Seth’s Blog on Finance

Some FAQs on Insurance

Have been getting some recurring questions as well as repeated search queries reaching this site. I think it will be good if I can answer some of the more frequently asked questions about insurance.

How to calculate charges for investment-linked policies?

The various charges, such as distribution costs and sales charges, should be spelt out on the Benefit Illustration.

For assurance charges relating to the costs of insurance, there are pages dedicated to displaying entire tables of numbers, usually accompanied by an explanation on how to calculate the charges. For example, for a 30-year-old male non-smoker, the table relating to the death benefit will display 0.70 for every $1,000 of sum assured. If the death benefit is $300,000, one multiples 0.70 by 300 to get the assurance charge for the death coverage.

Best see an ethical financial adviser to dissect any ILP.

Is NTUC Income’s integrated Medishield policy difficult to claim on?

I have written about this before. As of the last quarter, NTUC Income still leads in percentage of positive claim payouts and turnaround time.

Do integrated MediShield policies like IncomeShield or MyShield cover chemotherapy and renal dialysis?

Yes.

Which is better, Aviva’s MyShield or NTUC Income’s IncomeShield?

My recommendation differs depending on the person’s situation. Consult a qualified financial adviser.

What happens if I have a medical condition, am I ineligible for insurance?

Depending on the severity and type of insurance policy being applied for, there may be several scenarios. If the insurer’s underwriters do not feel that the condition is severe, there may be no averse underwriting terms. Otherwise, there might be loading (additional premiums imposed) or exclusions (conditions not covered under the policy). In worse cases, the application may be deferred (pending more medical evidence) or even declined. Deferred or declined cases can aversely affects one’s insurability.

There are policies with special underwriting options. It is imperative people with existing medical conditions to consult a qualified financial adviser for the best course of action.