Asked 5d ago
I am 29 this year with the NTUC ISP with private coverage and full rider. The premium increased significantly again this year and my cash outlay is 700+.
While I can still afford it, is it wise to downgrade the rider? It seems like the premium pct increase is higher than the other riders.
In your opinion, what is the optimal pct of disposable income to spend on health insurance? (Healthy 29M)
It Helps to understand how hospital riders work. Hospital riders covers different costs such as the deductibles (ward associated costs) and co-insurance (a kind of cost that payee makes which is 10% of their total bill less deductibles). As the rider covers these costs, it means it also covers the entire hospital bill since the ISP alone covers the surgical/hospitalisation costs. The different riders, of course, covers different extent of the different costs. If you feel that financially its a stretch, you can think of downgrading it. Do note that after downgrading it, you will have to make a mandatory 5% co-payment (different from co-insurance) For your hospital bills.
Regarding the costs to pay for insurance, the total costs of insurance really Should not take up more than 10% of your annual income (including health, life/CI insurance etc). Health plans are typically a flat out rate given so there is little control over that, unless you downgrade your ISP to public hospital coverage or the rider itself. So it boils down to what is your financial Status, comfort level and preference.
Ultimately do seek out the advice of a financial advisor to explore your options.
Financial planning is an integral part of life. You can reach me here to find out more. .
You will have to decide for yourself whether you are willing to give up the old scheme rider because once you switch, you will not be able to get the rider back. All new riders will need to incorporate a co-payment of 5% or more, however the premiums will be alot alot cheaper.
I roughly did a calculation for the total premium for NTUC enhance incomeshield - P & Income Plus Rider - P. Between aged 30 to 85, the total premiums you need to pay is around $296,169. My calculations may not be accurate, it is still best for you to get the premium table from your agent and calculate it yourself.
Compared this to Great Eastern's Great SupremeHealth - P Plus & Totalcare Classic - P, total premiums of $168,698. That's about $120k ++ over the 55 yr period!! This amount is even enough for you to pay your co-payment if you were hospitalised 40 years ($120k/$3k) out of the 55 yr period!!!
So decide for yourself whether it is worth keeping.
Feel free to contact me (email at bio) if you are interested to find out more.
If you have no pre-exisiting conditions, you are free to do what you wish, according to your financial capabilities.
Since you said that you can still afford it, and if your total insurance doesn't exceed 10-15% of your annual income.
My recommendation is to stick with it. Because full rider policies are no longer available. Until you feel like it is no longer worth.
Disability Insurance , Personal Accident, Hospitalization. etc
Critical Illness, Term / Whole Life, Mortgage insurance. etc
Combined, our industry guidelines would be about 10-15%. but it depends on individuals.