May 4, 2007
CHANGES TO ELDERSHIELD
3rd insurer bids to be provider
Aviva joins Great Eastern, NTUC Income in tender for new five-year term
By Salma Khalik, Health Correspondent
A THIRD player may enter the market to provide severe-disability insurance cover for those aged 40 and up.
Aviva has joined Great Eastern Life and NTUC Income in tendering for one or more openings as providers of ElderShield insurance plans.
The other two insurers have been ElderShield providers since its 2002 debut. Tenders for the new five-year term, which starts on Sept 30, closed last Monday.
The Ministry of Health (MOH) appoints insurers in five-year blocs, although they are required to guarantee payouts to policyholders for the rest of their life. Premiums and payouts remain unchanged during the five years, but insurers must hand out rebates if their payouts are less than projected in that time frame.
Health Minister Khaw Boon Wan said yesterday the premiums proposed by the rival companies look competitive 'at first glance'.
Current ElderShield premiums stand at about $149 a year for men and $190 for women, who join the scheme at age 40. These have turned out a little high for a current payout of $300 a month for up to five years.
Rebates are therefore on their way. The amount will be announced in August.
Unlike in ElderShield's first five years, insurers will be allowed to offer enhanced schemes in the coming five years, besides the basic plan.
From Sept 30, the basic scheme will likely pay out $400 a month for up to six years. Premiums should not rise by more than $10 a month.
Criteria for a payout remain the same. An individual has to be disabled enough to need help with any three of the following: bathing, walking, eating, going to the toilet, dressing or moving from bed to chair.
Any insurer that wants to offer add-on schemes must also offer the basic one. This is to prevent insurers from cherry-picking and offering only the enhanced schemes, where profits are likely to be higher.
It is believed all three companies have submitted plans for enhanced schemes, which may offer higher payouts, payouts over longer terms or at lower levels of disability.
MOH said yesterday the number of insurers picked will depend on the competitiveness of the bids, insurers' experience with long-term care plans and how much they are willing to put into ElderShield.
Mr Khaw added that this tender is breaking new ground, so his ministry will take its time to pick the best deal for Singaporeans.
About 750,000 people are insured under ElderShield. At the end of last year, 2,366 had made successful claims.
To a disabled person, who can’t even manage his/her daily activities, will payouts from five to six years really matter?
If the person is permanently disabled, it is remote that this person will ever recover! Can this person work for a living?
How then is this elderly disabled person going to get funds to support themselves?
I hope this revamp will really benefit the elderly disabled.
Alternative is to have a plan should oneself be on the disabled! What are your options? Contact us on your planned health needs.