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Different premiums for Class B1 ward standard IP
PREMIUMS of the standard Class B1 Integrated Shield Plans (IPs) to be rolled out in the first half of the year will be the only differentiation among the five IP insurers and, hopefully, not be "substantially higher" than that of the government's MediShield Life premiums.
Khoo Kah Siang, president of the Life Insurance Association Singapore (LIA Singapore), made this point at a briefing on Wednesday, saying that details of the IP for Class B1 hospital ward would be announced in the next two months.
This follows the MediShield Life Review Committee's recommendation released in June 2014 that the government work with insurers to develop a standardised IP targeted at Class B1 level, so as to give Singaporeans the option of enhanced coverage on top of the basic MediShield Life plan.
In short, all five IP insurers (AIA, Aviva, Great Eastern, NTUC Income, and Prudential) will provide the same coverage for Class B1 ward but their IP premiums will vary - because each company would set its premiums based on its estimation of claims, risk management practice and expenses, among other things, said Dr Khoo.
He stressed that it boils down to "more than prices" when consumers decide whether or not to sign up for the standard Class B1 IP. "Ultimately, it's a long-term plan, and premiums are not guaranteed. Different companies may raise premiums differently. So the premium is only one indicator but not the best indicator because it's a YRT (yearly renewable term) product. In the end, you choose the plan because of the service you will receive and the affinity with that particular brand, among other things," Dr Khoo added.
Separately, LIA is also looking at putting together what it described as "a package of changes" by the end of the year, as it tries to improve transparency and disclosure standards in the life insurance industry here.
While the details are still a work-in- progress, it said last November that a key reform would include the projected yields to maturity or net returns in the benefit illustration of participating life plans, including whole life and endowment policies.
At the same time, the association said it would continue to educate consumers so that they understand the approach insurers take to manage their products.