All you need to know about Free insurance for National Servicemen. And more!

Posted 3 July, 2016 by Surely
in Technical Smechnical

1 January 1971 is a date that all Singaporean males should remember.
It was the day that the Enlistment Act 1970 was commenced.

Healthy, able-bodied teenage boys would be conscripted into the various uniformed services, so as to discharge their legal obligations to the nation.
In the 24 or 30 months following their enlistment, these boys would be forced to grow up quickly as the huge responsibility of Singapore’s defence and social well-being were placed on their tender shoulders.

This is our very own Singaporean male rite of passage.

For those who have completed or are still in National Service (NS), you may recall having been ushered into the auditorium for an insurance session just days into your enlistment.
Some nicely dressed fellows would proceed to give a talk about how insurance could help you.

You went through the whole session, discussing and ogling at that average-looking mid 30s insurance lady to whom you would usually not even give a glance, were you outside.
At least that was what I did.

 

Every Female looks like Jolie when in camp

Every Female looks like Angelina Jolie when in camp

 

Most of my platoon mates did not sign up for the insurance.
We were young.
We felt invincible.

Basically, we felt like we were Brad Pitt in his war movies.
We forgot that even he had to die in some of these films.

 

Achilles did not survive Troy.

And we felt like Pitt. Maybe because of Jolie.

 

In any case, we were faced with a budget constraint.
With our meagre allowance, insurance had little chance of making it onto our shopping list.

This is how it is.
Regardless of how persuasive the insurance advisors are, you simply cannot expect that most 18-year-old adolescents will make the right decision to get themselves some cover.

 

Everyone’s favourite word – Free

 

Accidents do happen despite the best intentions and the most prudent safety regulations.
That is why we are elated to hear that term and personal accident insurance are provided at no cost, by the government for our Full-Time & operationally ready National Servicemen.

For the uninitiated, this is the overview of the insurance coverage that Mindef and MHA have arranged with Aviva.

 

nsinsurance

For the first $150,000 of Term and Personal Accident coverage under the Core Scheme, they are made free for the National Servicemen throughout the duration of their two years active service.
Reservists are also covered for the same quantum during the In-Camp Training period.

 

The Detailed Coverage Period

The Detailed Coverage Period

 

No payment needed, no underwriting required and no questions asked.

In addition, you may purchase up to 1 million Term and 600k PA cover if you reckon that the free coverage is insufficient.
Your dependents are also eligible to buy into the Group insurance under the voluntary scheme.
This voluntary scheme is available from 1 July 2016 for MHA personnel and 1 October 2016 for MINDEF personnel.

While this free insurance thing may have arrived 50 years too late, it is indeed a progressive step towards appreciating the efforts of those who have served or are going to serve NS.
National Servicemen can give their best during training, knowing that their loved ones are covered in the event of any mishap.

Having said so, we can’t help but wonder if the Core Scheme is sufficient.
Should a Fulltime NSman (NSF) buy additional coverage under the Voluntary Scheme?

 

Is the Core Scheme enough for an NSF?

 

We are not concerned about the regulars in SCDF, SAF or MHA.
Or the operational-ready NSmen for that matter.
This is due to the vastly different age spectrum of these groups.

The profiles of Full-Time NSmen (NSFs) are likely similar.
NSFs are at a young age and unlikely to have dependents.
Thus, this makes the analysis of an NSF’s insurance needs more accurate.

For Personal Accident benefit, one is able to claim a specific percentage of the Sum Assured ($150,000) when Total and Permanent Dismemberments happens to the Insured person.
An English study reported that the additional cost associated with disability is £550 per month.
That works out to be SGD 12,000 per year.

A 100% compensation will give the disabled serviceman a 12.5-year buffer.
Together with various schemes to help the disabled in Singapore, it may be sufficient.

For Term Life benefit, it is difficult to determine the true value of one’s life.
We decided to explore that by asking two questions

1) How valuable is an NSF life to the public?
2) How much money is needed to support the parents of the NSF ?

 

Is a Singaporean son worth only 2x of a foreign worker?

 

In the late Dominique Lee case (more on it later), the compensation quantum was mentioned by the government body.

 

The SAF, citing respect for the family’s privacy, had not revealed the compensation amount, but said compensation quantums are generally “two to four times” that of amounts provided under the Work Injury Compensation Act for incidents arising from training and operations.
Source: Today Online

 

The revised Work Injury Compensation Act (WICA) is offering compensation ranging from $69k – $204k for work-related fatality.
A two and four multiplier would range from $138k to $816k.

Obviously, the Core scheme coverage of $150k is within 2-4 times of WICA compensation.
After further research, we are surprised to discover that the basis of $150k coverage is centred around an 18-year-old earning the starting NSF basic allowance of $560.

The following is derived with the WICA calculator

 

wica

 

There it is !!
An NSF is covered twice the amount of a foreign worker that is earning the same amount.

Maybe this is not an objective view due to our nationality.
A Singapore boy deserves more than just the minimum.

An 18-year-old Singaporean male will definitely be able to earn more than $560 per month outside of NS.
We opine that the Core Scheme of $150k coverage is callously minimal.

 

What is the dependency claim of an NSF if judged in a civil matter?

 

Another angle to view this is the loss of dependency claim in a civil suit.
The parents of the NSF will expect some monetary contribution from the son after they have retired.
This is lost when the child’s life ends prematurely.

The Civil Court presides on some of these unfortunate cases and has some relevant findings on them.
We are looking at this particular case of Fong Khim Ling v Tan Teck Ann.

21-year-old Fong Ching Pau Lloyd was met with a fatal accident.
The parents sued the wrongdoer and had their loss of dependency claim assessed at $236,160.

It is clear that the Core Scheme coverage of $150k is inadequate to make up for the loss of dependency towards the NSF’s parents.

 

NSFs should have higher coverage

 

From the two test questions, the coverage of $150k is either insufficient or just about basic.
Thus, it is still beneficial for NSFs to increase their coverage amount under the Voluntary Scheme.

 

SG soldiers

Conscripted but still proud of serving.

 

We want to reiterate that despite the findings, we are glad that the government is looking after our conscripted ones with complimentary insurance coverage.

Our only peeve is that more can be done.
We guess that this provides a starting point for more at the very least.
Hopefully, the coverage will be reviewed and increased in the following years.

 

Bonus Read: Tribute to Dominique

 

We have written about Dominique previously.
After the recent developments, we are convinced that he is the driving force for this change.

Dom’s case came to the public’s attention in Mar 2016.
The public was enraged by the Court’s rule that the deceased’s family had to pay the legal fees to the SAF and the two officers.
The fees were waived later.

Three months later, this insurance scheme was introduced on 21 Jun 2016.
Just a week later, the Grounds of Decision was released by the High Court to explain its rationale.  From the timeline, we can infer that Dom’s case was definitely the main consideration behind this free insurance cover for the National Servicemen.

 

#superflydom

#superflydom

 

On a related note, it was noted that Dom’s family was suing the SAF for the costs of Mr Lee’s tomb, amounting to $34,300, interests, costs, and such further or other relief as the court deemed fit (extracted from Grounds of Decision).
Is there a need to defend such a small claim?

While Dom’s family did not achieve what they were aiming for, it was their relentless pursuit of an answer that paved a better future for all NSmen.
As a reservist that will benefit from it, I am certainly grateful.

 

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.

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