Transcription
Would it be wise to depend and rely only on corporate insurance for long term? I think it is really important right to look further down the line where uh there will be one day when you know you will stop work. It could be retirement uh it could be other reasons and then you will need to seriously consider what is the most important thing that you need to protect at that point of time and make an early assessment.
[Music] This is Money Talks Explains where we get a burning question and we find an expert to break it all down for us. I'm Andrea Hang. Welcome.
The world of insurance, it's big and confusing with lots of options. Today, we want to get a better understanding of corporate insurance protection that's provided by your employer. What does it cover? When do you use it? Do you still need personal insurance if your company is already protecting you? Let's get these explained by Peggy Chan, a trainer from the Institute for Financial Literacy. Hi, Peggy. Thanks for having me here.
So, the question on everyone's minds, Peggy, is our company insurance good enough? What exactly does it cover? With company insurance, it may be a simple one. It could be comprehensive. it can come with a suite of uh insurance. So right at the top of our minds most important is hospital and surgical because these are where you may have those very big bills. And then of course uh you may have others uh which include um outpatient specialist or maybe accident. Then there are those that also include uh life insurance, right? Yeah. Life insurance and critical illness. So really depends on you know how large a suite the group insurance comes with. Ah so it really depends on what the company signs up for at the end of the day.
Okay. Are there limitations perhaps to group corporate insurance or group employee insurance compared to what we get on an individual level in the retail market for example? The first thing that you will definitely see is that your group insurance is ultimately term insurance meaning that it covers for a period of time. Okay. It's logical, right? Because you know that's during employment. However, compared with your personal insurance, you can buy plans which are lifelong and then uh you will also find that your group plans can also be um a lot cheaper. If for instance you are allowed to buy voluntarily, right, to expand uh on your own uh personal uh insurance, you'll find that it's generally cheaper than uh personal insurance. Cheaper does not necessarily always mean not so much coverage, right? So that's where you will have to do your due diligence and uh do some sort of broad understanding, right, of where your personal insuranceances, how much gap that you want to cover with these kind of group insurance that you can buy voluntarily. Yeah. So these are things that you can do. Okay. Lots of homework for sure.
So if I have my own personal insurance, does it complement my corporate insurance or will we likely see a lot of overlaps? This is where uh we do have to explain why the overlap happens and the necessity for this overlap. Uh because there are periods in our employment lives where we may stop work. Maybe there are caregivers out there, you know, for a period of time and then you rejoin the industry again. So, uh you know there are gaps which means that during these gaps uh we will still need to be covered and yes we have to pay the price you know for this this protection.
Where exactly does the overlap happen usually? So it's when you are under employment right you have your own personal insurance uh let's say hospital or medical insurance right and then uh then you also have the corporate health insurance so this is where the overlap happens but you don't pay right for your corporate so would it be fair to say that I am doubly covered in those areas that are overlapping okay so there is such a thing as coordination of benefits so you can't claim for more than the size of the bill Right. So, I can claim a portion of the bill from my corporate insurance and the remainder from my personal insurance and then if that's not enough, I top up with cash. Exactly. Got it.
On that note, then is it just enough for us to only rely on company insurance for our long-term needs? And this is assuming, of course, we are going to be employed by the same employer. We found ourselves an iron rice bowl. M would it be wise to depend and rely only on corporate insurance for long term? I'm glad you singled out this group because they have been with uh their company for a very long time and the insurance is good but I think it is really important right to uh you know look further down the line where uh there will be one day when you know you will stop work. It could be retirement. Uh it could be other reasons. And then you will need to seriously consider what is the most important thing that you need to protect at that point of time and make an early assessment not just when you know to I was just about to get to that because it with insurance the advice is always start early. Yeah. So if you want to make this assessment you better do it early in your career. Yes. Okay.
What about riders? Can we purchase our rider for our corporate insurance or is that reserved only for personal individual insurance that we get from the retail market? So, it really depends on the group plan. Some of them do offer riders which you pay for and you get a higher coverage. But then it's a choice. When you're younger, the riders are always, you know, lower in cost. uh and as you get older you tend to sink under right the rising cost of that rider. Um but at the same time it's always about affordability. Yes. Our common advice is always look beyond your age bending. Have some foresight. Uh look down you know uh the years and you know genuinely see how uh it you know goes up. It is uh not straight line it's exponential. So keep an eye on that curve. Then you will be able to tell hm you know, if it comes to riders you can um always downgrade.
