Why I downgraded my Integrated Shield Plan (IP)

For those of you who don’t know what an Integrated Shield Plan (IP) is, it is an optional health coverage provided by private insurance companies on top of the mandatory Medishield Life.

Essentially IP covers the hospital bill above the amount covered by Medishield Life plan. Usually, you can also get a rider on top of the IP to cover the co-insurance and deductible.

This rider used to be able to cover 100% of your hospital bill but since March 2018, the rider will need to incorporate a minimum of 5% co-payment. See figure below for illustration.
 
 
 
I was with AIA Healthshield Gold Max A for my integrated shield plan and the corresponding AIA Max VitalHealth A value rider. This essentially covers most of my medical bill except for the 5% co-payment for any hospital including private ones.

This does give me a piece of mind knowing that I will not be financially dragged down if I were to, touch wood, suffer from any serious medical conditions.

However, I have recently downgraded from AIA Healthshield Gold Max A to Healthshield Gold Max B and correspondingly VitalHealth B for the rider. Here are the reasons why

First and foremost, the premium for IP and its Rider have increased quite significantly over the years. This is due to an increase in my age and also the rising medical cost. The total premium for me had essentially more than doubled in the last 4 years.

Also when I looked at the premium at 65 now and compound that at 3% inflation rate to when I turn 65, it is an amount which I won't be able to comfortably afford when I retire. 

Hence there is a high chance that I will be downgrading when the premium jump significantly as I age. Ironically that should also be the time where I need better health care.

So instead of paying the higher premium now for when I am less likely to need it, I decided to do the downgrade now.

Secondly, I just underwent a minor surgery last year via Government hospital and I have to say the process was quite smooth. I have to give credit to Singapore's public health care system being generally quite efficient.

Having said that, I am aware of situations where sometimes for certain medical conditions, it is possible that the waiting time can get excessively long affecting timely treatment of the illness.

And this brings me to my last point. I just come to realize that even if I had downgraded from AIA Healthshield Gold Max A to Healthshield Gold Max B, I am still being covered if I were to go to a private hospital, although the coverage is not 100% or As charged.

I took a look at the policy and after the downgrade, there is a pro ration of 70% for most of the coverage if I were to go to a private hospital.

This mean that for cases where there is an urgent need to go private for better and more timely treatment, I can still do so but I will have to fork out 30% of the medical bill on top of the 5% co-payment. I hope that such scenario will be rare and I will be able to come up with the 30% comfortably if necessary.

Considering all the risk and savings carefully, I finally decided to downgrade my IP from AIA Healthshield Gold Max A to Healthshield Gold Max B and correspondingly VitalHealth B for the rider.

I have to add that it is easy to downgrade your IP but it might not be easy to upgrade your IP as you age. For an upgrade, you are likely to be subjected to a health check and potentially get excluded from any health issue you may have as you age. So do consider carefully before you downgrade your IP.

As always, thanks for reading and do support me on my referral page. Stay Safe and Happy Insuring!