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financial future > Insurance Planning > Flashcards

Insurance Planning Flashcards

1
Q

What are the 3 main types of insurance?

A
  1. Life
  2. Health
  3. General (Non-Life)
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2
Q

What are 5 examples of Life Insurance?

A
  1. Term
  2. Whole Life
  3. Endowment
  4. Investment-Linked
  5. Universal Life
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3
Q

What are the 4 main types of Health Insurance?

A
  1. Hospitalisation
  2. Critical Illness
  3. Personal Accident
  4. Long-Term Care
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4
Q

What are the 4 main types of General (Non-Life) Insurance?

A
  1. Property
  2. Business Interruption
  3. Travel (Medical, Trip delay/Cancellation, Baggage Loss)
  4. Motor
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5
Q

What are the 3 roles of Insurance?

A
  1. Income Replacement (For premature death)
  2. Caregiving Expenses
  3. Medical Expenses
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6
Q

What are the different needs for life insurance for each family type?

A

Refer to slides

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7
Q

How long should Death insurance cover?

(Not a number)

A

When we retire or have no more dependants

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8
Q

How long should income replacement (Disability/Critical Illness) cover?

(not a number)

A

When we retire or have no more dependants

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9
Q

What are the 2 components that medical insurance should cover?

A
  1. Loss of income (Until retirement/when we have no more dependants)
  2. Medical, hospitalisation expenses (As long as possible)
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10
Q

How much Death insurance should we have?

(Amount of income)

A

10x of annual income + account for dependants and loans - savings and existing insurance

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11
Q

How much medical insurance should we have?

(2 components)

A
  1. Loss of income (5 years of gross income)
  2. Medical, hospitalisation expenses (Depends on healthcare requirements and expectations) - Ward A/B/C
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12
Q

How much Disability insurance should we have?

A
  1. Loss of income (75% of monthly income)
  2. Caregiving costs (per month)

Family members: $600
Domestic helper: $1,200
Day care: $945 - $1,575
Nursing home: $2,000 - $3,600

Basic coverage can be enhanced through Careshield Life supplements

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13
Q

What are the 4 components of Whole Life Insurance?

A
  1. 80% in participating fund, 20% insurance (depending on insurers)
  2. Coverage for life
  3. More expensive
  4. Has cash value
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14
Q

What is the Home Protection Scheme (HPS)?

A

Protects CPF members and families from losing their HDB flat in the event of:
1. Death
2. Terminal Illness
3. Total Permanent Disability
–> Helps to pay off the outstanding home loan

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15
Q

Who is under the Home Protection Scheme?

A

Mandatory for CPF members who use their CPF to pay HDB monthly instalments

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16
Q

How are the premiums calculated under the Home Protection Scheme?

(4 components)

A

Age, gender, loan, tenure (Deducted through CPF or cash)

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17
Q

What is the Dependants’ Protection Scheme?

A

An OPT-OUT term insurance for CPF members (SC or PR) who are 21 to 65 years old and have made their first CPF contribution.

It provides basic financial protection for you and your family in the event of death, terminal illness, or total permanent disability

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18
Q

How are the premiums paid for the Dependants’ Protection Scheme?

A

Annually by CPF OA (If OA is not enough, it will be paid from SA) OR Cash

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19
Q

Who is administering the Dependants’ Protection Scheme?

A

Great Eastern Life

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20
Q

What is the sum assured under DPS?

A

0-59 years old: $70k (3 years of salary for a lower-income CPF member
60-64 years old: $55k

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21
Q

What is the Annual Premium for DPS?

A

34yrs old and below: $18
35-39yrs old: $30
40-44yrs old: $50
45-49yrs old: $93
50-54yrs old: $188
55yrs old and above: $298

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22
Q

What is an Endowment Plan?

(4 components)

A
  • Specific tenure: 2 to 30 years
  • Cash Value and bonuses
  • Sum assured + accumulated bonuses if insured dies within policy tenure.
  • Maturity value if insured survives the policy tenure
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23
Q

What is an Investment-Linked Insurance Plan?

A

Offers protection and investment

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24
Q

What is Critical Illness Insurance?

A

Pays out a LUMP SUM upon diagnosis (Early or late stage) –> Defrays living expenses especially if you cannot work
- Can be a standalone insurance product
- Can be a rider to term/life insurance

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25
Q

How many CIs and surgical procedures with a standardised definition as prescribed by Life Insurance Association (LIA) do CI plans cover?

A

37

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26
Q

What is the difference between Terminal & Critical Illness?

A
  • Critical Illness: can be cured through intensive medical treatment.
  • Terminal illness: no further treatment can be done to cure it
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27
Q

What is the benefit of Early CI coverage?

