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A Beginner’s Guide To Health Insurance: All You Need To Know & Types Available

profileXue Miao

Insurance can be a really intimidating topic.

I mean, I grew up thinking that insurance was a money-sucking machine and thought that it would be better to keep it out of my life.

And as I got older and realised the importance of it, this newfound information came tumbling into my brain like an avalanche.

There were just so many new terms and different types of policies to comprehend.

And it’s easy to not know where to start.

Source: Tenor

Those who have started looking into their insurance needs would know that we should only be covered for what we need.

And when it comes to our needs, health insurance is something that would always be mentioned as one of the key insurance policies to have.

Given the number of mandatory insurance policies that we have, it is easy to lose track of what we are covered.

And if you’re a confused soul like me…

This article is a quick guide to the health insurance coverage you have (under national schemes), and also coverage that you might want to look into.

Disclaimer: As with all insurance articles, we urge you to approach a trusted licensed advisor that you trust to help you make objective comparisons. Do always assess your own insurance needs! 

TL;DR: All You Need To Know About Health Insurance: Types of Health Insurance and What They Cover

Health insurance is the type of insurance that helps with medical expenses when one becomes ill, injured or disabled.

It can provide coverage in different forms, such as covering your medical or hospital bills, provide an income when you’re hospitalised or when you’re not fit for work.

Type of Health InsuranceCoveragePremiums Payable By
MediShield LifeInpatient and outpatient treatments (for up to Class B2/C wards in public hospital)

Includes pre-existing conditions
Fully payable via MediSave

Family members can also pay premium on behalf
Integrated Shield PlanEnhanced coverage for inpatient and outpatient treatments (Private hospitals, A/B1 ward public hospitals)

Might exclude pre-existing conditions
MediSave can be used, subjected to Additional Withdrawal Limits (AWLs)
CareShield LifeLifetime payout for severe disability, including individuals with pre-existing severe disabilities Fully payable via MediSave
Disability Income InsuranceFixed sum each month to replace loss of income during active employment yearsPayable by cash
Critical Illness (CI) InsuranceLump-sum payout for 37 severe-stage medical conditionsPayable by cash
Hospital Cash InsuranceIncludes cash benefits for day surgery, recuperation, overseas hospitalisation or medical evacuation etc.Payable by cash

MediShield Life

First up, we have MediShield Life.

MediShield Life is a basic health insurance plan, which all Singaporeans and Singaporean PRs are automatically enrolled in.

It helps you to pay for large medical bills and even certain types of outpatient treatment like dialysis or chemotherapy.

At a glance, MediShield Life offers:

  • Better protection and higher payouts, so you pass less MediSave or cash
  • Lifetime protection including pre-existing conditions

What Am I Covered Under MediShield Life?

MediShield Life covers both inpatient and outpatient treatments, with its benefits as follows:

 Claim Limits
Inpatient / Day Surgery
Daily Ward and Treatment Charges: Normal Ward $800/day
Intensive Care Unit Ward $2,200/day
Community Hospital $350/day
Psychiatric $160/day
Surgical Procedures:
Less Complex to More Complex Procedures
$240- $2,600
Implants $7,000 per treatment
Radiosurgery $10,000 per procedure
Continuation of Bone Marrow Transplant Treatment For Multiple Myeloma $6,000 per treatment
Outpatient Treatments
Chemotherapy For Cancer $3,000 per month
Radiotherapy For Cancer $300-$1,800 per treatment
Kidney Dialysis $1,100 per month
Immunosuppressants for Organ Transplant $550 per month
Erythropoietin for Chronic Kidney Failure $200 per month
Long Term Parenteral Nutrition $200/month
Maximum Claim Limits
Per Policy Year $150,000
Lifetime No Limit

*From March 2021 onwards

MediShield Life mainly serves as basic health insurance to help Singaporeans defray medical costs.

For instance, its payouts would mostly cover the cost of Class B2 or C wards of public hospitals.

However, some might prefer to ensure less out-of-pocket expenses when the need arises.

To enjoy greater flexibility in terms of

  • The types of hospital ward you can stay in
  • The types of treatment
  • Annual coverage limits

You may want to opt for an Integrated Shield Plan as an add-on to enhance your medical coverage.

How Do I Pay for the Premiums of MediShield Life?

The premiums of CareShield Life are fully payable via MediSave.

Family members such as spouse, parent, child, sibling or grandchild with sufficient MediSave balance can also pay for your MediShield Life coverage.

Integrated Shield Plans

Source: Ministry of Health

An Integrated Shield Plan is an ‘upgrade‘ of your MediShield Life, where they are offered by private insurers and provides additional medical coverage.

Depending on the type of Integrated Shield Plan that is chosen, the protection can be enhanced to provide coverage for areas such as hospitalisation benefits, claim limits and coverage for private hospitals and public hospitals (A or B1 wards).

With the increase in coverage, one can expect the premiums for Integrated Shield Plan to be much higher as compared to MediShield Life.

 What Am I Covered Under an Integrated Shield Plan?

Here’s a quick overview of the differences between MediShield Life and an Integrated Shield Plan:

 MediShield LifeIntegrated Shield Plan
Coverage For Public hospital (B2 or C wards)Public hospital (all wards) and private hospital
Policy Annual Claim LimitUp to $150,000Up to $2 million
Amount PayableDeductibles, co-insurance, expenses that exceed the coverage limitDeductibles, co-insurance, expenses that exceed the coverage limit
Additional Coverage-Includes coverage for areas such as pre- and post-hospitalisation treatment, and emergency overseas treatment

However, while MediShield Life covers pre-existing conditions, Integrated Shield Plan policies might only be accepted if the individual is healthy.

