Ask someone to name the biggest insurance company in Singapore, and you’ll likely hear familiar names like Great Eastern Life, Prudential, AIA Singapore, or perhaps even Income Insurance (formerly NTUC Income) from the older generation.
Hint: It’s Not Who You Think
But what if we told you that none of those are the correct answers?
In practice, the CPF Board is arguably Singapore’s biggest insurer, even though it’s not a private company, but a statutory board under the Ministry of Manpower.
This starts with MediShield Life, a basic health insurance plan in Singapore that provides lifelong protection against large hospital bills for all Singapore Citizens and Permanent Residents, regardless of age or health condition. Based on Singapore’s population figures as of June 2024, this means 4.18 million people are covered by MediShield Life.
That’s not all. CareShield Life, which was introduced in 2020, is a long-term care insurance scheme that provides basic financial support should an individual be deemed severely disabled. It’s also mandatory for all Singaporeans and PRs born in 1980 or later. Those born before 1980 would typically be covered under ElderShield (which they can opt out of) and may choose to upgrade to CareShield Life. Both schemes are administered by the CPF Board and the Agency for Integrated Care (AIC), on behalf of the Ministry of Health.
Other insurance policies administered by the CPF Board include the Home Protection Scheme, a type of mortgage-reducing insurance, and CPF LIFE, a life annuity scheme.
So, while CPF Board isn’t a traditional insurance company, it plays an outsized role in ensuring that millions of Singaporeans and PRs have essential insurance coverage, from healthcare to home protection to retirement income.
Introducing CPF’s Health Insurance Planner
Before purchasing any health insurance policies, it makes sense to compare the various options available and to look in particular at what you’re paying in premiums versus the coverage you’ll receive.
But here’s the challenge.
Most insurance planning tools are built by private insurers, and understandably, they promote their products. You wouldn’t expect an insurer like Company A to help you compare their plans with Company P’s offerings. As a result, these tools often don’t give a complete or unbiased view of the options available in the market.
This is where the CPF Board can play a vital role.
As the administrator of MediShield Life, CPF plays a key role in Singapore’s national health insurance framework. While MediShield Life provides basic hospital coverage, CPF members can upgrade to a private Integrated Shield Plan (IP) for enhanced coverage, including stays in A or B1 class wards in public or private hospitals.
However, IP premiums have risen significantly in recent years. This makes it all the more important than ever to compare premiums across different insurers and consider whether we can afford the premiums in the long term.
To help Singaporeans make informed decisions, CPF has launched the Health Insurance Planner. By offering an unbiased and comprehensive view, the CPF Health Insurance Planner aims to empower Singaporeans to choose coverage that best fits their needs, both medically and financially.
How The Health Insurance Planner Can Help Us
Instead of a step-by-step walkthrough (which you can and should try for yourself), we will highlight a few key value propositions that stood out to us.
The first is that the Health Insurance Planner provides information based on each person’s individual details. To use it, you need to log in using your SingPass. This allows the Health Insurance Planner to provide useful feedback, taking into consideration your personal details. These include your age, savings you currently have in your MediSave, and your existing private integrated shield plan provider (if any).
For example, the Health Insurance Planner can automatically pre-fill information such as your current MediSave Account balance and the insurer you’re currently with for your Integrated Shield Plan (IP). All you need to do is indicate the specific IP plan you’re on and any riders you may have added to enhance your coverage.
To make the projections more realistic, the tool includes an assumed annual inflation rate of 5% for private medical insurance premiums, which you can adjust based on your expectations or comfort level.
With this level of personalisation, the planner helps project how much you may spend on medical insurance premiums, and whether your MediSave savings will be sufficient to cover it. It also projects how much cash outlay you have to fork out to pay for your insurance premiums.
Since many of our IP premiums are paid through our MediSave account, it’s easy to overlook just how much healthcare insurance can cost over time.
For many of us, as long as our annual MediSave contributions exceed what we spend on premiums, we see our MediSave balance continue to grow, and assume everything’s fine. However, the actual cost becomes more apparent in long-term projections.
Using the Health Insurance Planner, the projection for my healthcare premiums over the next 20 to 30 years, based on my current age, came up to around $190,000. That’s a significant amount.
In addition, I’ll need to cover about $53,000 in out-of-pocket expenses. These are mainly for the rider component of my Integrated Shield Plan, which cannot be paid using MediSave and must be paid in cash.
It’s also worth noting that this projection includes the premiums I’m paying for my three children over the next 20 years, which are deducted from my MediSave. Your projected premiums will likely be lower if you’re not paying for any dependents.
The key takeaway is this: Based on the projection, I’ll have enough MediSave savings to cover these premiums. However, this assumes I continue working and earning at least my current salary. If my income drops in the future, my MediSave contributions, and therefore my projected MediSave savings, would be lower.
The Health Insurance Planner Can Help You Compare Different Private Integrated Shield Plans
Another helpful feature of the Health Insurance Planner is its ability to compare different IP providers comprehensively.
This is especially helpful if you’re:
- Considering switching from your current insurer
- Still deciding whether to purchase an IP for the first time
- Or thinking about giving up your IP coverage altogether
The key details of each IP are presented in a comparison table within the Health Insurance Planner. By laying out differences in premiums, benefits, and long-term costs, the tool allows us to make more informed decisions about our healthcare coverage.
Beyond comparison, the planner also offers other valuable features. For instance, you can visualise how your annual medical insurance premiums will rise with age, and it’s clear that the increase becomes incredibly steep in our 50s, 60s and beyond.
You can also compare your current coverage with other available plans in the market. In the example shown below, my existing plan includes the cost of the rider component, while the other policies shown for comparison do not include rider costs (yet).
For our comparison, we focused on IPs that provide coverage for private hospitals. However, the Health Insurance Planner also allows you to compare IPs that cover up to A Class wards in public hospitals or B1 Class wards, depending on your preferred level of care.
Ultimately, this tool aims to provide greater transparency, not just in comparing plans across different insurers, but also in helping you project the lifetime cost of the health insurance policies you’re considering.
After all, purchasing a private Integrated Shield Plan is a long-term financial commitment. Instead of focusing solely on the annual premiums, we should consider how the total cost adds up over decades and whether it remains affordable in the long run.
Read Also: Complete Guide To Buying A Private Integrated Shield Plan
The post Singapore’s Biggest Insurer, CPF, Just Introduced A Health Insurance Planner: Here’s How It Could Help You Make A Better Financial Healthcare Decision appeared first on DollarsAndSense.sg.
