What's an acceptable premium for medical insurance for parents?

Hi anon,

CI and early CI is not classified as medical insurance. Medical insurance takes care of the bills, and that would be their hospitalization plan. CI/early CI falls under the realm of life insurance, which pays out a lump sum upon fulfillment of certain criteria (e.g. CI or TPD, etc).

Whether or not the price is high can be known if you compare across the insurers, assuming the same type of coverage (although no two insurers have exactly the same features for their plans, so it will not be exactly apple to apple). What's more important is whether the amount that they are insured for is enough. I'd normally recommend sufficient cover for 5 years of expenses and an additional lump sum for out of pocket expenses.

Assuming that amount of $100K is what they needed, then what you were probably quoted is a whole life insurance with a limited payment term, and likely to be one with a 2x multiplier, without early critical illness. When one is in their 50s, early CI tends to be extremely expensive. However, such policies will build bonuses over time so the true value of the policy is that it is inflation hedged. They will also be covered for life.

I'd recommend that you take a look at their budget as well. If they are spending 10% of their income on insurance should they get this plan, then it is on the high side and you might want them to consider carefully before proceeding. It might be good for you to get quotations of similar plans from an independent financial advisor to help them understand the options available.

Don't neglect other classes of insurance as well; Eldershield and the supplements are just as important.

Feel free to reply to this post if you have further questions.

Hey Anon, firstly medical insurance is not CI. That's life insurance. Medical insurance is the hospitalisation plan they already have.

Their medical bills will be taken care of, but what you may want to make provision for is cost for alternative medicine, and additional long term medication and nursing costs if they fall ill and require assistance.

So if you're looking to get them Critical Illness cover that would pay a lumpsum upon diagnosi, you have to decide how much cover, and then for how long.

It is recommended to have between 3-5 X Annual Income as coverage and I suggest having some coverage for a term till about 70 and some cover for whole of life. A mixture of both may be beneficial.

Also, if they haven't already, they should also consider getting additional Eldershield payouts via a Supplementary plan that would give a higher payout for life with an easier to claim criteria.

You should speak to an Independent Financial Advisor to compare across multiple insurers.