This is depending on the insurer, and applications might be either modified or rejected if an individual has pre-existing conditions.

As such, it is recommended to not switch plans if your current plan covers your pre-existing condition.

How Do I Pay for the Premiums of Integrated Shield Plans?

There are Additional Withdrawal Limits (AWLs) for using MediSave to pay for Integrated Shield Plans.

The AWLs is as follows:

  • $300 if you are 40 years old or younger on your next birthday.
  • $600 if you are 41 to 70 years old on your next birthday.
  • $900 if you are 71 years or older on your next birthday

Each insured person can only have one Integrated Shield Plan paid with MediSave.

CareShield Life

Another national health insurance scheme is Careshield Life.

Instead of providing coverage for medical bills, CareShield Life focuses on providing support for Singaporeans in an event of severe disability.

This includes individuals who have pre-existing severe disabilities before this scheme was implemented.

 What Am I Covered Under CareShield Life?

CareShield Life offers a lifetime payout (which increases over time) as long as you are severely disabled.

Severe disability is defined as needing assistance in at least three of these activities of daily living (ADLs):

  • eating
  • getting dressed
  • using the toilet
  • bathing
  • moving
  • walking around, and
  • getting from the bed to a chair or vice versa

Individuals born later than 1980 will automatically opt into this scheme.

For those born in 1979 and earlier, the current Eldershield will remain in force, or individuals can choose to join CareShield Life from 2021 onwards.

The monthly payout begins at $600 in 2020 and increases by 2% for the first 5 years.

YearMonthly Payouts
2020S$600
2021S$612
2022S$624
2023S$637
2024S$649
2025S$662

Source: Ministry Of Health

Similar to Integrated Shield Plans for MediShield Life, there is also an ‘upsize‘ option when it comes to CareShield Life.

You can choose to increase your payouts by up to five times with a CareShield Life supplement.

How Do I Pay for the Premiums of CareShield Life?

The premiums of CareShield Life are fully payable via MediSave.

Premiums begin from age 30 to 67.

They currently start at $206 for male and $253 for female — starting at age 30 for both, and will increase at a rate of 2% a year for the first 5 years.

Anyone with a severe disability at the joining age of 30 has to pay only the first premium in order to qualify for lifetime payouts.

Disability Income Insurance

Payouts for CareShield Life kicks off when there is a severe disability, and focuses more on the needs of long-term care.

On the other hand, Disability Income insurance aims to provide coverage for the loss of income from the inability to work.

In short, it serves as an income replacement that helps you cover your active employment years.

Disability Income insurance can provide payouts as long as the disability affects the performance of your duties at work.

For instance, a singer who suffers an injury on his/her voice might not meet the criteria for CareShield Life, but would be able to make claims under this type of policy.

What Am I Covered Under Disability Income Insurance?

Disability Income insurance pays a fixed amount each month to replace the income that is lost, and it pays up to 80% of your monthly average salary.

This monthly income may be paid for up to 5 or 10 years, or until 55, 60 or 65.

Payouts usually stop or are reduced when you’re fit for work again.

Do note that the definition of ‘disability’ varies according to the insurer, so be sure to clarify beforehand.

How Do I Pay for the Premiums of Disability Income Insurance?

Premiums are fully payable by cash.

Critical Illness Insurance

Almost 1 in 4 people may develop cancer in their lifetime.

In an unfortunate event where such news had to be dealt with, the least we would want to worry about is the medical treatment costs.

According to LIA, there are 37 severe-stage medical conditions that are defined as Critical Illness.

This includes major cancers, heart attack or stroke.

What Am I Covered Under Critical Illness Insurance?

Critical Illness (CI) Insurance plans are in place to provide lump-sum payouts when a major illness is diagnosed, such as cancer.

These plans exist in different forms – they can be standalone plans or can be purchased as a rider of your life insurance policy.

Both the coverage and payouts would differ according to the insurer and type of policy, with insurers covering multi-stage CIs or pre-existing conditions.

However, it is required to meet the policy’s definition in order to receive payouts.

Regular CIs usually cover illnesses that are diagnosed at late stages

As such, there is also an option to purchase an Early Critical Illness (ECI) policy for individuals who wish to be covered during the early stages as well.

There is also an option to purchase cancer insurance, which as its name suggests, provides a more holistic coverage in terms of cancer.

How Do I Pay for the Premiums of Critical Illness Insurance?

Premiums are fully payable by cash.

Hospital Cash Insurance

Last but not least, we have hospital cash insurance.

As its name suggests, Hospital Cash Insurance offers cash benefits when you are admitted to the hospital.

What Am I Covered Under Hospital Cash Insurance?

Hospital cash insurance aims to alleviate financial worries during hospitalisation, and typically offers daily hospital cash payouts.

Besides having MediShield Life which might have covered inpatient and outpatient treatments, hospital cash insurance can help cushion the financial worry of additional expenses incurred from hospital stays.

The extent of coverage also varies according to plan, where coverage may include cash benefits for procedures such as day surgery, recuperation, or overseas hospitalisation or medical evacuation.

How Do I Pay for the Premiums of Hospital Cash Insurance?

Premiums are fully payable by cash.

Types of Health Insurance and What They Cover: Should I Increase My Coverage?

In a society where we constantly face high stress and a lack of sleep, our health is something we tend to take for granted.

Having sufficient health insurance coverage is important as it can create a safety net without having our life savings taking a toll if our health were to go south.

That being said, we should always ensure that we are getting sufficient coverage for the right reasons at the lowest cost.

In addition, besides getting properly insured, another important (and often neglected part) for us to remember to go for regular health checks.

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About Xue Miao
A millennial who is learning to adult. She doesn't believe in the rat race and hopes to live on a farm someday.
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