(2 reasons)

A
  • Extends to early stages
  • More expensive as it provides coverage beyond the standardised CI definitions
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28
Q

What is the benefit of Multi-pay CI Plans?

(2 reasons)

A
  • When a CI recurs/relapse later in life after the first claim
  • When an individual is struck with a second CI
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29
Q

How much does Disability Income Insurance cover in the first 2 years?

A

Monthly income if unable to perform duties in own occupation

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30
Q

What does Disability Income Insurance cover in the next 2 years?

A
  • Monthly income payable until age 65 if unable to work in a reasonable occupation by virtue of his/her training, education, or experience.
  • Partial income payable if able to return to work but with a pay drop
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31
Q

What does Personal Accident Insurance cover?

(4 components)

A
  1. Hospitalisation
  2. Medical expenses
  3. Replacement costs of personal electronic devices damaged beyond repair
  4. Infectious disease (Dengue, hand food mouth if you choose)
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32
Q

How does Personal Accident Insurance pay the insured?

A

Pays a lump sum in the event of accidental death, or permanent disability due to an accident.

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33
Q

What are some examples of Micro-Insruance?

A
  1. COVID-19
  2. Dengue
  3. Travel
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34
Q

What is Micro-Insurance?

(5 components & 2 examples)

A
  • More affordable
  • Sum insured is lower
  • Small cover
  • Short duration
  • Not enough for those with pre-exisiting medical conditions

Tribe (NTUC Income) & ProtectFirst (Manulife)

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35
Q

What is the difference between Direct Purchase Insurance (DPI) and non DPI?

A
  1. Sold directly by insurers without financial advice or commission
  2. Generally less comprehensive in their coverage

E.g. DPI products cover 30 CI vs non-DPI cover 37 CI

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36
Q

What is CompareFirst?

A

A comparison portal on LIFE INSURANCE products:
1. DPI
2. Term life
3. Whole life
4. Investment-linked insurance plans

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37
Q

How many LIFE INSURANCE products are there in CompareFirst?

A

200 available (10% DPI)

38
Q

What information is on the Cover Page for Insurance documents?

(5 types)

A

Quick overview:
1. Key risks
2. What happens when policy is surrended early
3. Premium Term
4. Policy Term
5. Policy Currency

39
Q

What information is on the Product Summary for Insurance documents?

(3 components)

A
  1. Benefits
  2. Fees
  3. Charges of the insurance plan
40
Q

What information is on the Bundled Product Disclosure?

A

Helps consumers decide if a term plan or bundled life insurance is more suitable for them.
- Gives comparison between the benefits

41
Q

What information is on the Benefit Illustration?

(4 components)

A
  1. Projected investment returns
  2. Guaranteed & Non-guaranteed benefits
  3. Costs
  4. Charges
42
Q

What is the 3 ways to keep up with insurance premium payments?

A
  1. Automatic premium loan
  2. Convert to paid-up policy
  3. Premium Holiday
43
Q

When did Medishield Life replace Medishield?

A

Nov 2015

44
Q

What is Medishield Life?

(3 components)

A
  • Mandatory
  • Universal
  • Lifetime

Basic Healthcare Insurance for SC and SGPR for SUBSIDISED treatments in public hospitals. (Class B2/C wards)

45
Q

What happens if I have pre-existing medical conditions? Does Medishield Life cover them?

A

Yes BUT you will need to pay an additional premium of 30% for 10 years

46
Q

How are the premiums paid for Medishield Life?

A

Medisave

47
Q

What is the increased annual claim limit?

  • Medishield Life (Enhanced 2021) -
A

$100k to $150k

48
Q

What are some examples of Inpatient Treatments?

  • Medishield Life (Enhanced 2021) -

(2 types)

A
  1. Daily ward claim limits
  2. Claim limit for sub-acute care at community hospital
49
Q

What are some examples of Outpatient Treatments?

  • Medishield Life (Enhanced 2021) -
A

Claim limits for outpatient and radiotherapy

50
Q

How much have the payouts for outpatient cancer treatments grown from 2017 to 2020?

  • Medishielf Life (Cancer Coverage) -
    (percentage)
A

50%

51
Q

When was the New Cancer Drug List released?

A

September 2022

52
Q

What is the change in amount of cancer coverage from September 2022?

A

Before: Flat $3k a month
After: $200 - $9.6k a month

For treatments that are clinically proven and cost-effective.

53
Q

What is the change in IPs for Cancer Coverage from Apr 2023?

A

IPs only cover drugs and their use on the Cancer Drug List

54
Q

How many insurers are IP providers?

