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  • Writer's pictureFinancial Fortress

What You Need to Know About Health Insurance in Singapore

Updated: May 9, 2022

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It goes without saying that a single hospitalisation can drain your bank account and wipe out your entire emergency funds.

Even though healthcare subsidies like MediShield and Medisave are aimed at helping Singapore Citizens and Permanent Residents in medical emergencies, they mainly cover basic public hospital treatments and aren’t enough to foot the entire hospital bill.

MediShield is also not as comprehensive as a private medical insurance plan, while Medisave only works like a CPF savings account where some of your monthly contributions go, reserved for when you need medical treatments.

Singapore’s health insurance system is a bit complicated to learn, so if you want better and more extensive medical coverage, you’ll have to do some research yourself!

Worry not though, because we’re here to help! Today, we’re breaking down what you have to know about it to prepare you for possible medical expenses in the future.


What is health insurance?

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A health insurance plan helps us pay medical fees should we get injured, hospitalised, diagnosed with a critical illness, or become critically ill. How much is covered and which illnesses are included are depending on the policy you choose!

Some health insurance plans come with a cash payout to help with the medical bills, while others help cover the cost of medical treatments.

Either way, its main benefit is to help us from having to spend our entire life savings to settle medical expenses, which, without a doubt, can drain everything we have.

How does health insurance in Singapore work?

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In Singapore, all Singaporeans and Permanent Residents are entitled to public medical treatment subsidies which are covered under MediShield Life. It’s a basic government healthcare plan that mainly covers treatments at public hospitals and clinics.

The problem is, its benefits and coverage are limited. Yes, you may upgrade the MediShield Life with an Integrated Shield Plan to add private hospitals and larger wards and cover pre- and post-hospitalisation treatments.

Whether you choose to upgrade or not, you’ll have to shell out money (cash or Medisave) one way or another to settle the rest of the bill.

What are the types of private health insurance in Singapore?

1. Hospital cash insurance

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With hospital cash insurance, this refers to the fixed amount of money given should you find yourself needing to be hospitalised. The payout benefits can be used for multiple hospitalisations until the maximum number of days is reached, which is one of its best features if you ask us!

For example, if your hospital cash insurance provides coverage for 2 weeks of hospitalisation and you get hospitalised for exactly 1 week. That means that you have a week’s worth of cash payouts for future hospitalisations.

This type of insurance is generally recommended to freelancers, part-timers, and self-employed individuals who aren’t covered by private medical insurance but want some form of protection.

It also works if you have run out of sick leaves and hospital leaves! It will provide your family with some form of income while you’re recovering in the hospital.

2. Critical illness insurance

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As its name suggests, it gives you a sum of money upon getting diagnosed with a critical illness covered by the policy. The coverage and disbursement of benefits may differ from one insurance provider to another.

Some policies pay when you’re diagnosed, while others may cover the entire or partial cost of your treatments.

The good news is, major conditions like cancer, kidney failure, and heart attack are generally covered by insurance companies.

It’s suitable for young families who are saving up for a house, education fund, and retirement savings, and want protection for their savings.

With critical illness insurance, you’ll be less likely to wipe out your life savings or emergency funds to pay for your medical treatments should the unexpected happen!

3. Disability income insurance

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When you become disabled due to an illness or accident, disability income insurance will provide a payout worth almost 80% of your salary. It usually lasts for 5 to 10 years, or until you reach the age of 60 or 65, depending on the policy’s terms.

We’d strongly recommend it to breadwinners who have families to support. Signing up for disability income insurance is an amazing financial planning move that secures your family a portion of your monthly income should you become incapable of working.

Who should get a health insurance plan?

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While Singaporeans and PRs are covered for basic public hospital treatments under MediShield Life, everything else will have to be paid out of pocket.

For those who want wider coverage, better ward options, and also access to private hospitals, upgrading insurance plans and signing up for private healthcare plans are definitely worth considering.

Even if you’re young and healthy, check to see if your current coverage is enough for you. Waiting to develop serious health issues before getting a private health insurance plan could mean costly premiums and also risking having your condition being excluded from the policy!

For those who have dependents, a more comprehensive healthcare plan is a great investment to make. It'll save you from having to spend your life savings that could’ve gone to your child’s education plan or even your own retirement plan.

However, ensuring that you’re sufficiently protected is not enough, don’t forget to check if members of your family have adequate coverage too! Some health insurance plans even allow for immediate dependents to be added to the policy, for an additional cost, of course.

Protecting your future through health insurance

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We can never know what the future holds for us, but arming ourselves with a comprehensive health insurance plan is one way to prepare for it!

With the range of medical insurance plans available in the market today, it’s easy to choose one that fits our financial capacity, current needs, and our future goals!

If you’re looking to find out more about health insurance, or simply want financial planning or wealth management tips, send us a message! We can connect you with experienced financial advisors who can help you achieve your financial goals.


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