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The next important aspect in Insurance is ‘Personal Medical Insurance’.


The catch word here is ‘personal’. Today, most of the companies do have a medical cover for the employees working in their company. However the cover provided by the employer is not adequate. Hence, it is very important that each one of us must have a Personal Medical Insurance, which is independent of our employment.

Medical insurance is an insurance which reimburses the expenses incurred in getting admitted to a hospital and the treatment then after, either caused by an accident or sickness.

The other vital point is that the reimbursement is only for if the person is admitted and not for consultation/treatment as an outpatient.

The reasons for the personal medical cover apart from the company medical cover are many.

1. Cover provided by the employer will end when one reaches their retirement age.
2. Employment might get terminated abruptly due to retrenchment, merger and acquisition
3. We might change jobs due to many reasons and the new employer may not provide medical cover.
4. If we wait to take a personal cover after retirement, there is no guarantee that we may be able to purchase such a cover, since there are possibilities of we contracting medical conditions which render us uninsurable.
5. In general, cover provided by the employer has a ceiling , which may be only a small portion of the bill in certain cases.

In Singapore, the Government has also introduced a basic medical insurance for all citizens and PR’s . This is called MediShield Life, an insurance scheme, administered by the CPF Board. This MediShield reimburses portion of the hospital expenses.


However MediShield Life coverage is sized for subsidised treatment in public hospitals. MediShield Life is more beneficial for persons staying in lower class wards like C and B2. This does not mean that this is not useful for those who choose to stay in a Class A/B1 wards or in a private hospital. These people are also covered by MediShield Life. However, only a small portion of the entire bill in a A/B1 ward in a public hospital or private hospital will be reimbursed by the MediShield Life. The remaining portion must be borne by the patients – or if they have a personal medical insurance from a Private Insurance company , then such a policy may reimburse the remaining portion of the bill.
The plans provided by MediShield Life has two components that are not reimbursed. These two components must be borne by the patient himself/herself. ( Or if he /she has an insurance cover from a private insurance company, then such an insurance might pay these two components) .

These two components are (1) Deductible (2) Co-Insurance.
A “deductible” is the minimum claimable amount that the patient must pay when he/she makes a claim from MediShield. This deductible component is withheld from reimbursement, once in a policy year.

After this deductible is withheld, from the remaining portion  of the bill, the co-insurance component is further withheld. This is normally a percentage of the remaining bill after deductible is withheld.

Medishield Life, introduced in 2015, has an unique feature of covering pre existing conditions also, with an increased premium charged for a period of ten years.

MediShield Life has a maximum ceiling of 100,000 as reimbursement per year. Private Insurance companies offer insurance covers which are added as further cover to the basic MediShield provided by the Government.

The main feature of the covers offered by Private Insurance companies are 
1. Reimburses expenditure incurred on as charged basis- with no ceiling on individual items of reimbursement.
2. Certain policies do reimburse the components of Deductible and Co-Insurance also.
3. All pre existing conditions are excluded.
4. Private insurance offers maximum reimbursement possible even 1.5 Million per policy year in certain cases.

Switching between health insurance products

Medical Insurance policies, as a general norm, do not usually cover pre-existing conditions (illness or disability one already has) when you sign up for them. Before you switch from one medical insurance policy to another, it is necessary to consider whether your health condition has changed from the time you bought your current policy, and whether you have any existing medical conditions. If there has been any change in your health condition, the new policy that you switch to may not provide you with the same coverage as your existing policy, or the new policy may require you to pay additional premiums in order to provide you with certain benefits.

It is true that MediShield Life covers pre-existing conditions. So when one switches from one medical policy under a private insurance company to another under a different company, you will only be covered for pre-existing conditions up to MediShield Life benefits. If you have existing medical conditions that are covered by the existing Integrated Shield Plan, you may lose coverage for your existing medical conditions under the new plan.

When deciding what type of health insurance to buy, make sure you are clear about what you need and what you can afford to pay long term. The cost of healthcare differs greatly between private and public hospitals, and also for the different types of wards. There are different insurance policies to cater to different needs and premiums will be higher for policies which offer higher coverage.

If there are budget constraints, and you cannot afford to pay high premiums, then you must be prepared to adjust the level of healthcare service that you want. You must choose a policy with premiums you can afford. If you do not keep up with your premium payments, your plan will lapse and you may not have the coverage that you want.


Medi save is not a health insurance policy. Part of your CPF contributions goes into your Medi save account and this is part of your CPF savings.

You can use your Medisave to pay for

• Bills of hospitalization for your or your immediate family members’ treatment , day surgery and certain outpatient expenses; and
• Premiums for MediShield and Integrated Shield plans for yourself and your immediate family members.
Do note that:
• Medisave is a savings account and is meant to help pay the costs of hospitalisation expenses and expensive outpatient treatments.
• There are withdrawal limits on the use of Medisave.

The Medisave withdrawal limits are stipulated by the Government in order to ensure that the savings of the member is conserved for future medical needs, particularly after retirement and during old age. The Government has kept the limits which generally is adequate to cover most of the charges incurred by the large portion of the population and for treatment while admitted in the Class B2 and C wards.

Girija Varadharajan
Life planner ( Great Eastern Life)

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