Should you cancel your Integrated Shield Plans?

MY client Ms Tan recently asked me if she should terminate her father's private Integrated Shield Plan (IP) with Aviva, after reading some newspaper reports on MediShield Life which is expected to start at the end of 2015.

Ms Tan's father is insured under Aviva MyShield Plan 3, which covers hospitalisation expenses in Class B1 ward and below in government hospitals. At 76, his annual premium is $2,649.42. As he can only withdraw up to $1,200 a year from his Medisave to pay for the premium, he has to pay the excess of $1,449.42 in cash.

I had in 2011 advised Ms Tan to get the Aviva plan for her father under the "moratorium" underwriting option, which is guaranteed issuance regardless of the applicant's health status, provided that his life and/or health applications have not previously been rejected or deferred. Given his age and multiple health conditions including raised glucose in blood, high blood pressure and nerve compression on spine, Mr Tan would be deemed uninsurable had he gone for the full underwriting option. Aviva "moratorium" underwriting was his only option to get health insurance then.