FINANCIAL THOUGHTS
What Is The Real Cost Of NOT Having A Shield Plan Rider?
First of all, a Shield Plan is actually a Health Insurance or sometimes called a Hospital & Surgical Plan as well. It is an insurance plan that will pay for certain allowable hospital bills.
A Shield Plan Rider, on the other hand, is also a component of health insurance. This article will explain further about a Shield Plan Rider.
What is a Rider?
An additional or extra benefit. That is one way to say what a rider is. An insurance policy is the main plan and a rider is the one that is pegged to the main plan.
Take note: Without the main plan, the rider cannot exist on its own.
READ ALSO: Am I Getting The Right Insurance?
Shield Plan Rider
A Shield Plan does not cover the full amount of an allowable hospital bill. That means that you still need to fork out money to pay a percentage of the bill. Normally, you would still need to pay for the Deductible and Co-Insurance.
That is where the Shield Plan Rider comes in. With it, you are able to pay a lower percentage of the hospital bill. Previously, you can even walk out of the hospital without paying a single cent. In other words, it is fully claimable. But new rules have been implemented and things will no longer be the same.
READ ALSO: How Does MediShield Life And Integrated Shield Plan Work Together?
Financing your health insurance
The Shield main plan is payable via your CPF MediSave or Cash and that is why most Singaporeans own a Shield Pan. But on the other hand, a Shield Plan Rider is payable only by cash. And that makes a lot of people quiet reluctant to purchase it.
Why? Well, if in a year you are fully healthy and never once stepped into a hospital to receive treatment, then your premiums for that year has gone “redundant” or “burned”.
Thus, a lot do not want to see their money gone to waste hence the reason for not getting a Shield Plan Rider.
The Comparison: With Rider or Without Rider
Enough words, here is a graphic to explain.
See the difference. Yes, it is quite an amount.
This is just an example to show you some idea of the difference. The larger the number on the bill, the larger of a portion you would need to pay.
Some might take a chance and not get a rider, but as per a lot of unfortunate events in our lives, it all comes unexpectedly and you will definitely be caught off guard.
Do you really want to save a few hundred dollars of premiums OR are you more willing to take a gamble of paying a few thousands of co-payments of bills?
Digging into your savings
If you do not have a rider, you would need to pay the Deductible and Co-Insurance portion with cash.
That cash often would come from your own savings. The larger the bill, a bigger portion of the bill you would need to pay.
Imagine if you already have $100,000 of savings, but you suddenly fell terribly ill. Part of your bills is claimable with your Shield Plan and the part of the bills is payable by you. With a bill amounting to $100,000, you would roughly need to pay $13,150.
That will take a good 15% of your savings. It will take time for you to earn back that amount. You might even need to sacrifice your lifestyle or your trip to Canada.
“Does not cover any pre-existing illness”
What if you take a chance and not by the rider. Unfortunately, your chance ran out and you were diagnosed with a early stage cancer. Thankfully you healed and are able to continue working.
Due to that incident, you had to pay a good amount of money for your hospitalisation and chemotherapy. You regretted not getting a rider and you wanted to buy it now.
Sad to say, due to your pre-existing illness, you were rejected from getting a rider.
Moving forward, you realize that you need to save even more money due to the fact that you do not have a rider.
Changes to the Shield Plan Rider
If you have not heard, there will be changes to the Shield Plan Riders.
Eventually, everyone will need to still co-pay his or her hospital bills. The only difference is how big of a co-payment will you need to pay.
But that does not mean owning a Shield Plan Rider is now redundant. You would prefer to pay 5% of the bill rather than a good 30% of it. The good thing is that the insurers will most likely reduce your premium as they did take away a benefit from you as well. Give and Take.
READ ALSO: How Will The Change In The Health Insurance Policies Affect Me?
Healthcare is top of your priority
Most of us are most afraid of our health deteriorating and the amount of money in order to heal. It is not a cheap item and definitely non-negotiable.
Thus, whether you are young or old, an unfortunate event can happen to you at any time. Better be safe than sorry. Cliché indeed.
Well, that’s the end of this article. Do share it if you think this is beneficial to your friends and family.
Disclaimer:
I am a financial adviser but I am not your financial adviser. Therefore, what is posted on this website, are my opinions and NOT to be taken as financial advice. Information provided might be relevant at this period of time but may be irrelevant due to alterations to rules, regulations or policies. The information provided is true to the best of my knowledge, but there maybe omissions, errors or mistakes.
