by Jermaine Koh
If you’ve only got a minute:
- Check on your parents’ coverage for hospital, critical illness and long-term care needs.
- Review their plans for gaps, add supplements as needed and consider additional coverage options where necessary.
- Regularly reassess their coverage as their health and lifestyle change, ensuring protection keeps pace with evolving needs
As your parents age, safeguarding their health and financial security becomes a higher priority for many families. With healthcare costs steadily rising, it’s easy to assume that existing insurance policies will suffice. But some have outdated or insufficient coverage which exposes them to potentially overwhelming medical bills.
Ageing brings more complex healthcare and financial needs. Hospital stays, long-term care and the risk of critical illness all become more likely, and the gaps in insurance coverage can widen if policies aren’t reviewed and updated regularly.
Without adequate protection, families may find themselves scrambling to cover expenses or making difficult choices about care.
Addressing these insurance gaps early is not just about managing costs. It’s about ensuring your parents receive the care they deserve and giving your family peace of mind in the face of unexpected challenges such as poor health.
Understanding your parents’ needs
The first step to closing insurance gaps is gaining a clear picture of your parents’ health, lifestyle and financial priorities.
Key questions include:
- Have they saved enough for their retirement and other financial goals?
- Do they have chronic illnesses?
- What are their preferences for medical care - public or private hospitals?
This understanding is the foundation for making informed decisions.
Scenarios, solutions and trade-offs
Some seniors in Singapore may only have basic insurance, relying on government schemes like MediShield Life.
While this covers large public hospital bills, it may not suffice for those needing more comprehensive or private care. As your parents age, gaps in coverage can emerge, especially if policies aren’t reviewed regularly, leaving families exposed to significant out-of-pocket costs.
Actionable steps
To ensure adequate protection for your parents, it is important for family to regularly review their insurance arrangements, explore supplementary private plans if necessary and consider additional coverage options that can help bridge these gaps.
1. Review coverage
Check if your parents have sufficient and suitable hospitalisation, long-term care and critical illness insurance. Older policies may have low limits or exclude new treatments and pre-existing conditions.
2. Key insurance types for parents
a. Hospitalisation insurance
This is foundational for parents, especially as medical costs rise with age. In Singapore, all citizens and permanent residents are automatically covered by MediShield Life, a government-administered health insurance plan that can defray large hospital bills and selected outpatient treatments at B2 and C-class wards in public hospitals.
However, this may not meet all needs, especially if your parents require or prefer treatment at private hospitals or in higher-class wards. Integrated Shield Plans (IPs) offered by private insurers are available to enhance this coverage, but enrolling elderly parents in these plans can be expensive, and some insurers may impose exclusions or loading (higher premiums) due to pre-existing health issues.
Comparing different plans and understanding the terms and conditions is important to ensure that the chosen coverage matches your parents’ healthcare preferences and your family’s budget.
b. Long-term care insurance
CareShield Life is Singapore’s national long-term care insurance scheme, providing basic lifetime payouts if your parents become severely disabled and are unable to perform 3 or more Activities of Daily Living (ADLs).
While this offers essential financial support, many families seek additional coverage to ensure higher payouts or protection for milder disabilities.
Through the DBS Health Marketplace, your parent(s) can buy CareShield Life Supplements from insurers like Singlife. These supplements boost the basic CareShield Life payout with higher monthly benefits if your parents become severely disabled.
Some plans also pay out earlier - once your parents are unable to perform 1 or 2 ADLs. Additional benefits may include lump sums, caregiver support or rehabilitation payouts if your parent(s) recover some function.
They are a practical way to increase monthly payouts, access benefits earlier, and secure additional support - all while leveraging MediSave for premium payments. This helps ensure your parents have robust coverage for long-term care needs.
Premiums can be paid using MediSave (up to S$600/year per person) or cash.
c. Critical illness insurance
Critical illness (CI) insurance pays out a lump sum upon diagnosis of a specified CI, helping to cover alternative treatment costs, hiring help or making necessary home modifications.
Do note that premiums can be high for seniors and coverage may be limited for those with pre-existing conditions.
While such plans can provide a valuable lump sum payout in the event of a major illness, the premiums for seniors are relatively much higher, and coverage may be limited or unavailable if your parents already have significant health concerns.
In cases where CI insurance is too costly or not feasible, you may need to consider alternative strategies, such as getting cancer-only coverage and setting aside dedicated savings for medical emergencies.
d. Additional considerations
Declare all pre-existing conditions when applying for insurance to avoid potential issues with claims later.
Premiums at older ages can be significantly higher, especially for CI and private hospital coverage. Affordability is key so plan your budget wisely considering future premiums increases.
Consider building a dedicated fund for potential out-of-pocket medical expenses. And save by contributing regularly to a high-interest savings account.
In summary
The best time to review and strengthen your parents’ insurance coverage is now - before a crisis arises. With careful planning with them, you can ensure your parents enjoy their golden years with comfort and confidence.