I was about to ask can we switch if we decide okay the rider that the company is offering on our group insurance is getting a bit too pricey could we perhaps switch and like you said downgrade. Yeah yes of course it is always easier to downgrade than to decide to upgrade.
Should we consider reviewing our personal insurance plans in a bit to pay lower premiums while we are covered by our employee uh insurance? Should I shop around for something that's a bit more affordable on the personal side? I think that's a good question and it's also um uh I think very prudent. The reason is because for those who are work entrance right you will suddenly be overwhelmed by you know the amount of coverage that you need and your savings and your budget is not very high adulting stuff. Yes adulting stuff you might get a little bit um worried right whether you are sufficiently covered and why don't I just rely more on you know corporate insurance since you are provided uh with it. So um do have a good look at your budget. Buy within your means. We always have this rule of thumb which says you know uh do not spend more than 15% of your income on uh insurance. Of course this is a very broad rule of thumb. Sure. But it helps you to you know know that there is a proportion right and so uh with that you may rely on the corporate insurance but you will need to keep an eye out right because this is your aim. you want to be covered you know up to a certain point. So as you know you improve in your savings as you improve on that um proportion that you can pay for insurance do improve that coverage. Okay.
In the event that we need to claim our insurance and expense rather do we use our corporate insurance first and how should we maximize it because this is something that I have seen anecdotally a lot of people do. Yes. As a rule of thumb. Yes. Okay. Okay. But you know surprisingly because uh I have heard anecdotally as well uh from those who have been with a company for a very long time they may not have used it at all but on the contrary because they have been paying for their own uh personal insurance that is always you know right at the top of their head. So if at the point of an emergency at the point of a treatment uh they go to the hospital I think the first thing that crops up in their mind is my own personal insurance. Yes, of course. Forgetting the fact that there is a corporate insurance. I wonder if it's because they have this assumption maybe that corporate insurance uh doesn't cover all that much. He can't we can't possibly claim all that much. Does that maybe that's that mindset? It could be. So really it depends on uh you know the grade of work that you're doing in the company and you know what they offer because there are different categories. Some of them may think that okay I I don't think I'm getting a lot of coverage and why don't I just save myself the trouble and just claim from my own uh personal insurance first. There are of course uh pluses and minuses because if you have a lower grade uh or lower coverage from your corporate insurance then of course if you go for hospitalization the letter of guarantee with your own personal insurance may actually allow you to um be admitted without any deposit. Okay. As compared to corporate insurance and honestly how many people you know before I go to the hospital go and find out uh do I need to pay a deposit or not exactly at the point in time in an emergency that's going to be the last thing on your mind yes exactly so uh so these are the things that you know will catch uh the patients by surprise after the fact right and there are also situations whereby because there is a sort of restriction right to the kind of what right for your own corporate insurance and for your own insurance. So uh if let's say I touch wood when they got to the hospital they were unconscious you know the family has to decide right you know which w and you know what kind of care and so of course sometimes you know the family out of you know genuine you know concern they just want to give them comfort put them up you know as the you know the higher range only to realize that uh oh they are not covered at that level. So certain things, you know, it's good to sort of broadly categorize. Let the family know just in case so that they know where to place you. So maximize corporate insurance first. At least check, make the effort to check. Yes. Uh if you can tap on corporate insurance first before tapping on personal insurance, can we actually negotiate uh the kind of coverage that we get from our employer? I'm just suddenly curious about this. I guess it depends so much which level what rank you're working at. Yeah. But typically I think as employees, you know, we just accept and sometimes we don't know what we don't know, right? Yes. Exactly. So, have you ever heard of employees negotiating their corporate insurance? Well, I I know of experts who do that. So, it is possible. it is because some of them uh may need or may be anticipating relocation or uh some of them are you know interested in raising a family so they they just want to make sure that there is sufficient maternity benefits and such it I think it's it's because they are very aware right of what they can cover and what they can benefit from but nevertheless I think you know not many of us will actually dwell into our corporate insurance yeah we just okay thanks I'll take it home.
Can we dictate how much to claim from company insurance versus personal insurance. For example, I'm at the hospital. I'm paying up my bill. I say, "Hey, I want 50% to be covered by my corporate insurance if it's possible and the I'll pay up the other 50 with my personal insurance." I mean, can we negotiate that at the at the cashier? Usually no. Usually no. You decide which one you want to claim from first. So, they will um optimize the claims from the first insurance, right, that you prefer. And then if there is any balance that is when you claim from your other insurance. So it's pretty straightforward then. It's it's supposed to be pretty and a lot of the medical facilities here are quite well aware of these practices are they not? Yes. It really depends on the uh insurance itself whether they have they can uh directly work these sums out with the hospital. If not so there are two ways to claim right. So one is that you just tell the hospital um I have this corporate insurance and so they work it out between uh these two parties otherwise uh then you will have to pay first right then go back to your office submit a claim do a reimbursement yeah and do a reimbursement okay yeah so whichever that you find is more convenient for your own pocket.