A

7

55
Q

Who are the insurers who provide IPs?

A
  1. AIA
  2. Aviva
  3. AXA
  4. Prudential
  5. NTUC Income
  6. Great Eastern
  7. Raffles Health Insurance
56
Q

What is a deductible?

(2 components)

A
  1. The fixed amount payable before Medishield Life payout starts.
  2. Paid once in any insurance policy year you are hospitalised
57
Q

How much is the deductible for Class C + age 80 and under?

A

$1.5k

58
Q

How much is the deductible for Class B2 > + age 80 and under?

A

$2k

59
Q

How much is the deductible for Class C + age 81 and over?

A

$2k

60
Q

How much is the deductible for Class B2 > + age 81 and over?

A

$3k

61
Q

What is co-insurance?

A

The % of the claimable amount that you need to pay.

62
Q

What is the co-insurance if the bill size is $0 to $5k?

A

10%

63
Q

What is the co-insurance if the bill size is $5,001 to $10k?

A

5%

64
Q

What is the co-insurance if the bill size is more than $10k?

A

3%

65
Q

What is the co-insurance if it’s outpatient treatment?

(percentage)

A

10%

66
Q

Why the change from full to co-pay riders?

A
  1. Full riders create buffet syndrome
  2. Patients receive excessive treatment
  3. Patients get overcharged
  4. Premiums are increasing –> Healthcare costs increase
67
Q

What does full riders cover?

A

Deductible & Co-insurance

68
Q

When did sales of full riders cease?

A

1 Apr 2019

69
Q

How do co-pay riders work?

at least X% of hospital bill
medical bills are capped at $Xk a year

A

At least 5% of the hospital bill.
Capped at $3k a year

Refer to slide example

70
Q

What is the Clinical Claims Resolution Process?

A

An independent and impartial avenue for recourse if they are issues pertaining to IP claims.

71
Q

How much is the admin fee per dispute for policyholders?

  • Clinical Claims Resolution Process? -
A

$50

72
Q

How much is the admin fee per dispute for medical practitioners?

  • Clinical Claims Resolution Process? -
A

$200

73
Q

How much is the admin fee per dispute for medical institutions/insurers?

  • Clinical Claims Resolution Process? -
A

$500

74
Q

When was Eldershield launched?

A

2002

75
Q

What does Eldershield cover?

A

An affordable severe disability insurance with life coverage.
- When you cannot perform at least 3 out of 6 activities of daily living (ADL) after a deferred period of 90 days

76
Q

When are you automatically enrolled in Eldershield?

A

40 years old

BUT can opt-out (e.g. Careshield Life is MANDATORY)

77
Q

What are the payouts for the 2002 Eldershield 300?

A

$300/month for 5 years

78
Q

What are the payouts for the 2007 Eldershield 400?

A

$400/month for 6 years

79
Q

When does the Eldershield premiums stop?

A

Start: 40 years old
End: 65 Years old

  • Use Medisave to pay
  • Are leveled at inception
80
Q

What are the 6 Activities of Daily Living (ADL)?

A
  1. Washing
  2. Dressing
  3. Feeding
  4. Toileting
  5. Transferring
  6. Walking/Moving around
81
Q

What is Careshield Life?

A

Mandatory, universal, life time coverage for SC and SGPR.
- Tackles severe disability

82
Q

When are you auto-covered under Careshield Life?

A
  1. Those born between 1980 to 1990.
  2. Those who turn 30 (including those with severe disabilities)
83
Q

When does Careshield Life premiums end?

A

Start: 30
End: 67

(They increase yearly and are payable by Medisave)

84
Q

How much is the Careshield Life payout?

A

Start at $600 in 2020 (Covers for lifetime)

(E.g. Eldershield only covers 5-6 years)

85
Q

How much will the premiums and payouts for Careshield Life increase each year for the 1st 5 years?

A

2%

86
Q

How much was the annual premium for 30 year old males in 2020?

  • Careshield Life -
A

$206

87
Q

How much was the annual premium for 30 year old females in 2020?

  • Careshield Life -
A

$253

88
Q

What happens to the payout amount once an insured starts collecting a payout?

  • Careshield Life -
A

Payout amount will be fixed.

89
Q

What happens to the payout amount once an insured finishes paying their premiums at age 67?

  • Careshield Life -
A

Payout amount will be fixed.

90
Q

How much higher monthly payouts does Careshield Life Supplements provide?

A

Up to additional $5k + provide payout based on more lenient definition (2 out of 6 ADL)

91
Q

Am I sufficiently covered (Life stage)

A

Refer to slides

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