Health Insurance 101 – Putting the Fine Print Under the Microscope

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The world as we know it gets stranger every day. For instance, there was a time when the term ‘insurance’ was a bastion of hope and did not evoke feelings of mistrust and paranoia. Well, the truth is that words are merely a construct of our minds and only hold as much weight as we assign to them. The reason why some people scoff at ‘insurance’ today is because it has been hijacked by cunning financial institutions that only market what the customer wants to hear and ensnare their customers into rigid contracts with unfriendly terms and conditions.

For years, numerous insurance companies have engaged in this greed-fueled deceit by leveraging social engineering and utilizing legal loopholes to screw people out of their payouts. So how do they get away with this? The answer is simple – fine print. Yes, the unsuspecting and not-so-important looking wall of text that often gets ignored because of its barrage of technical terms and overall mundane vibe, is the perfect cover for insurance companies to use to get what they want with least resistance. When you sign on the dotted line, you legally embrace all the clauses in your insurance policy whether they work in your best interests or not.

In Singapore, all citizens and permanent residents are entitled to government subsidized healthcare coverage that absorbs nearly 50% – 80% of medical expenses incurred on hospitalization. The Central Providence Fund can help take care of a significant remainder of the bill since a considerable chunk of these contributions are allocated towards medical insurance schemes like Medisave, Medishield, and Medifund. Recently, the government introduced MediShield Life – one of the most promising universal healthcare insurance schemes in Singapore.

Today, we will take an in-depth look at some of the most common life insurance terminologies used by companies to covertly insert clauses that serve their own interests above the interests of their customers:

Medical Expenses Coverage

This coverage essentially refers to the patient treatment costs incurred from accidents or some other medical conditions. It covers all consultation, medical test, and surgery charges involved after the patient has been hospitalized.

While reviewing your insurance documents, you must keep an eye out for any expense limitations related to a specific illness or procedure. In fact, a wide number of medical conditions are not even liable for payouts as per their terms and conditions. Secondly, many medical tests not directly related to the treatment of an ongoing problem may not be covered by your policy.

Hospitalization Cash Insurance

By leveraging this policy, Singaporeans can ensure they have a stable cashflow for each day they undergo treatment in a medical facility. However, this coverage is directly dependent on the type of plan you have signed up for instead of the expenses incurred.

Insurance companies usually insert a clause stating the standard length of hospitalization required in order for the patient to qualify for payouts. There may be an annual expenditure cap based on a patient’s hospitalization period, or a specified limitation enforced over the entire term of the insurance policy.

Critical Illness Insurance

Patients who have opted for this policy are entitled to a lump sum amount in case they are diagnosed with a critical illness as defined in the insurance agreement. It usually covers major illnesses such as heart failure, kidney failure, stroke, and cancer. People who sign up for this kind of policy must look out for the benefits provided based on the stage of diagnosis of the critical ailment.

Aside from watching out for payout limits, policy holders must also be wary of the period that covers your eligibility of claims meant for you.

Disability Income Insurance

Disability payouts essentially cover a certain percentage of your monthly remuneration in case an accident or medical affliction has rendered you physically disabled. Recently, an NTUC income policyholder who lost her limbs while serving in the Singapore navy was denied his payout because he still has a desk job with the SAF and qualifies for their exemption of ‘sedentary work’ as per their terms.

Hence, you must pay close attention to the definition of ‘disabilities’ specified in your insurance product instead of banking on your perceived opinion of what a handicap is. Review the progressive reduction percentage in payouts as you make your recovery. It is also important to note that many of such insurance products cease to serve you when you reach your retirement age.

Long-term Care Insurance

Long-term healthcare is necessary in many critical medical cases so that the condition of patients can be stabilized and their recovery process quickens. Therefore, you must review the age window specification for this insurance coverage as well as the minimum number of activities that you are unable to perform in order to qualify for these nursing-related payouts.

Long term nursing means you do not need to be in hospital, but still cannot perform basic ‘activities of daily living’ on your own, and hence require long term help. These include activities such as eating, moving around, dressing and bathing. Many policies put a ceiling on the coverage period for the long-term nursing benefits a patient is entitled to.


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