Okay so what should we as employees take note of when our company switches insurance providers okay usually All right. Usually when they switch insurance and because in Singapore we have a very lively you know there's a lot of competition in the market typically uh you are able to retain right uh whatever uh that you had with a plus oh with improvements right um but I think one of the uh first things you really want to take note of is is my insurance if it was portable at first does it still remain portable and by portable you mean oh so portable simply means that if should I leave my company, can I bring it along with me as my own personal insurance? Okay. Yeah. So, you continue to pay yourself. So, the company doesn't pay anymore, but I continue to pay and I continue to keep my insurance. Uh the other uh to track is that because some of the insurance that's offered comes could come without underwriting. Okay. What does that mean? Okay, without underwriting simply means that they will not, you know, make you go through a medical to see whether you have any pre-existing and then that's when they start to tell you um whether they are going to cover you or whether there is they're going to KIV keep in view or they are going to just load you know that means I mean the company has to pay more right okay so so these are things you know that happens um so you want to see if uh you continue to keep the portion where you're covered that uh has no underwriting. This is really important and especially useful because I found that there are some people who share with me, look, I had treatment, I had surgery, and now when I go out there and I buy insurance, they just won't offer. It's really hard to find. This is where corporate insurance can come in very handy. Uh so some of them do offer up to a certain amount, right, that they will cover. Um say take for instance life insurance. So they may say that look as an employee you are you know you can take up insurance and the first 100 200,000 no underwriting. Okay. Yeah. So you just buy that and that's peace of mind. Exactly. That is peace of mind. Um so you know it's good to track right to see if the insurer who is uh taking over whether they also offer you know the same level. Okay. Yeah. So, so if I if I have a pre-existing condition and my employer changes insurance provider, yes, if there's no underwriting, I can assume that I will be covered. It just depends on the amount. Yes. Okay, that's reassuring. That's reassuring. Most of the time, is this common that when companies change insurance provider that there's no underwriting or it really depends? So, it really depends. Yeah. Um because I'm sure when they're negotiating there is usually some upsides right to moving to uh the next plan. So but it's always I think useful because you're trying to protect your own interest just to double check if the amount right that is covered but the underwriting still remains. If not do you just want to be prepared? Yeah I think it's good to know and you talked about the portability aspect earlier. I know of people who have left a company and they were able to carry on that same insurance coverage. Should portability be offered to employees to more employees moving down the road? So, um in terms of portability, uh this is very much desired, right? Um again, it comes with a cost because there is a certain amount of administration involved. So, of course, you know, it would it will cost more in terms of group insurance. Uh however uh if there is that option of portability uh it is important again to review. Do you still need that? Yeah. So typically as we get older what do you think you will need more of life insurance or health insurance? Probably health insurance. Yes. Right. So uh cuz I need my bills taken care of. Yes. Exactly. And as we you know reook at that need um you know we will want to make sure that we are sufficiently covered by our own personal one and if we still need that additional amount of cover from that portable group insurance why not okay if you can afford it. Yeah and then if you reveal that you know you don't need that life you know insurance portion then you know you can forgo it.
So anyone or everyone listening to you explain this world of corporate insurance versus personal insurance, they are going to start reviewing their existing plans or it could be someone starting a new job and thinking about okay what kind of insurance coverage am I going to get from my employer. So recap for us what are the top three things we as employees need to look out for in our corporate insurance plans. Okay. So, um right at the top, I would say look out for portability. Okay. Second, all right, look out for uh coverage that does not need underwriting. Okay. And the next one, if you know you're going to start a family or you know you need to look after your dependence, then check to see if you know there is insurance that's offered you know that covers your dependent or children. That's important as well. And would dependent also include parents? usually not. So it's typically um you know spouse children uh and uh to see if you know um you know how much you know you could get that additional leverage right uh because um for young families you know children you know they tend to get sick very often so it it's it's just nice it's just nice to have the benefit nice bonus there.
All right that's corporate insurance explained and the top three things you need to look out for. Thank you for being our money talks explainer, Peggy. Love to be here.
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