Things to consider when getting an insurance plan
The Business Times
By Genevieve Cua
Before you decide on an Integrated Shield plan, you should be familiar with some of the similarities and broad differences among the plans.
One important decision that you should make is your preference of hospital ward - whether Class A or private hospital, or Class B1 or C. This is because the plans are priced based on your choice of ward. A mismatch between what the plan entitles you to and your actual choice of ward could cause a significant financial strain.
Here are some important common elements:
All the plans have a deductible and co-insurance features. The deductible is the first layer of costs that you have to pay. Co-insurance is the share of bill you have to pay on the portion that is covered by insurance. These features are meant to encourage policyholders to take responsibility for their health.
In more developed markets, first-dollar comprehensive health insurance plans that cover from the first dollar of costs have led to excessive claims which may ultimately make the plans unsustainable.
Claim limits. Plans may vary in terms of the maximum claim that you can make per policy year. Some plans may also stipulate a lifetime claim limit; other plans may not set a cap on lifetime claims.
Last entry age and maximum coverage age. For most plans, the last age of entry is 75. The maximum coverage age is the age after which coverage ceases. Some plans offer lifetime coverage. Other plans may extend cover until age 80 or 85.
Some insurers offer riders to cover the deductible and co-insurance elements of Integrated Shield plans. Do note that on these riders, the maximum coverage age may be 100, as opposed to an Integrated Shield plan which may offer lifetime cover.
Pro-ration Factor. This is an important feature to be aware of. If you stay in a higher-class ward than your plan entitles you to, a pro-ration factor will be applied to the claim which reduces the amount that can be claimed.
For example: an Integrated Shield plan for Class B1 ward of government restructured hospitals may apply a 50 per cent pro-ration factor to private hospital charges. This means an insured person with a hospitalisation bill of $20,000 for a stay in a private hospital will find that he can only claim up to $10,000 of the bill before the application of the deductible and co-insurance elements.
All Integrated Shield plans are guaranteed renewable as long as the premium is paid. Premiums, however, are not guaranteed - they may be increased on renewal depending on the claims experience of the portfolio. Premium rates rise with age.
Pre-existing conditions. These refer to conditions that you may suffer before you applied for the plan. Pre-existing conditions are usually not covered - that is why it is important to take up a plan while you are healthy.
It is important to disclose all pre-existing conditions at the time of application. Insurers may declare the policy void if you misrepresent or fail to disclose material facts such as pre-existing conditions. Some plans may cover a pre-existing condition following a waiting period of, say, five years, during which the insured does not experience any symptoms or receive treatment or medication for the conditions.