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Young working adults' guide to healthcare insurance in Singapore

22 August 2024 dot 7 min read
Disability Income Insurance Health Insurance Critical Illness Insurance
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After entering the workforce, there is plenty for you to adjust to – from starting to pay your own bills, to declaring income tax and climbing the corporate ladder, to learning how to budget for the many needs (and wants) you have in life, getting married, buying a home and saving up for your retirement nest egg.
 
Given these new responsibilities and considerations, insurance may not be at the top of the list of priorities for young working adults.

Why you should not neglect health insurance

As a young working adult, your ability to generate income through work, for the next four decades or so, is your biggest personal financial asset.
 
The harsh truth is that unexpected health issues can rob you of this. If you find yourself in such a situation, you may face a double whammy – unable earn an income because you are too ill or recovering, while also incurring potentially hefty healthcare bills.
 
Having a safety net that takes care of this, while you continue to shoulder new responsibilities and build your life, provides peace of mind that ultimately enables you to implement better plans, do better work and live a better life.
 
Thus, health insurance should be one of the first types of insurance you get, protecting you from being burdened with healthcare costs and providing some funds to offset income loss.
 
In contrast, life insurance is meant to provide your dependants financial support in the unfortunate event of death or disability, and general insurance protects you from loss of assets you own. While these may be very important areas that require protection as well, you should first ensure your ability to bounce back from a health condition.

Types of heath insurance

Most health insurance policies fall into four broad categories: Hospitalisation Plans, Critical Illness Insurance, Disability Income Insurance, and Severe Disability Insurance.

Hospitalisation plans

Also termed Medical Protection, hospitalisation plans mainly cover your hospital and surgical expenses.
 
All Singaporeans have MediShield Life, a universal basic hospitalisation plan from the government, as well as the opportunity to purchase additional Integrated Shield Plans (IP) from private insurers.
 
AIA HealthShield Gold Max is a Medisave-approved medical protection plan which supplements your MediShield Life coverage with additional private insurance coverage.
 
The additional private insurance coverage gives you greater coverage and benefits including the choice to stay in private hospitals or Class A/B1 Wards in public hospitals. At the forefront of its industry, AIA continues to offer industry-leading value-added services such as exclusive access to its AIA Quality Healthcare Partners as well as Personal Medical Case Management via Teladoc Health, providing personalised step-by-step support from diagnosis to recovery for serious medical conditions.

Critical illness insurance

Critical illness insurance provides cash payouts if you are diagnosed with a critical illness covered by your policy, even if hospitalisation is not needed. This lump sum amount is meant to help you with expenses when you are diagnosed with a major illness, such as the cost of outpatient treatments or living expenses during your recovery phase.
 
AIA Power Critical Cover supports you extensively through the unpredictable event of multiple critical illnesses, from the pre-early stages to relapses.
 
This plan also covers you for 10 conditions under the Pre-Early Benefit, namely chronic diseases, cardiovascular diseases, and benign and borderline malignant tumours, so you're better equipped to nip the signs of early critical illnesses in the bud.
 
Boosted with first-in-market features, high coverage and value-added medical services, AIA Power Critical Cover minimises the financial disruption to you and your loved ones while you focus on rest and recovery.

Disability income insurance

Disability income insurance provides regular payouts in the event policyholders suffer from a disability that prevents them from working. This stream of payouts helps offset any loss of income, allowing you to recover with peace of mind knowing that recurring monthly bills like instalments can continue to be paid.
 
AIA Premier Disability Cover gives a monthly payout of up to 75% of your existing income, right up until you make a full recovery or reach the age of 65, whichever is earlier, if a disability prevents you from earning a living.

Severe disability insurance

Severe disability insurance helps pay for long-term care that you need when you are severely disabled to the extent that activities of daily living cannot be performed. From 2020, Eldershield will be replaced by CareShield Life, providing universal coverage to those above 30.
 
Primarily, you should think of this policy as one that will help you tide through a worst-case scenario in instances of severe disability. This should be supplemented with private disability income insurance that typically have lower barriers for claiming, especially during your working years.

Conduct an audit of insurance policies you already have

Before you rush to purchase a host of new health insurance policies, it is wise to do a detailed audit of the existing insurance policies you have.
 
You might find that you already have insurance policies that your parents bought for you. Many policies such as hospitalisation plans provide payouts on a reimbursement basis, and you are only able to claim on a single treatment once, which makes overlapping policies a waste of money.
 
Your employers may also provide group health insurance coverage as part of your benefits package. These might include group disability income insurance, which provides income for employees in the event of any disability that prevents them from working. Do keep in mind that group health insurance provided from your company will likely lapse once you leave the firm, so you might want to consider purchasing your own.
 
Lastly, you should familiarise yourself with MediShield Life, which is compulsory for all Singaporeans, as well as diverse private integrated shield plans, which complement it. This will allow you to get the right amount of coverage, on top of the existing benefits you are receiving.

Speak to an AIA Consultant

Now that you understand the types of health insurance available on the market, as well as assessed what you already have, you can contact a trusted AIA Consultant for a review of your coverage or to formulate a personalised plan that takes into account your needs and financial ability.
 
This article was originally published on 29 September 2020 and updated with new information.

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