary charges’. In general, this refers to standard types of treatment that have been adopted by the medical community, performed at prices that are typical in the local market. The AIA medical expense plans featured on this site pay for reasonable and customary charges.

Deductible and co-insurance
Most basic medical expense plans come with ‘deductible and co-insurance’ components, which are portions of the bill that you need to pay out of your own pocket. For full reimbursement of your medical bills, you may opt for an additional plan, at an additional premium, which will cover the deductible and co-insurance portions of your bill. You should also check if your basic plan covers pre- and post-hospitalisation treatments (e.g. investigative tests, renal dialysis, chemotherapy).

Pre-existing Condition
If you have a serious ailment or have been treated for a medical problem before you apply for health insurance, your insurance company could classify this as a ‘pre-existing condition’. This could make it difficult for you to be accepted into a medical insurance scheme, or the insurance company might not cover you for claims relating to the pre-existing condition. So it is wise to buy a medical expense plan when you are young and healthy. For the same reason, it may not be a good idea to switch insurance companies once you have been accepted into a medical expense plan.

Group medical benefits
If your employer provides you with group medical benefits then it is important to remember that you may only be covered for as long as you are employed by the company. If you leave the company, or lose your job, and don’t have alternative health insurance coverage, you will be liable to pay your own medical expenses. CPF MediShield may meet some of your expenses in the event of hospitalisation, but you may be left with a hefty bill.

Help with expenses other than your hospital bills,
or to help compensate you for lost income

Hospital income benefits are linked to your medical diagnosis and treatment, but do not depend on the medical costs you incur. Many hospital income or hospital cash plans pay a fixed amount of cash for every day you are in hospital. Often, an accident or illness can lead to additional expenses beyond the cost of medical treatment covered by a hospital expense reimbursement plan. These could include transportation costs to and from the hospital for you and your family members, childcare support, meals out - the list goes on. Furthermore, if you are unable to work for a while, you may lose some or all of your income as a result of your accident or illness. The daily cash allowance may not fully replace your lost income, but it can help you cover your daily living expenses. The AIA hospital income plan featured on this site pays for reasonable and customary charges.

Help ease your financial burden should you contract a serious illness
Sometimes, an event happens that has the potential to alter your way of life. Every day, 24 people in Singapore are diagnosed with Cancer².

If you are struck by a critical illness, the medical treatment you require may not be covered in part or in full by your hospital expense plan, and any prescription medication that you may need could amount to a lot of money. You may also wish to seek pioneering or experimental medical treatment. What’s more, the combination of the illness, treatments and medications can often prevent one from being able to work or care for family, resulting in loss of income and unanticipated expenses such as childcare support.

Critical Illness plans usually offer larger, lump sum cash payments and it’s up to you how you spend the money. Basic critical illness plans in the market provide coverage for 30 common critical illnesses such as cancer, stroke, heart disease and kidney disease, and usually terminate after the first claim is made.

²The Big C, the Straits Times, 6 March 2010.

Early stage illnesses
Basic plans do not usually cover early stage illnesses, and most will terminate once any claim is paid.

Pre-existing Condition
Always check exclusions, as there is no single plan that covers everything. And as with medical expense reimbursement plans, pre-existing conditions are commonly excluded from coverage.

Get coverage while you're young
It is wise to buy a critical illness plan when you are young, as premium payments are lower, and with certain plans your premiums will not increase because of your age. Once your health begins to deteriorate you may find it difficult to be accepted into a critical illness insurance plan, or it could cost you a lot more.

Survival Period
An important point to understand about critical illness plans is that, generally, no death benefit is payable or may be very small. Critical illness plan benefits may be subject to a qualifying ‘survival period’ — for example, 30 days from diagnosis. This is because critical illness plans are designed to offer ‘living benefits’ that help you cope with your illness. If you are specifically interested in protecting your loved ones in the event of your premature death, talk to your AIA Financial Services Consultant about a Whole Life or Term Life plan.

Waiting period
Health insurance is often subject to a ‘waiting period’, meaning that you would not be able to claim benefits for a condition diagnosed or which commences within a stipulated period (e.g. 30 days) from your policy’s effective date. Waiting periods may differ from policy-to-policy or even between benefits for the same policy.

Help ease your financial burden should you be injured or
disabled as a result of an accident
Accidents can happen to anyone at any time — most are minor, while some can be serious. However, even a minor accident and a trip to the emergency room can be costly. Or you might be unfortunate enough to suffer a serious injury which could cause you to lose a limb, or be permanently disabled and unable to return to work. In the event of death caused by an accident, the financial consequences for your loved ones could be devastating.

A personal accident plan provides you with a lump sum cash payout, helping you and your family cope with the financial burden should any of these unfortunate events happen. Accident plans tend to be very affordable. If you have a limited budget, it is recommended that you at least try to ensure that you and your family are covered in case of accidents.

Reasonable and Customary Charges
Most insurance companies will only pay out for ‘reasonable and customary charges’. In general, this refers to standard types of treatment that have been adopted by the medical community, performed at prices that are typical in the local market. The AIA personal accident plans featured on this site pay for reasonable and customary charges.

Indemnity schedule
Benefits payable for serious injuries such as dismemberment may be subject to an ‘indemnity schedule’ stipulating the percentage of your Insured Amount payable for a specific loss. This is because not all injuries are considered equal — some are deemed more severe than others. For example, while for the loss of both eyes you may be eligible to receive more than 100% of your Insured Amount, for the loss of two toes you may receive only a small percentage.