My humble view on Health & Life insurance

[terryhoho]

with all due respect to all insurance agents.


Purpose of life insurance is to cover for your dependee's financial position for a LIMITED PERIOD after your death.
Are you having dependent depend on you financially?

So if you're not working/new born/children especially, do you think you still need?

funny case of life insurance : Your insurer reject their liability after your death that you're in act of collision, thus not covered by accidental death. Wonder who still insured by AXA here?

AXA Singapore withdraws insurance coverage of PRC Ferrari driver Ma Chi « THE TEMASEK TIMES

(please don't start any citizen issue here, it only serves as case study, learn to live in peace.)

Next time they can try reject liability using "Act of God"


Health insurance :

anyway I'm young, i just quit my health insurance as well. was paying $475 per year for it.

doing a quick check i'm pretty health, never been to hospital except during NS(NS cover of course)
Suppose I been hospitalise for an car accidental : I'm have to pay roughly 20% of the total bill in Subsidized scheme(apply to Singapore citizen) and suppose the total bill is $10,000. 20% = $2000

Generally i think most of human being luck is average , maybe you get car accident once every 5 years lei?

$2000 / 5 = $400
You save up 5 years of insurance , you can afford to pay your own bill + a allowance for you hospitality.

Do you really think u get car accident once 5 year?

How many of your family members buying health insurance?
suppose you have 5 members?
5*$475 = approximately 2.4k year
2.4 X 5 = $12,000

on subsidized, you can pay up to 12 000 * 100%/20% = $60 000 bill with that.

 

[IronMac]

TS, you're young and inexperienced. Let me speak with the experience of someone who is much older and much more experienced.

Have you ever paid out millions for health care? Can you afford millions in health care?

If you answer NO to either question then do NOT let your health insurance lapse!!!

 

[DevilCurseYou]

There is some truth in TS view
Life insurance:
1. it doesnt take an actuary to know death is certain(100%).

2. Insurance company makes money; they do not lose money. if they ever lose, they will remember to charge you more next time. Not to mention, insurance company has overheads such as their admin and sales staff.

3. Insurance companies are not known to be outstanding investors. also, they are stuck with high proportion of government bonds to 'guarantee' payout at any time. hence, it is very possible for an individual investor to outperform insurance company in investment.

so the premium>probability of dying*sum assured. Hence, do not think of profiting from insurance, and insurance is an expense.

You minimise expense. If you want your dependent to have an easier time, when you die, you will want to buy some term insurance as expense. But on the overall, probability weighed, you want your dependent to have a larger inheritance/you want an easier life, reduce your expense aka insurance.

the thing about probability calculation is they weigh the dollars evenly. a dollar is way more useful to a beggar than a millionaire, but they both get the same weight in typical probability calculation.

so when you try to weigh the dollar having more value for a beggar, the optimal strategy becomes to buy term when your liability is high, and reduce your expense when there is no liability(retirement).

Health insurance:
why do we not insure the loss of a ball point pen?
because the insurance company has overhead, so we are better off self insuring, to avoid this expense. we can self insure because a ball point pen is so cheap relative to our asset.

so if the healthcare cost are cheap relative to our asset, self-insuring is the optimal strategy because it is cheaper, and you do not have to argue with insurer over TnC.

For TS, I consider 10k to be a typical medical bill. Insurance is more important for tail risk, those 50k to 250k. for those, if they are still cheap to the assets you own, congrats and and self insuring is indeed the way to go.

if you expect a hospital bill of more than 250k, your prognosis is probably still bad with treatment. so perhaps without health insurance, it will be easier for you to give up on treatment and allow yourself to die than to suffer through medical treatment.

Have you ever paid out millions for health care? Can you afford millions in health care?

In the event you get a million dollar bill, NTUC basic enhanced incomeshield will only cover up to 250k a year. that is still 750k to be paid by you.

Death is inevitable. millions dollar health bill appear to be an extreme event, that perhaps be left unprepared. enjoy more while you last, while you are lucky. we may be over-consuming healthcare.

Buying insurance should not be calculated using probability. That's the job of the actuary.

The decision should be based on consequences.

I will refine your statement to: buy insurance for low probability and unaffordable consequences.

I have established in health insurance to buy it if it proves unaffordable to your asset.

with regard to high probability event like eventual death, it is a consequence that cannot be avoided and hence should be prepared by individuals, not by insurance. insurance is an expense and hence it will cost more. However, premature death, between the age of 20 to 65, has a quite low probability of 9%, severe consequence(for most family) and hence should be insured.

the above applies for singapore. in other countries, inheritance taxes may make life insurance as inheritance attractive.

9% is derived from singstats singapore resident life table 2011.

 

[terryhoho]

TS, you're young and inexperienced. Let me speak with the experience of someone who is much older and much more experienced.

Have you ever paid out millions for health care? Can you afford millions in health care?

If you answer NO to either question then do NOT let your health insurance lapse!!!

so experienced. lol. I wonder how much is the maximum coverage up to?

 

[IronMac]

if you expect a hospital bill of more than 250k, your prognosis is probably still bad with treatment. so perhaps without health insurance, it will be easier for you to give up on treatment and allow yourself to die than to suffer through medical treatment.

*cough*

It's easy to say what you say but wait until you are faced with the reality of being wheeled into a single room to die.

Death is inevitable. millions dollar health bill appear to be an extreme event, that perhaps be left unprepared. enjoy more while you last, while you are lucky. we may be over-consuming healthcare.

I am not talking about a single million dollar health bill. I am talking about multiple hospital stays incurred over the course of years. 10k here, 15k there, it all adds up quickly.

 

[IronMac]

so experienced. lol. I wonder how much is the maximum coverage up to?

