COMMON RETIREMENT
MYTHS BUSTED
• “CPF Life pay-outs will be
able to provide enough for my
retirement.”
As Prime Minister Lee Hsien Loong
illustrated in his 2014 National Day
Rally speech, the income stream
from your CPF funds is most likely
not enough to fund a retirement
that many Singaporeans would
consider comfortable. While certain
policies, such as the extension
of the Lease Buyback Scheme to
four-room flats and the property
pledge for the Minimum Sum, are
being revised, you will still require
additional streams of income.
• “I am a disciplined saver.”
If your savings sit solely in a bank
account, the effects of inflation
and the rising cost of living will
actually reduce the value of your
savings over time. Hence, Alex
recommends that personal savings
should only form a part of your
retirement funds.
• “I am still young and there is
no need to plan ahead for my
retirement now.”
As we have illustrated clearly in
the earlier part of the article, the
amount of money you need for a
comfortable retirement can be
rather staggering, so it’s best to
start as early as possible. Leaving it
until later will only exacerbate the
problem and while we understand
that you want to enjoy your youth,
we don’t believe that it should be at
the expense of your old age.
STAYING HEALTHY AND THE NEW
MEDISHIELD LIFE
Healthcare expenses tend to be the main reason
our retirement savings are depleted quickly. After
all, old age can be rather unkind to our body. We
start experiencing mysterious aches and pains,
and our joints begin breaking down more often,
leading to frequent clinic visits and hospital stays. In
response to rising healthcare costs and longer life
expectancies, the Ministry of Health Singapore will
be enhancing the iconic MediShield scheme at the
end of 2015, and will rename it as MediShield Life.
We’ve reached out to the Life Insurance Association
Singapore to break down what the new changes
mean for the average Singaporean.
Key changes of MediShield Life
MediShield Life will provide all Singaporeans
and Permanent Residents with health insurance
coverage for life, regardless of changes to their
health over time. The three key changes of
MediShield Life are:
• Life-long coverage
• Coverage for pre-existing medical conditions
• Higher claim limits and lower co-insurance to
cover more of large bills
Common misconception regarding the changes
of MediShield Life
Following the MediShield Life Review Committee’s
(MLRC) recommendations for MediShield Life,
a common initial response amongst many
Singaporeans is that they no longer see a need for
Integrated Shield Plans (IPs).
Integrated Shield Plan to meet those needs and
preferences.
As charges for the higher ward classes are more
expensive coupled with lower or no Government
subsidies, IPs provide Singaporeans who wish to stay
in such ward classes with additional coverage above
and beyond MediShield Life.
The effects of MediShield Life on those with
existing IPs
• MediShield Life to provide life-long coverage
Most IPs currently provide coverage for life.
MediShield’s enhancement to provide life-long
coverage will align MediShield Life with IPs over the
lifetime of the policy.
• Higher MediShield Life claim limits and lower
co-insurance to better cover large bills
IPs are designed as a single product in terms of the
premiums and benefits offered under MediShield and
the top-up portion of IPs. Hence, IP policyholders will
enjoy both the benefits of MediShield Life as well as
the additional benefits under the top-up portion of IPs.
The top-up benefits provided by IP insurers can
include:
• Less out-of-pocket expenses under as-charged
benefits or optional riders
• Adequate coverage for Classes B1, A or
private wards
• Coverage for pre- and post-hospitalisation
treatments
An IP comprises two parts - the basic MediShield
plan and enhanced benefits provided by IP insurers.
MEDISHIELD LIFE TO PROVIDE )
=YI