Recently, I was having lunch with my friends when one of them started talking about upgrading their shield plan.
Her company was considering paying for their employees’ shield plans instead of continuing the existing corporate hospitalisation plan.
She was worried about not having a full coverage as she had some pre-existing health conditions.
That was when it was suggested to her to consider taking up Aviva MyShield due to this thing called Moratorium Underwriting.
If you choose Moratorium Underwriting for your application, you are not required to declare your pre-existing conditions (if any).
Instead, if the pre-existing conditions do not surface within the waiting period (Moratorium), they will be covered after the moratorium period of 5 years has passed.
For those unaware, pre-existing conditions are usually excluded from the coverage of a private shield insurance upon application.
When you apply for a shield plan from an insurer, they will do a full medical underwriting by having you answer a health declaration questionnaire.
You have to answer it in good faith or risk having your claim payouts slashed due to your misrepresentation.
Aviva is probably the only Singaporean insurer that lets you have the option of Moratorium Underwriting; the rest of the insurers require full medical underwriting.
When we investigated further on the Moratorium period, we noted that during the waiting period, it is required that you do not
a) experience any symptoms or
b) seek advice, request for tests or check-ups from a doctor, specialist or alternative medicine provider or
c) require any treatment or medication,
In addition, you may note that there are pre-existing conditions that you can never get coverage for, regardless of the moratorium.
They are namely:
1) heart attack, heart bypass, angioplasty
2) chronic obstructive lung disease, chronic cor pulmonale, pulmonary hypertension
4) liver cirrhosis
7) AIDS or HIV infection
8) thalassaemia intermediate/major
9) diabetes with complications such as protein in urine or eye problem
10) kidney failure
11) organ transplant
12) systemic lupus erythematosus (SLE)
13) muscular dystrophy
14) multiple sclerosis
15) Alzheimer’s disease
17) any form of cancer (other than skin cancer)
My opinion on Moratorium Underwriting?
At first glance, the possibility of insuring a pre-existing condition is very seductive, especially for those who have them.
However, the waiting period of 5 years is simply too long and the requirements are too stringent.
While Aviva states that you should not delay treatment or medical advice in hope to get cover, we can imagine a situation where the insured, when close to the end of the moratorium period, may simply do just that.
To us, a hospitalisation plan is something you should never take a chance on.
Everyone knows instinctively that the most important thing in life is actually life itself.
Never expose yourself to the risk of not having enough money to save your life.
Due to the fact that you are not allowed to have two private shield plans, you are essentially taking on a great risk when you choose Moratorium Underwriting as you could be left without any coverage.
There must be some scenarios in which this may work.
If you have a company hospitalisation plan and are certain that they will not change it for 5 years or more (maybe you are the CEO or HR director), you may potentially take advantage of this.
You will have full coverage for 5 years on your corporate hospitalisation plan while taking a risk on moratorium underwriting.
If your pre-existing condition does not surface within 5 years, you will be able to have them covered. Otherwise, it will be back to square one anyway. No Loss.
However, I must comment that most people do not have the privilege of guaranteeing whether they have corporate insurance for the entire period.
With the CPF Medishield Life, I am supposed to be covered, regardless of my health condition. Isn’t it so?
Yes, you are right.
However, that is only for the Medishield Life portion.
A private shield plan consists of two components – Medishield Life + additional private shield coverage.
That is why the insurers have to pay part of your premium to CPF for Medishield portion.
Thus, even if Aviva MyShield plan excludes your pre-existing condition, your Medishield Life will still cover it.
Aviva MyShield isn’t all that bad.
First, you can choose full medical underwriting instead of Moratorium Underwriting for the MyShield policy.
Next, we would like to highlight that MyShield has a unique benefit where if both parents are insured under MyShield plan 1 or 2, newborns (up to 6 months old) receive free cover of up to $50,000.
Thus, parents may wish to consider having Aviva MyShield together for the sake of free coverage for babies.
We do not think Moratorium Underwriting is the future if conditions remain as they are.
After all, insurance should give one a peace of mind, not make one fret about it for 5 long years.
Another thing to learn from this is that you should always get a hospitalisation plan when you are young.
You are likely to have no pre-existing conditions and hence, have less to worry about.
Do you think we might have missed out any other potential situation wherein Moratorium Underwriting will be useful? Share them with us in the comments below!
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