Hey, I wish I was not so experienced! No laughing matter when TTSH and KTPH send you the bills.

Life insurance, I don't have life insurance. Health insurance, I'm covered up the wazoo with Prudential.

 

[naro]

so experienced. lol. I wonder how much is the maximum coverage up to?

coverage for health insurance??

 

[elktan]

My humble philosophy is to buy insurance when you don't need it. Cos when you need it, no one is going to sell to you (or they load you with extra premium).

 

[kebinu]

Terryhoho,

You have lots of mistakes in your first post.

MC's case is general insurance, it's not life insurance.

We can be healthy today, but we don't know what's gonna happen tomorrow. The odds of staying healthy is still high, insurance is just looking at the odds what if we are not anymore.

If I know when things will happen, I will buy my health insurance 1-2 years before it happens, whack on term plan on death or anything 1-2 years before it happens. The problem is "I don't".

I don't care if I don't get to claim my insurance because this is a good thing. I am still alive and kicking and healthy. BUT what if I need to claim and yet I don't have insurance. I am better off paying some money (premium) for a piece of mind than getting worried about having no money when ****s happen.

So, I rather pay more for a local brand that will definitely pay its policyholder than a cheaper one whom I don't know if they will still exist a few years later.

Small claims are easy to do, even smaller insurers will pay out the claim. The issue is when big claim comes, this is when pattern can be more than badminton. (you see it a few times in the news)

Ignorance is bliss, people buy insurance only after a few kinds of experiences.
1. people buy because they need the protection (still rare)
2. people buy after people close to them are experiencing pains, one of the pain is financial pain because they don't have insurance
3. people buy after seeing how people benefit from insurance and then understand why insurance is important
4. pressured to buy from agents (good or bad, depends)

Again, in your mind right now, there is only an accident stay in hospital. There will be nothing, maybe an accident once every 5 years in the future for you.

Personally, after seeing both my parents, my brother, my nephew getting into hospital, after seeing the bill, it will be well worth it to have insurances.

I don't care if my clients don't get to do any claim because they are healthy and sound, but it matters they get their claim when necessary.

Being a young horn, agents do feel good because their clients buy insurance and get to claim. Friends getting cysts growth on face, getting ACL tored in soccer game, friend's mother getting gall stone and undergoing more checks right now, death claim paid out of orphans aged 17 & 19, etc.

Many may think a comprehensive shield plan is enough, sure, maybe. Though we know that it works by reimbursing the bills, there is a need to pay the bill first. If we have no money, how to pay first? This is why coverage on CI is still important, maybe not for income replacement, but at least to create a cash flow for the payment.

These are just some of the random points in my head now. For yourself, please get yourself min a comprehensive shield plan on B or A ward, which costs less than $200 cash a year for now. SAF Aviva term plan with CI rider just because they are cheap.

Good luck.

 

[Mecisteus]

$475 a year and you cant afford it? thats like $40 a month only. you should terminate your mobile too if you really want to save.

 

[henrylbh]

TS, you're young and inexperienced. Let me speak with the experience of someone who is much older and much more experienced.

Have you ever paid out millions for health care? Can you afford millions in health care?

If you answer NO to either question then do NOT let your health insurance lapse!!!

How many can afford the premiums to cover millions in health care especially as one grows older?

 

[naro]

How many can afford the premiums to cover millions in health care especially as one grows older?

thats why you start young with medical insurance.

 

[chaotank]

Many may think a comprehensive shield plan is enough, sure, maybe. Though we know that it works by reimbursing the bills, there is a need to pay the bill first.

What can they do to you if you refuse to pay? Make you sell your house? Most hospitalisation claims are settled within a week as far as I know. No time to sell even if they wanted to.

Private hospitals may refuse to entertain you if you don't pay upfront or place a deposit, but can govt hospital do that?

I vaguely remember the newpaper sharing some story of an uncle who passed on his hospitalisation debt after he died. How to have a debt on a reimbursement basis?

 

[henrylbh]

thats why you start young with medical insurance.

That's what those insurance men say!!! You believe that?

As you age you premium keeps going up until you feel the pain especially when you retire.

 

[naro]

That's what those insurance men say!!! You believe that?

As you age you premium keeps going up until you feel the pain especially when you retire.

i think u havent seen the hospitalisation costs in Singapore.

And trust me, you do not want to go to government hospital.

 

[peterchan75]

i think u havent seen the hospitalisation costs in Singapore.

And trust me, you do not want to go to government hospital.

If don't go government hospital, then go where ? Private hospital ?

 

[naro]

If don't go government hospital, then go where ? Private hospital ?

yup.

have you seen the queues at NUH or SGH? Queue time at A&E can take hours.

 

[anfielder]

That's what those insurance men say!!! You believe that?

As you age you premium keeps going up until you feel the pain especially when you retire.

The thing about starting young is that there's less chance of having pre-existing conditions that will be excluded from coverage.

 

[henrylbh]

i think u havent seen the hospitalisation costs in Singapore.

And trust me, you do not want to go to government hospital.

I paid beared about 40% of hospitalisation expenses when my spouse incurred about 70k on first round of cancer. That's for class B1 only in a govt hospital. That time no such thing as rider for medishield plan A, without counting cost for relapse years later.

Now I cover myself with rider and hell I am throwing $1.4 in annual premium and I am afraid whether I could afford when the premium reaches $4 to $6 when I need the coverage most.

 

[henrylbh]

yup.

have you seen the queues at NUH or SGH? Queue time at A&E can take hours.

It took me almost an hour to settle a bill at ME. In the end I got fed up and told the counter I am walking out cause the nite before I had already sign a blank credit card slip.

Worst is I felt idiotic going to the private hospital. But no choice cause the patient wanted ME.