Of course you are not a dummy, we know that.
But you DO have a million and one questions about this Integrated Shield Plan…thing.
Why does the CPF board and Insurers abbreviate it as IP instead of ISP?
Just how many components are there to IPs? Is it 2 or is it 3?
Can I pay for this fully by Medisave?
What is all this rubbish about the Lite and the Premier and the Saver and B and the C? Why can’t insurers name their products properly, without all the hyperbole and rigamarole?
You just want someone, somewhere, somehow to explain the details – in a manner that is easy to understand. So easy that even a dummy can take it all in and not feel overwhelmed.
Give me a minute while I don my superhero cape – and let’s begin.
What exactly are Shield Plans?
A Shield Plan is a type of Insurance plan that is designed to cover your hospitalization bills, in the event you need to seek non-cosmetic medical treatment. The kind that is deemed necessary by a doctor or specialist.
The main role of a shield plan is to minimize your hospitalization and treatment bills, on a reimbursement or as charged basis. (The plan reimburses you for your bills, or pays out as much as you are charged for your bills). This is different from regular Life Insurance plans that pay a fixed amount of money upon a claim.
Shield Plans are also synonymous with Hospitalization Plans, and we use these 2 terms interchangeably. Ignore any purists who insist that they are different – no sense trying to split hairs about terminology. (Very specialized hospitalization plans do exist, but for the most part, we never have any truck with them.)
Then what is an Integrated Shield Plan (IP)?
Medical bills can have a profound impact on a person’s financial resources. The good people at the CPF board know this, and they administer a nationwide Shield Plan for every Singaporean and PR. It is known as Medishield Life and you can read about it here.
The Integration bit refers to privately administered Shield plans that give additional coverage and choices not found in Medishield Life (MSL). They work in tandem with MSL without any overlap in coverage.
Why then are Integrated Shield Plans abbreviated to IPs and not ISPs? Speculation abounds, but perhaps Singtel reserved the acronym ISP. It would be a tragedy if we mistook our broadband provider for our hospitalization insurance. *End of Sarcasm*
But seriously, we have no idea. Just chalk it up to a silly decision from the powers that be.
How does an Integrated Shield Plan work?
The CPF board explains that there are 2 components to every IP. The first is Medishield Life, and compulsory for everyone. The second is the potential upgrade with any one of the six participating insurers (We list them later).
We, having no particular affection for government explanations, contend that there are actually 3 components to every IP. Yes, you heard it here first folks, we are correcting the government.
What are the 3 parts and what do they do?
Simply put, for every part of the IP that you have, you generally get more cover and more perks, the highest being you are fully covered for all your hospitalization bills.
What are my choices for the upgrades?
Literally the money question. For the base plan offered by each Private Insurer, you first need to choose what type of hospital and ward would you like to receive treatment in.
Here are the main choices:
(Private hospitals are the swankiest option, so expect to pay the most if you choose this option)
Government Hospital – Ward Type A
(The next best thing to a private hospital is an A Ward in a Government hospital, aka Restructured hospital. But we are old fashioned, and stick to the old definition. A Wards are single bed wards, so you can, err,
rest recuperate in peace.)
Government Hospital – Ward Type B1
(B1 Wards consists of 4 beds)
Government Hospital – Ward Type B2
(B2 Wards consist of 5-6 beds)
It goes without saying that you can choose to receive treatment in a hospital and ward of a lower grade than your IP plan, and in fact, the insurer often rewards you for doing so. But the opposite is true as well, only that you suffer a corresponding dip in cover.
After you made your choice regarding the base plan, you face another decision. Do you want to get fully covered by opting for the Top Up plan(s) offered by the Insurer?
The main perk of the Top Up plan(s): You don’t have to worry about deductibles and co-insurance. Deductible refers to a set amount of money you need to pay before claiming for insurance. Co-insurance refers to your share of the hospital bill you need to pay, and both of these are not covered by the base plan. There are other perks associated with the Top Ups, but they are too numerous to list.
The main drawback of the Top Up plan(s): You have to pay extra premiums, lor. No free insurance in this world.
What are my payment options for each part of the Integrated Shield Plan?
Medishield Life – Via Medisave (It is administered by the CPF board after all.)
Base Plan – Via Medisave (It is Medisave-approved, but yearly withdrawal limits apply. Any shortfall has to be paid by cash. This usually happens towards the later years, where yearly premiums are more costly)
Top Up Plan(s) – Via Cash Only.
How do I reduce my premiums?
For those of us who want improved medical coverage but are also looking for ways to keep premiums down, here are 3 ways:
Opt for a lower grade base plan
As mentioned earlier, private hospital coverage gives you the most flexibility but it also comes at an increased cost.
Opt for a cheaper variant of the Top Up Plan
Some insurers have already have cost efficient alternatives to each Top Up Plan they offer. In essence, the cheaper variants provide reduced coverage but that is also reflected in the premiums. Among those insurers are AIA, Great Eastern, and Prudential. You may even think about opting out of the Top Up plan portion altogether.
Select the Top Up Plans that you really want
Some Insurers have broken up the Top Plan portion into several separate plans, for the consumer to choose. Each plan is designed to provide a specific benefit – so if you choose fewer benefits, you also pay less overall. Both AXA and NTUC Income have such piecemeal choices available.
Can you provide a summary of the options offered by the Insurers?
Why, of course. Here are the 6 Insurers offering IPs and their corresponding plan names, in alphabetical order.
- Insurers are terrible at naming their products. For want of a little creativity and imagination!
- NTUC Income is the only company offering specific coverage for Gov Ward B2 and below. Not only that, they also provide the full suite of Top Up plans for it as well.
- The Top Up Plan(s) available for purchase will have to correspond to the Base plan purchased.
With so many options available, what is the best for me?
Hand on heart, we feel the best course of action is to consider the best Base Plan and corresponding Top Up Plan(s) available, even though that will cost the most.
In case of any medical emergency, you do not always have a choice of the hospital or ward that treats you. Imagine having to be rushed to Mount Elizabeth for a heart attack, only to wake up and suffer a second cardiac arrest – after you see the bill.
Speak with your financial adviser who will be able to provide you a fuller recommendation after taking into account your financial goals, situation, budget, and available cash flow.
To address any potential Critical Illness protection shortfall on your own, check out FWD Insurance. They have a fully online and hassle free purchase experience.
We have deliberately steered clear of any price comparisons between the insurers. Far more important than price is the concept of these IPs and the value that they bring to the table.
You might find that some plans cost more than others, but certain portions of their coverage are also commensurate with their price tag. When it comes to Shield plans, having coverage from one today is infinitely better than having the perfect one tomorrow.
We hope that this article has provided enough insight to help you understand what IPs are all about, and more importantly – to take positive action and acquire yours today!
Do you have any questions or comments about Integrated Shield Plans? Share them with us in the comments below.
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.