We like to think of ourselves as being intelligent. Who doesn’t?

As far as possible, we make smart decisions on a daily basis. Especially when it comes to money. Investments. Insurance.

It may come as a mild surprise, but roughly one-third of Singaporean residents have no form of Integrated Shield Plan cover. That translates to over a million people, and yet another million only have a Shield Plan without any accompanying riders. (source: LIA)

Since it is entirely plausible that among these two million residents, a large portion of them have other investments and insurances to their name, the question looms.

Why do they not prioritize a fully bought Integrated Shield Plan, when it is actually the soundest financial decision to make?

We present a series of (hopefully) cogent and sensible points that could make the difference between financial comfort and financial catastrophe.

Medical and technological breakthroughs are made daily

Let’s start with a little bit of good cheer. Though we cannot defeat death, humanity has certainly been doing its level best to delay it – and we have been experiencing great success in this endeavor.

In the old days, patients with unresectable liver cancer — where it was not possible to surgically remove part or all of the affected liver — were given a few months to live. These days, new treatments such as live-donor liver transplantation, and even an oral chemotherapy drug, are available. They can prolong the lifespan of such patients.

Dr Desmond Wai, on http://www.todayonline.com/singapore/low-down-rising-medical-costs

What used to be considered life ending (Terminal), can now even be considered optimistically. Even end stage cancer may no longer be a death sentence, as clinically proven by this US pharmaceutical company in Feb 2017. That breakthrough was less than 3 months ago!

The list of breakthroughs is not just limited to cancer treatment. They include:

• Highly precise surgical robots replacing surgeons
• More effective drugs to treat Type 2 Diabetes
• Inhibitors to silence the cholesterol creating gene (no more HDL!)
• DNA Manipulation (why treat disease when you can delete it)
• Synthetic blood synthesis (a boon for people with rare blood types)

The robo-surgeon: Coming to an operating theatre near you

Just as you are done reading this paragraph, there could well be another medical science development that could save your life.

It does come with a side effect though.

Chances are, you will end up in hospital

And we don’t mean only as a visitor. That is not a mean-spirited comment, but one that is backed by actual research. Do hear us out.

Each year, 11 Singaporeans out of every 100 are admitted into a hospital. And from the look of things, that number looks to double in less than 18 years.

Source: http://www.lia.org.sg/files/news/2016/10/ManagingSingaporeHealthInsuranceCost_HITF_20161013.pdf

This means over the next 10 years, you have an excellent chance to be admitted at least once. By 2035, you might be admitted twice every decade.

Sobering, to say the least. But look on the bright side, a trip to the hospital generally serves to prevent your health from deteriorating. Unfortunately, that comes at a cost. Literally.

Hospital bills are not cheap

It’s no secret that healthcare costs are rapidly rising. Over a ten year period starting from 2005, the consumer price index for health care in Singapore increased by 30.6% (source: LIA)

We can attribute it to a number of reasons, such as cutting edge technology and an aging population. But the contributing reasons are relatively unimportant compared to the consequence: Each hospital bill has the potential to be huge, even monstrous.

Here is what an average in-patient bill size looks like (in 2014, source: LIA) :

Private Hospitals – $12,105
Government Hospitals (A1 Ward) – $5,955

Add to that any pre and post hospitalization bills, the outpatient treatments that may be required, and you have one potential financial catastrophe.

My own recent hospitalization experience cost over $5,300 – and that was for a relatively uncomplicated procedure and a two day stay.

Bills of hundreds of thousands of dollars are not uncommon, even for stays at the lower level wards.

Most of us gripe when SMRT “revise” their ticket fares by a few cents. You can only imagine what is going to hit the fan when faced with a 5 or 6 figure bill.

An Integrated Shield Plan can shield you from ALL hospitalization related bills

An Integrated Shield Plan works in tandem with the government’s own shield plan called Medishield Life. To get a complete picture of Shield Plans, read this.

When fully bought, the Integrated Shield Plan and its associated riders pay for hospitalization related bills from the first dollar onwards, meaning you can focus on treatment and recovery. Instead of worrying about how to pay the bills.

Shield Plans are primarily meant to take care of inpatient, outpatient, and pre/post hospitalization related bills.

This means that you get to protect your savings and wealth even when faced with hefty medical costs. You may not want to sell your investments to raise cash, nor be able to claim on your insurance (for example, Critical illness cover). Case in point: Hospitalization due to Pneumonia.

Even if you could claim insurance (Critical Illness or even Personal Accident cover), that money could be put to better use than being whittled away on the hospital bills, right?

There, we’ve said our piece.

It’s time to get smart. Real smart.

Here’s a 30-second summary of what we’ve been talking about.

Medical breakthroughs occur on a daily basis, meaning we have access to better health care and a better shot a living longer, better lives.

But this means ever increasing hospitalization bills, and 6 figure totals are getting more commonplace.

An Integrated Shield Plan (with riders) can cover these bills and prevent your financial ship from ever running aground. Not to mention you can get the best healthcare that Singapore has to offer.

So then, as a smart person, what would you do?

If you haven’t done so already, check out the Integrated Shield Plans offered by AXA. Providing one of the highest Annual coverage limits, it could well be the smartest action you take.

www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.

This post is brought to you by AXA. All views and opinions presented in the article are those of www.ClearlySurely.com