Medical inflation loosely defined as cost of healthcare products is on the rise. Accordingly to a report by Aon Hewit1, the key highlights show that the average medical trend rate for 2016 is at 9.1%. What is more astonishing is that Singapore’s gross medical inflation is at 15%! Thus, the only way to hedge against it is to get yourself protected and do it as early as possible.
Insurance products are structured to provide protection at a cost. This protection also provides us the assurance that medical costs are covered for as long as we keep ourselves insured. Hence, we do not add on to the financial stress and mental burden of our family members and focus on getting ourselves treated.
Singapore’s core inflation rate (excluding costs of accommodation and private road transport) is at 1.1%2. This huge disparity between medical costs and core inflation is an indication that we need to select the right insurance product to protect ourselves from the rising costs.
So what should I get?
Fortunately, there are medical insurance products which are able to cover either part or the entire medical bill. For all Singaporeans and Singapore Permanent Residents, Medishield Life covers our basic healthcare costs if we are hospitalised in a public hospital. On top of that, consumers can opt to buy an Integrated Shield Plan (IP) offered by the private insurers and standalone Critical Illness plan (CI) which provides protection against major illnesses.
Though the premiums for these products will increase steadily as we age, this will be a small price to pay because we are transferring the financial risk to the insurers. We do not want to face a situation whereby our hard earned savings are eroded away by the high medical costs because we did not get ourselves protected with a medical insurance product. As previously mentioned in the earlier paragraph, the rising medical costs could pose as a financial risk to us and our family members if unforeseen circumstances do happen.
Here at Insurance@FSM, we strongly encourage you to review your insurance plans to make sure that you are adequately covered.
For any further enquiries, drop us an email at advisory@fundsupermart.com and our dedicated team of advisers will be happy to assist you.
Protect yourself and your loved ones now at Insurance@FSM!
1Source: Aon Hewit 2016 Global Medical Trend Rates
2Source: Consumer Price Develioments in June 2016
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