Finance Smiths

Personal finance apprentices-in-training

My health insurance policy lapse

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I’m annoyed with myself as I write this. I have previously mentioned on my blog that insurance is not my strong suit. It’s probably the weakest part of our personal finances. Reason being I don’t review our policies and plans often enough because they don’t get used often.

Other than the monthly or yearly insurance premiums to be paid, I don’t usually take a closer look at the coverage or even review it until something happens. Which is a stupid way to approach insurance. Because the likely outcome is that I probably won’t have the necessary coverage until I need it.

Happened early last month when we found out the baby will be delivered prematurely with possible health complications that might require a stay in the NICU. And we didn’t buy maternity insurance during the pregnancy. I only found out after getting back to work that I actually have corporate maternity insurance.

This time round, the mistake I made was with my own health insurance. Many years ago, I did a review of my insurance policies and upgraded my health insurance to a NTUC Enhanced IncomeShield – Preferred integrated shield plan. The entire insurance premium is usually paid yearly from my CPF – Medisave Account without any cash outlay.

Because the whole process is automatic, I don’t bother to review my integrated shield plan in detail. However, the important thing I didn’t pay attention to is that my insurance premium rises as I get older. Especially with the increase in MediShield Life premiums. At some point, I should have been expecting a cash outlay.

Apparently, that’s this year and I was not aware of it. As a result, my health insurance lapsed in Oct 2019 and I had no idea. I had changed my residential address and didn’t update NTUC Income so I didn’t receive the notification letters mailed to me. I plan to call NTUC Income to find out why they did not call, message or email me about it. Maybe they did and I just ignored all those notifications.

This is so dumb on my part. Can you imagine if I had an existing medical condition and lose my insurance coverage because of this error? Maybe I might have been more careful in the first place but there’s no excuse for letting this happen. While I still have corporate medical insurance in place, it’s a function of my job and is easily lost.

I would like to think having a baby changed my life so much that I lost track of my personal finances. But it’s not. I had time for this and just didn’t notice it. In fact, the only reason why I picked this up is from my updating of the NTUC Income online login details (NRIC to email address). I was like, why is my health insurance policy status showing up as Inactive?

The next thing I’m doing after sorting this out is to look at my wife’s health insurance status and make sure her policy status is still Active. After that, I’m going to look at buying medical insurance for the baby. It’s so easy to get overwhelmed by life that you lose track of what you are doing, what you should be doing and what you have to do.

Getting to Day 15 and CPF Medisave deduction

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I just finished my first full week of work since going back to the office last Fri after taking almost 2 weeks of annual leave to spend time with my wife and the baby. I noticed myself making more of an effort now to get off work on time by 6.30pm to take the train and bus home. I usually reach home by 7.15pm, which gives me a few hours every night to be with my family.

I still try to carve out time to exercise and keep myself active but I now have to squeeze out pockets of time to do this. While in the midst of helping out with my wife and the baby. Most noticeably, I was setting up the stroller, adapters and car seat with my wife. It was a true test of patience as we tried to follow online video instructions to set something up that was apparently not supposed to be so difficult.

We also had to assemble new household items that we bought online during the 11.11 Singles Day Sales. As we try to transform our 2-bedroom apartment into a more baby and family friendly home. All of these pre, actual and post delivery expenses are causing our monthly spending to spike. However, we have also been receiving contributions from the Government, family and friends.

So our cashflow these few months is going to be all over the place. Which is expected given the major life event we just went through. We are going to give it some time to stabilise before we start to look for a pattern of spending to work on and reduce.

Anyway, the good news is that we got to Day 15 since our baby’s birth without him having to make a trip back to the hospital. Given that he is a slightly premature baby (born at the 36th week of pregnancy), there is always a concern that he is at a higher risk of developing medical problems.

While the baby is covered under MediShield Life from birth, it’s only a basic health insurance. On a separate note, he has not received his Medisave grant of $4,000 from the Government yet. It would be useful to help defray the healthcare costs of the baby.

We don’t think private medical insurance would cover the baby from Day 0 to Day 14. Although this gap might have been addressed by my corporate maternity insurance. It’s still better not to risk it. Now that we have gone past Day 15, we have added the baby as a dependent to our corporate medical insurance so that he gets coverage.

The next step would be to purchase an integrated shield plan for the baby. Either the AIA HealthShield Gold Max that my wife has or the NTUC Enhanced IncomeShield – Preferred that I have. Have to check whether one has better coverage relative to the insurance premium for the baby or it’s about the same.

Lastly, the MediSave Maternity Package drawdown of $5,750 has been deducted from my wife’s CPF MediSave account. It has helped to reduce our cash outlay on the delivery expenses. We are happy to find utilising our CPF MediSave account for medical expenses proving to be just as useful as utilising our CPF Ordinary Account for housing expenses.

Insurance planning for our baby

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My father-in-law gave us a lift to Orchard this morning for our baby’s first paediatrician appointment since being discharged from the hospital last Fri 8 Nov. He’s okay so far and the next appointment is in 3 week’s time. The cost of this visit was $100 and it got me thinking about the financial coverage we have in place for the baby.

Admittedly, insurance planning is not my strong suit and it’s also not my area of interest. Both my wife and I have similar insurance coverage:

  1. Corporate medical insurance for ourselves that covers the spouse
  2. Personal Integrated Shield Plan
  3. Wholesale Life insurance policy
  4. Dependents’ Protection Scheme

We didn’t get personal maternity insurance when my wife was pregnant. While we could see why it’s necessary, we decided to take a risk and not buy the maternity insurance. Which as you can see from the sequence of events, almost cost us dearly.

When our gynae told us this was going to be a preterm C-section delivery, her next question was – Did you buy maternity insurance? And I remembered thinking to myself now I see why people buy it before answering – No.

Because there was a chance our preterm baby might have to be warded in Neonatal Intensive Care Unit (NICU) for observation and treatment. There was also a higher possibility of pre-existing medical conditions that might cause the baby to be uninsurable. And the additional risk of pregnancy complications.

We are fortunate that the worst case scenario did not materialise and we subsequently found out my wife and the baby could be covered under my corporate maternity insurance. But we can’t depend on luck to help us out like that. We have to get better at insurance planning for our baby’s sake.