Help! I need to get my parents insurance...
The importance of healthcare cannot be undermined in the world we live in today. This is especially so in the case of the elderly. The human body is vulnerable to all kinds of illnesses as it ages. The truth of the matter is older people use far more health care services than the younger generation. Many of them have at least one chronic condition that requires care.
With the Covid 19 pandemic impacting the global economy in drastic ways, it has come to be known that the risk for severe illness with Covid 19 increases with age. Older, unvaccinated adults are more at risk and end up requiring longer hospital stays and more intensive treatment especially those with pre-existing ailments.
How does this impact us? Being the Sandwich Generation, we need to look after both our parents and children; this can be a tall order. All it takes is for one debilitating illness or injury to go from sandwich to toast in an instant! This is the reason why whenever I speak to my clients, especially those with families, I tend to pose the question of whether their parents are insured or not.
Most times, the answer is “I don’t know what my parents have!” or “yes, I think they have something, but I am not sure what it is.”
Speaking about insurance in most families is not an easy thing. In fact, I have heard some clients lament about their parents who do not believe in insurance at all due to the “jinx” factor. “Haiya.. better don’t buy insurance, if not sure claim. Why are you inviting an illness onto yourself?”
On the other hand, I have also encountered many older folks who have exceptional employee-benefits-insurance whilst they are working, and as they approach retirement, look towards getting their personal insurance in order as there is no longer the company insurance to fall back on. Unfortunately, you would be surprised at the number of times whereby in the years leading up to them buying their personal insurance coverage, they end up being diagnosed with illnesses such as diabetes, high blood pressure, high cholesterol and so on. These illnesses are common amongst the elderly in Singapore but are also the same illnesses that make buying insurance harder when they are older.
Then there are those who compare what types of insurance their friends have without knowing the benefits or premiums that come with them. All they know is that they need to buy insurance but are unsure what they need exactly. When I sit down with them and go through premiums, they are shell-shocked at how expensive it can get, especially the older they are. And in some cases, they downplay any illnesses they may have for fear of not being able to get insured. This is especially so after witnessing friends or family members getting ill and facing hefty hospital bills.
If you have parents and you are concerned about what type of insurance policy you should get them, the following points can help you decide.
1. Do they have a hospital plan?
The most basic insurance policy one should have is a hospitalization plan. This goes for our seniors as well. If your parents do not have a hospital plan, I would recommend that you insure them with one as soon as possible, especially if they are still healthy and insurable.
Though most Singaporeans and PRs are insured under Medishield Life, that basic insurance policy provided by CPF Board is not going to be sufficient should there be a large hospital bill. I once had a client whose father-in-law incurred over $700,000 in hospital bills for cancer treatment in a private hospital in Singapore. Yes, you can choose to go to a restructured hospital to get treated as well and the costs will be lower but will the $150,000 yearly limit on Medishield Life be sufficient especially if a major illness were to strike?
2. Do they have an accident policy?
The older you get, the more susceptible you are to falls and injuries. Knee, shoulder and spine-related injuries, hairline or compound fractures; all these become more common as one age. Unfortunately, sometimes, complications can arise when falls are severe. I have a 62-year-old client who has claimed multiple injuries in the span of the ten years that she has been insured. And these injuries were sustained doing everyday things like cooking in the kitchen, stepping out of the shower onto a bathmat, and once tripping and falling at a shopping centre!
An accident policy is good to have for your parents as it allows for outpatient treatment due to an accident. Scans such as X-rays and even MRIs are commonplace where accidents are concerned, and these are not cheap. An accident plan can cover the cost of such tests as well as the required follow-up treatments such as physiotherapy that can be long drawn.
3. Do they have a critical illness policy?
It is never easy seeing a parent get critically ill. These are the people who looked after us when we were young, tending to every bruising, swelling or pain. The emotional stress is hard but the financial stress could be harder especially when their care is in concern, and money for treatment is not easily available.
If your parents have a critical illness policy that pays out upon a diagnosis of a critical illness, this could help defray some of the costs that would be incurred. Such costs include transportation, hiring a helper or a nurse, making new housing arrangements and so on. However, if they do not already have an existing plan, getting a new insurance policy for them at this age to cover critical illness can be costly. I have an elderly client who purchased a critical illness policy for herself even with the higher premiums as she did not want to burden her children if she became ill.
The question then becomes not so much how much it costs but more of who pays the premium. If you have siblings, you can consider sharing the burden and contributing towards a critical illness policy for your parents if they are still able to purchase one.
What are some considerations you need to think about before getting your parents insured?
Are your parents insurable? What are the medical conditions they suffer from? During your application process, you will need to declare their medical history which includes any hospital stays, surgeries, illnesses or even medication being taken. Diabetes is a fairly common illness amongst the elderly in Singapore. However, someone with diabetes will find it extremely hard to purchase medical insurance for example as the case would most likely be declined. Being truthful in your insurance application helps to ensure that your claims process in the future is easy as there will be a lesser chance of the insurer repudiating a claim.
Preference of Medical Care
With premiums on the rise especially for Private Hospital coverage, the question that needs to be asked is whether your parents would opt to go to a private hospital for treatment or would be comfortable with a restructured hospital for treatment. The main difference between private and restructured hospitals (apart from the massive difference in bill size) is waiting time. I know of a friend whose mother presented with severe back pain. The closest date she could get in a restructured hospital was 3 months away. As her mother had private insurance coverage for her mother, she decided to send her mother to a private hospital where several tests were conducted within two weeks, and shockingly, her mother was diagnosed with having cancer.
Sustainability of Premiums
Are your parents able to afford their insurance premiums even after they have retired? Premiums especially for hospitalization will need to be paid for as long as they live (or want the coverage). If they are unable to sustain the premium, do they then downgrade their coverage? Alternatively, if you and your siblings feel that the insurance coverage is essential, perhaps you can consider sharing the premium amongst your siblings and ensure that your parents’ coverage can still be maintained. After all, if your parents are hospitalized or ill, you might face a larger bill than the premium you need to fund!
What happens if a parent is uninsurable?
In this scenario, it may be wise to get all the other family members who can be insured, insured. And then use the Medisave funds available for the uninsured parent. There is also the option of Medishield Life so opting for a restructured hospital and a lower-class ward (B2 and below) might help as that is where the highest level of subsidies set in. Ensuring that there is enough emergency funds should something untoward happen is also wise as there would be enough liquidity to tap into should the need arise.
In any case, do a stock take immediately of the insurance policies your parents may or may not have and see how best to cover the gaps. If you are unsure of how to start, feel free to message me and I would gladly sit down and talk you through the process!