As part of the underwriting requirement, NTUC Income will be sending applicants aged 60 and above who apply as new applications or upgrade applications to Enhanced IncomeShield (Preferred, Advantage, Basic) for a routine medical examination.
The interesting thing about this new medical examination requirement is that NTUC will be paying for it. Typically, the premiums from shield plans are lower than traditional life plans so insurers usually do not pay the bills if any medical examination is required.
Things have probably come to a stage whereby it is cheaper to send everyone age 60 and above for a checkup rather than accepting all of them and then run the risk of having very unhealthy personnel in the insurance pool.
Application for insurance plans is always based on disclosure by answering questions related to health. If someone does not go for any health checkup all his life, he might answer “no” to all the questions but that does not mean he is perfectly healthy. For example, he might be suffering from health blood pressure or high cholesterol without his knowledge.
When it comes to administering claims for those conditions, things might get complicated as it will then be a matter of proving or disproving “pre-existing conditions“. That will depend on the doctor’s diagnosis of when the condition first occurred and whether the insured can justify that he had not had any symptoms at all.
A routine medical examination at the point of application would be able to detect some of these common medical conditions and allow the insurer to either exclude the conditions or even reject the application.
In a way, insurance operates similarly to a bank.
When you don’t need money, a bank will keep on offering to lend you money. When you need money, they will turn you away.
When you are healthy and don’t need any hospitalisation, you will be able to buy medical insurance. If you are unhealthy, the insurance company will turn you away when you apply.
Unfortunately, most people only realise the need for insurance when they become sick and by then, they might not be able to get it.