*This article was contributed by Vivian Chen, whose client had to cope with the devastating loss of her husband, her business, and deal with unpaid bills even months after his passing*
The Build Up
This scenario is probably replayed countless times across the ages, yet it still happens because people underestimate the severity of financial calamities when it hits them.
My client (Editor: let’s call her Madam Lim) ran a moderately successful trading business with her husband (Mr Wong – names are just for anonymity).
He was in charge of sales, she managed the finances. It brought in enough money for them month in month out, and they led a relatively comfortable life. Not rich by any means but enough to make ends meet.
Some people think they have their insurance affairs well taken care of by the government, and need no further coverage. Unfortunately, Mr Wong was one of them. He bought several policies from NTUC Income in the past, to support his friends in the business, but subsequently lapsed them.
(Editor: It is true that there are a number of government driven insurance policies that protect us from the worst. But when the time actually comes, most of us will invariably want more. Medishield Life, the Dependents Protection Scheme, the Home Protection Scheme, Eldershield are examples of government initiated schemes.
Also, buying policies just to “support” a friend is a flawed concept. Please buy insurance for the sole reason that it is needed, not because your friend needs to eat)
One fine day, just like any other, my client’s husband tripped and stubbed his toe badly on the sofa. It swelled up but they didn’t think it would be anything serious. The swelling turned slightly gangrenous (they didn’t know it at that time) so he grudgingly admitted himself to SGH “just in case”.
Unfortunately, Mr Wong was a diabetic – and that led to several complications, each more severe than the last. Initially, it was hoped that antibiotics would be enough to start the healing process, but soon the toe had to be amputated.
(Editor: This happens to diabetics frequently as they suffer from Periphery Artery Disease – a condition that leads to the narrowing of blood vessels to the legs and feet. The reduced blood flow makes it harder for the body to heal itself, and a reduced ability to fight infection. This is why tissues die and have to be amputated)
After the amputation, the condition worsened and the rot spread to his other toes as well. Before long, the entire foot had to be amputated.
Their nightmare didn’t end there.
Soon after, Mr Wong’s kidneys failed and he had to be put on Renal dialysis. 5 days led to 5 weeks. Then 5 months.
Then he passed away.
For a widow, it is never easy. First came the grief. The bills followed soon after.
Here were the various costs that Madam Lim had to settle.
This amounted to over 27k despite opting for simple rites.
Business Expenses: Closure and lost income
Throughout the 5 months when Mr Wong was in hospital, the business could not function and it had to be wound down, as Madam Lim was not working on it during that period as well. There were some suppliers and creditors that still had to be paid, which amount to a few thousand dollars.
This meant that she no longer had a source of income as well.
HDB Mortgage Loan
Typically, HDB requires mortgage owners to take up the Home Protection Scheme from them, as it secures the outstanding amount in event of death of the owner before the flat is fully paid up. Mr Wong initially had the HPS, but it lapsed years ago due to insufficient CPF funds (He belonged to the self-employed category but did not keep up with his contributions)
To date, the outstanding amount remains at 30k and Madam Lim has to service the monthly loan amount of $500.
Here was where the biggest scare came for my client. Despite her husband opting for the lowest cost ward, the initial 5-month bill came to over $380,000. A princely 6 figure sum.
How? Here were the major contributors:
149 Days of Ward fees: $76,861 (A combination of regular C ward stay, high dependency ward stay, and Surgical Intensive Care Unit stay)
Lab and X-ray Investigations: $54,477.60
Renal Dialysis: $34,388.50
Drugs and Consumables: $78,492.02
Surgical Fees: $53,288
Thankfully for Madam Lim, even though the initial bill was over $380,000, the government took care of $249,000 of that bill because her husband was a Singaporean and stayed in a C class ward. Medishield Life took care of another $94k of the bill that remained.
All in, the final payable amount was just over $37,000, of which $10,000 was settled using money from her own Medisave account. She is still paying off the remainder of the bill: $27,000 which has to be paid in cash.
When all’s said and done
My client was suddenly saddled with up to $87,000 in liabilities, much of which had to be settled in cash and within a short period of time.
Most of it could have been avoided if her husband only kept the HPS going, and several of his original policies which had a cover amount of over $45,000.
Eventually, things should still work out for her, as I submitted her claims under the Dependent Protection Scheme, and eventual disbursement of Mr Wong’s CPF funds (thankfully he did make a nomination, hence the process was shortened). Also, his bank account monies have been released to her as well, since they have no children.
All in, it took over 3 months for her to get back on her feet, all while worrying and wondering how she would settle the bills.
There is really no room for stubbornness. Vivian’s own words are: Don’t be so metal teeth (ti ki – Hokkien term) when it comes to protection.
Don’t be misguided into feeling that insurance isn’t necessary and that it is a waste of money. The sole aim is not to have a return on investment on it (Insurance isn’t an investment) but not to leave debts behind for your family members.
It also helps to set up the estate distribution beforehand so that any remaining assets can be disbursed without undue delay.
If nothing else gets through – just know this:
The smallest of policies mean a world of difference when the time comes.
About the Contributor
Vivian has been a practitioner in the industry for over 10 years and is currently representing one of the largest Insurers as a Financial Consultant.
She attributes her longevity in this industry to her personal motto: Do good to others and good will come to you.
We are grateful to Vivian for taking the time to narrate the whole process and helping us to further the cause of Insurance education. Madam Lim is only one of the many clients she has helped and she intends to keep doing this because it is her passion.
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