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Personal Finance
Are you covered?
Does your insurance plan cover hospitalisation expenses related to Sars? What should you look for in a medical plan? GENEVIEVE CUA reports
WORRIED about the expenses, if you fall ill with Sars (severe acute respiratory syndrome)? If you have a hospital and surgical (H&S) plan bought from a life insurer or if you’re covered under a company or group plan, you have one less reason to fret. Contrary to recent press reports, you’re likely to be covered for hospital expenses relating to Sars or other infectious diseases.
But if you are shopping for a plan now, underwriting may get tougher. Aviva, for one, is looking at imposing a period of six months for new contracts where Sars is explicitly excluded. Asia Life says it is in discussions with its reinsurer.
The almost unrelenting onslaught of ill news regarding Sars should yield one silver lining for insurers as more people wake up to the need for health cover – specifically, a good hospital and surgical plan. Says Sebastian Tan, Aviva’s assistant general manager (group life, accident, health): ‘Awareness has gone up for a lot of products, even life and term policies.’
This piece will deal with the importance of H&S plans and some key terms and conditions you should watch out for.
People are almost routinely confused over insurance contracts, which are typically difficult to read. But this can’t be over-emphasised: In any financial product, whether it is insurance or an investment, you must know exactly what you buy. If you can’t understand the terms – which may be couched in legalese or buried under layers of fine print – get help from a licensed adviser.
But first, on Sars. A check with Tan Tock Seng Hospital reveals that hospitalisation charges will be absorbed ‘on a case to case basis’. There is no choice, in any case, on the type of ward. All Sars patients go into Class C wards – at the daily rate of $37. Intensive care, at Class C, costs $80 a day.
How do you know your plan covers you? Look under the section covering policy exclusions. A check with the help of licensed independent adviser Cornerstone Planners shows that most contracts are silent on the issue of communicable or infectious diseases. These include Aviva, Axa, Asia Life and GE. If there is no specific exclusion, you can safely assume it is covered.
One contract – Manulife’s Manucare – has this as an exclusion: ‘Any communicable disease in epidemic proportion as declared by the government.’ A check with Manulife confirmed that Sars will be covered unless the Health Ministry declares it to be an epidemic. Queries to the ministry on what it deems to be an epidemic were unanswered.