Hospitalisation Insurance (H&S)
Asked on 01 Nov 2019
My parents (52 & 53) are only covered with NTUC hospitalization plan. For context, they only have each other as dependents as my sister and I are working adults already. They have a house that has not been fully paid for and limited cash savings. I'm not sure what additional insurance I should get for them. Please advise.
Based on the information you provided, you'll have to look at the following:
Term coverage. This covers the liability for the house since it is not fully paid yet. This can be through HPS, but if they have term insurance covering that, it works as well.
Critical illness. As they are still working, any CI will cripple their ability to work and pay off the house. They'll have to deal with the loss of income as well. You'll want to ensure that they have some CI cover just in case.
Hospitalization plan. Look into getting a rider for them if they do not have one yet; if they do, consider the cost over the long term. It might be financially prudent to downgrade to government A ward coverage if the cost is a concern.
Long term care coverage. This will cover them should severe disability occur and the expertise of nursing care or even a nursing home is required. This can place a strain on finances if not managed properly. They should be on Eldershield, and it will be recommended to enhance their coverage since the default payout is too little. If they are not, they should enrol back into it.
Guaranteed lifetime income. If they have sufficient amount in their SA, then CPF life will form the foundation of their retirement income. If more funds are available, then consider boosting their retirement income with an annuity, which will help to improve their retirement standards.
Personal accident. As the elderly are more prone to accidents, consider an accident plan for them such as NTUC silver care to defray related costs.
Feel free to reply if you have further queries or need clarification on any of the points.
Hey Anon, here could be some areas you could consider.
1) If they're staying in an HDB, they should have the Home Protection Scheme which is mortgage term insurance policy that pays for any remaining mortgage balance in the event of the death of the homeowner. So no additional life insurance is required to cover this liability.
2) For healthcare costs, their NTUC shield plan would be sufficient if they maintain paying premiums. But you do need to plan for increasing costs of the policy and its rider. If they're on the old 100% claimable plan, they may want to consider the newer 95% plan to reduce premiums.
3) The next area of consideration would be long term care and disability. Should any of them be disabled and require care for nursing, there will be an additional cost of living incurred. Thankfully, in Singapore, we have the Eldershield scheme which would pay either $300/mth for 60 months or $400/mth for 72 months depending on which scheme they are on. However, this is grossly insufficient. You may want to upgrade their Eldershield with a supplementary plan from either Aviva, Great Eastern, or NTUC to get a higher payout of closer to $1.5-$2k for life. This is my biggest area of focus for my career.
4) Next would be retirement planning or income planning once they stop work. This would start with CPF and CPF Life, and then if you require more, consider getting an annuity or a retirement income plan from an insurer to supplement this need for income in old age.
5) Lastly, an accident plan. As they grow older, they may be frailer and prone to injuries. And not all accidents would result in hospitalization. So a good accident plan to cover for medical reimbursements and support for temporary disability may be ideal.
You may be interested to speak to an Independent Financial Advisor Rep to help with planning for your parents. It would be good for you to have a clearer picture first before getting your parents involved in the process.
95% of my clients are Singaporeans in their 40s and early 50s and I focus on exactly the areas covered above. If you're interested to speak with me regarding this, I'm available via FB messenger or via my email: [email protected]
I hope this has been helpful. :)
Need a bit more info to really give a good answer but for barebones things to consider:
Is the home loan covered by some MRTA and/or HDB scheme already? If not, priority would be to sort that out ASAP to avoid severe difficulties in case unfortunate happens. The rest would be less urgent.
Are they both working with roughly equal salaries that is sufficient to support themselves if the other were to get into trouble? If it is uneven, you want to focus on breadwinner, otherwise cover both Once sorted who really needs the protection, in terms of amount, aside from house loan (covered above) suggest a amount to cover any other liabilities (outstanding personal/car/etc loans) and on top smallish lump sum to deal with largeish expenses in case of critical illness (for cost size suggest term+accelerating CI).
That's the basics, there is plenty of frills in terms of other events / multi-pay and amount of SA you can consider based on own feeling of cost/affordability but the above two I suggest as the bare minimum.
PM if want to discuss more.