Martin Lee @ Sg
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Complaints about Medisave-approved Insurance Plans

The Ministry of Health (MOH) recently shared with all life insurers that MOH has been receiving complaints on the unprofessional sales and marketing of Medisave Approved Insurance Plans.

Previously, I have wrote about this topic at length, such as the Dangers of Switching Shield Plans, and the Twisting of Shield Plans.

As a result, MOH wants all insurers and their distributors to be more compliant on the financial advisory process.

The following are some guidelines to adhere by:

  • No misrepresentation or unprofessional selling of Medisave Approved Insurance Plans.
  • Ensuring full disclosure of :
    • The benefits and features of the plans.
    • The nature of  supplement plans/riders, and ElderShield supplements. These are purely optional and should not be portrayed as Ministry of Health (MOH) Approved or Central Provident Fund (CPF) approved products.
  • Highlighting to clients that they are subjected to underwriting whenever there is a switch or replacement of plan. This may have the following possible disadvantages :
    • Clients may not be insurable at standard terms.
    • Clients may have to pay a different premium.
    • Terms & conditions of the new policy may be different, such as pre-existing conditions being excluded in the new plan.

I would say that the cause of this problem is a mixture of both ethical as well as competency issues among insurance agents and financial advisers. Shield plans pay low commissions, thus many people do not devote a lot of time to understanding them well.

And this thing has probably been going on for a very long time, just that nowadays people have become more aware and thus there are more complaints to MOH.

Leave a Comment:

Henry says 10 years ago

The last 3 years I have also been receiving many proposals to upgrade plans from Great Eastern and NTUC Income.

Dependent Protection Scheme (GE)
ElderShield ValuePlus 400 (GE)
Income Shield

The first year, I agreed to the upgrade. Then came more and more every few months. It doesn’t seems to end until you signed the agreement. It’s very annoying and confusing for the layman like me. In all these, I noticed a common pattern. Each upgrade will make you pay more premiums. Even if you agree to the upgrade this year, the next year they will send you another upgrade. It never seems to end !

While I can understand the objective of insurance companies to want to show growth in their premium every year, is this correct and ethical at the expense of man on the street ?

Now I have to check my CPF deductions carefully every year in case there is a slippage (who knows) and extra premiums were deducted without my agreement. I also hope CPF board will be very careful to verify with the insured each time the insurance company submit a higher amount of deduction claimed to be for upgrading.

Nowadays, there is no more trust on all financial related companies. One never know when those fellows will come out with another new type of creative selling method or financial engineering to suck our money. I have yet to hear of a case when someone win a court case against a bank or insurance company in S’pore. Uniquely S’pore !

Nuts says 10 years ago

Usually it is the last few points i.e the pre-existing conditions and insurability risk that agents and customers are confused and/or naive about.

I have seen many cases previously where customers switched to another Shield plan, only to get letters from the insurer stating many exclusions, sometimes practically half their body and organs is excluded. Then these customers will run to the insurers HQ office to complain and ask for re-instatement to their former Shield plans. If it’s still within the same insurer, then usually the insurer will accede, after much complaining. But if the customer has switched to another company, then the former insurer is under no obligation to take the customer back. Unless maybe if the customer still has big policies with the old insurer in endowment or ILPs etc.

Also, at least for the big insurers in S’pore, they work primarily with exclusion of pre-existing and exclusion of whatever future conditions that may arise from the pre-existing. For Shield plans, the profit margins are so low that the insurers cannot be bothered to construct separate actuarial tables for sub-standard and calculate statistical modeling to come up with loading on Shield premiums. Especially for private hospital Shield plans, where the customers typically whack the most expensive treatments and health checks and screenings and charge all to their all-inclusive and all-comprehensive private Shield plans, just like in USA.

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