Pitfalls of Health Insurance for Expats

Rainer Ackbari, an adviser representing Professional Investment Advisory Services Pte Ltd talks about some of the key points to consider when looking for health insurance.

Relocating from one’s comfort zone to a new country, such as Singapore, opens doors to many new and exciting opportunities but this can be accompanied by apprehension about the challenges that lie ahead. Finding a new health insurance policy for the family and cancelling a tried and tested policy in one’s home country most certainly belongs to the latter. Here are some important points to consider when doing your research:

Portability

Portability is relevant when moving from one country to another.  Check to see whether your insurance provider is able to cover you and your family in the country you will be based in.

Guaranteed Renewability

A health insurance policy is meant to provide cover in times of need. In this regard, it is important to seek out a policy that includes guaranteed renewability. If not, a large claim can lead to the insurance company not granting renewal of the plan when you most need it. This would generally occur following a substantially large claim, eg cancer treatment.

Pre-Existing Conditions

Pre-existing conditions pose one of the most significant challenges when applying for health insurance. Any previous health conditions or ongoing treatments must be diligently listed and explained in the health questionnaire to allow the insurance underwriter to determine your insurability. If you have an existing plan which already covers the pre-existing conditions, you should consider retaining it in some form especially if it is portable. It is also important for one to take up a health insurance plan as early as possible so that illnesses that develop later in life are already covered by our insurance plans. There are various outcomes based on the type and severity of the ailment:

• Policy is accepted as standard
• Policy is accepted with an additional cost (loading)
• Policy is accepted with exclusions for anything related to and including the pre-existing conditions
• Policy is declined

Outpatient Benefits

In an ideal world, we would all like to visit the doctor without being confronted with a bill. Indeed outpatient benefits, where one receives treatment from a clinic or hospital but is not hospitalized, can be included in a health plan; but this comes at a high price. The likelihood of a one claiming under outpatient benefits is high and therefore insurance companies must charge enough to cover these expenses.Some employers have arranged a plan to cover their employees for outpatient treatment.

An alternative to lower the cost of insurance is to only insure the most costly risks, i.e. hospitalization and/or include a co-payment/deductible.

Maternity Benefits

While some insurance policies include maternity benefits, it is important to note if there are any waiting periods. Claims can only be made for treatment after the waiting period which can be as long as 24 months; so you will need to plan ahead.

Dental Cover

Like outpatient benefits, dental cover is nice to have but not essential for the budget minded individual. It is good to compare the expense of the policy against the costs of the treatments you think you will need. If you have strong healthy teeth and don’t anticipate anything more than 1 or 2 visits to the dentist per year, a dental plan may not be necessary. Some employers have arranged a plan to cover their employees for dental treatment.

Maximum Entry Age, Maximum Age of Coverage

Health insurance plans are generally subject to a maximum entry age, e.g. 75 years, so it is important to plan ahead to avoid getting caught out without insurance. Another point to bear in mind is the maximum age of coverage where “lifetime” or “up to age 99” is preferred.

Rainer Ackbari, an adviser representing Professional Investment Advisory Services Pte Ltd

+65 9017 2280

rainer.ackbari@proinvest.com.sg

This article reflects the personal views of the writer and is not intended to be a substitute for personal financial advice.