Myths about Private Shield

This article explains some myths about Private Shield that cause many people to be spending a lot of money wastefully.

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Lim Pueh Joo: Investment-linked policy works best for me

Letter published in Straits Times Online Forum

Nov 19, 2010
MR TAN Kim Lian's line of thought ("Why only term insurance plans make sense now"; Monday) continues to perplex.

 He assumes term insurance is sufficient because it is low cost and gives the highest cover per dollar. This can be dangerous. Never decide based on price alone.

Term insurance is low cost but it may not be cheap in the long term. Once the insurance period ends, underwriting is required for renewal. If a person develops a medical condition before renewal, that no insurance company will accept, the person will be uninsurable for life. Also, if a person loses his job and cannot pay the premium when due, the cover terminates.

With whole life and investment-linked policies, there are usually cash reserves to automatically tide over the non-payment of premiums for some time when the policyholder is unable to pay.

 I have different policies from various insurance companies for my family. My best policy is my investment-linked one. Not only does it give better returns than projected in spite of the different financial crises over the years, but it also gives me the flexibility to vary the premiums and cover through my different life stages.

I am also aware the insurance company made more money, but who cares when it is a win-win situation. We should be thankful that there are now more life insurance choices for people with different needs. 

Lim Pueh Joo (Madam)

http://www.straitstimes.com/STForum/OnlineStory/STIStory_604763.html


View this letter in Wordle


Update
I have sent my reply to this letter. I hope that the Straits Times will published it. I also hope that some of my readers will write a reply to this letter from Mdm Lim.


Read this article:
Investment-linked policy - the good and bad
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Medical insurance for elderly people

Dear Mr.Tan,

I enjoy reading your blog as I get to learn many useful knowledge from you. 

May I seek your advice. I intend to buy health shield for my parents who are not working for anyone.

My mum is a housewife and my dad is doing manual work with no insurance.  The yearly cost for one person is about $800+ as they are above 61 years old. If health shield is not advisable, what are the other alternatives?

REPLY

t is better to buy Medishield, as the premium is about half to one third of Private Shield and the co-payment is lower. For elderly people, it is better to be treated in subsidised ward (B2) rather than in higher ward. 

I am personally insured under Medishield, as I do not want to pay 2 to 3 times the premium for private Shield. Read this FAQ:

http://tankinlian.com/admin/file.aspx?id=229

The premium for Private Shield will increase sharply as your parents pass the 70 and 80 year bracket. It can be 2 to 3 times of the current premium. 

Here are the premium for Medishield:

http://www.moh.gov.sg/mohcorp/uploadedFiles/News/Press_Releases/2008/MSH%20Payout%20-%20Annex%20B.pdf

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