What Happens To You Financially When You Fall Sick Or Get Into An Accident And Need Hospitalisation?
This article is brought to you by Standard Chartered Bank (Singapore) Limited (“SCBSL”). All information provided is for informational purposes only and is not intended to be construed as advice or an offer for any product or service. SCBSL is not liable for any informational errors, incompleteness, delays, or for any actions taken in reliance on information contained herein.
Getting hospitalised due to illness or because of an accident is upsetting enough – could you imagine having to worry about your finances at the same time?
While it’s a situation none of us hope to find ourselves facing, the reality is that if you don’t have a financial safety net for when you are hospitalised, you could find yourself cash-strapped even if your medical insurance covers your hospitalisation bill.
If you are a Singapore citizen or permanent resident, you may already have an Integrated Shield Plan (IP). It is a comforting safety net, but there are additional costs that might be incurred directly or indirectly when you require hospitalisation.
Whether you’re a young professional or a working parent with several dependents in your household, receiving a fixed amount of cash for each day that you’re hospitalised can go a long way in easing the financial strain. Here’s where hospital income insurance comes in.
What is hospital income insurance?
A hospital income insurance policy is simply one that pays out a sum of cash for each day that you’re hospitalised.
You’re free to use this cash at your own discretion – you could, for instance, use it to cover miscellaneous medical costs and day-to-day expenses, as well as replace your income when you are hospitalised and out of work.
You can purchase hospital income insurance on its own, or in addition to your regular hospitalisation and surgery insurance policy. This makes it useful for covering out-of-pocket expenses – that is, expenses that aren’t covered by your other insurance policies – while you’re hospitalised.
Who should consider hospital income insurance?
Everyone can benefit from hospital income insurance, especially if you fall under these categories:
- You don’t have a fixed income. If you’re self-employed or get most of your income through part-time work or the gig economy, being out of work for a few days could greatly affect your finances.
- You don’t have paid sick leave. Perhaps you’ve just started a new job, and haven’t yet served the three months required to be entitled to paid sick or hospitalisation leave. Being hospitalised for a few days could mean losing a chunk of your monthly salary.
- You are the sole breadwinner of your family. When you have several dependents in your household, any disruption in income becomes riskier.
- If you have children. You may also need to fork out money for additional childcare costs if you and/or your spouse are temporarily unable to care for them.
Whether or not you fall under the categories above, there are a few compelling reasons to consider getting hospital income insurance:
a) The cost of healthcare in Singapore is high (and is getting higher)
The Singaporean healthcare system may be one of the best in the world according to Bloomberg’s health-efficiency index – but efficient healthcare doesn’t always equate to affordable healthcare.
The average hospital bill you will incur for surgical specialties can go up to thousands of dollars in a public hospital alone:
|Average in-patient bill size (public hospitals, ward class A)|
|Hospital||Average per day||Average total bill|
|Changi General Hospital||S$1,774||S$7,312|
|Khoo Teck Puat Hospital||S$2,125||S$8,124|
|KK Women's & Children's Hospital||S$2,302||S$5,061|
|National University Hospital||S$2,666||S$8,999|
|Ng Teng Fong General Hospital||S$1,372||S$5,044|
|Singapore General Hospital||S$2,788||S$10,541|
|Tan Tock Seng Hospital||S$2,337||S$7,964|
|National Heart Centre||S$3,508||S$31,256|
The price we pay for healthcare is ever-increasing: in 2017, Singapore’s gross medical inflation was 10%. This outpaces our ability to pay for healthcare, as the median gross monthly income only grew 4.3% in the same year.
b) You may need to finance a huge bulk of these expenses out of pocket
Even with the availability of healthcare schemes and subsidies, out-of-pocket costs still form a huge portion of medical expenditure in Singapore.
According to data from the World Health Organization (WHO), out-of-pocket expenditure in Singapore represented almost 37% of health expenditure in 2015. This is much higher than the average out-of-pocket expenditure in the East Asia and Pacific region (26%), and almost triple that of other high-income nations (13.5%):
c) Some medical expenses may not be covered under your private medical insurance scheme
Having private medical insurance coverage – such as an IP – can help cover a lot of medical expenses you may incur.
However, while your IP will cover hospitalisation fees “as charged”, it may not cover some of the costs associated with being ill or hospitalised. This includes costs for:
- Live-in or part-time domestic helper fees
- Transportation to and from treatments
- Special dietary requirements
To illustrate, if you’ve been admitted for dengue fever, you could be spending up to 6 days in the hospital. During this time, your spouse may be travelling to and from the hospital to care for you, while having to hire a part-time nanny to mind your children during your period of hospitalisation. Once you have been discharged, your recovery diet may call for higher-quality food and preparation than what you are normally accustomed to, incurring yet again more expenses.
These costs can be a strain on your finances, especially if being temporarily put out of work affects your income.
Hospital income insurance provides a financial buffer
Receiving a fixed amount of cash for each day that you are hospitalised can therefore greatly ease the financial strain of being hospitalised.
With Allianz Hospital Income Protect, if you are hospitalised due to accident or illness, you will get a daily hospitalisation income of up to S$300 for up to 750 days (one of the longest in the market at the time of writing). This payout doubles if you are required to be in an intensive care unit, for up to 90 days. The payout will be triggered once you’ve been hospitalised for more than 12 hours.
In addition, the policy provides a daily cash benefit of up to S$300 during your medical leave period after you have been hospitalised, which is useful for replacing any loss of income while you are recuperating at home.
If you have been diagnosed with certain infectious diseases, there is also an instant lump sum payout of up to S$600 upon diagnosis.
Accidents or illnesses can lead to costly hospital charges and a loss of income. Hospital income insurance costs relatively little for the financial buffer it can provide in times of need. Better yet, it helps keep your mind off your finances so you can focus on what’s truly important: getting back on your feet again.
Allianz Hospital Income Protect is underwritten by Allianz Global Corporate & Specialty SE Singapore Branch (“Allianz”) and distributed by SCBSL.
This article describes the insurance product(s) and service(s) provided by Allianz in alliance with SCBSL. This article is not a contract of insurance and reference should be made to the actual policy for the exact terms and conditions applicable to the insurance policy, which will be sent to you upon the acceptance of your application by Allianz. The insurance product described in this article is a product of and underwritten by Allianz and not SCBSL. In facilitating insurance arrangements or in referring customers to any insurer, SCBSL is acting in alliance with the insurer and not as an agent for customers.
You may wish to seek advice from a qualified advisor before purchasing the policy and in the event that you choose not to seek advice, you should consider whether the policy is suitable for you. If, after purchasing the policy, you decide that the policy is not suitable for you, you may terminate the policy in accordance with the free-look provision, if any, and the insurer may recover from you any expense incurred by them in underwriting the policy.
This Policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (“SDIC”). Coverage for your Policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact Allianz or visit the GIA or SDIC websites (www.gia.org.sg or www.sdic.org.sg).