IP insurers offer cheaper riders that still protect against huge hospital bills

More options for consumers in the face of higher premiums payable as they age

- Salma Khalik

As people age, some are giving up their private medical insurance plans and riders because of the high premiums charged.

To retain them, several insurers offer a choice of riders: Maximum coverage at higher premiums, or less cover at lower premiums.

Anecdotally, people first give up their riders, which could cost more than their main insurance plan.

Riders are meant to cover only the portion of bills not paid for by Integrated Shield Plans (IPs).

IPs cover 90 per cent of bills beyond the initial deductible of $1,500 to $5,250, depending on age and ward class.

After that, if policyholders find the cost still too high, they may also downgrade to an IP that covers treatment in a lower ward class.

Like some, AIA chief executive Wong Sze Keed decided to retain her rider, but downgraded her IP and rider from a private hospital to a Class A plan, significantly reducing the premiums she now pays.

Two in three of the 2.97 million people, or 71 per cent of residents, with IPs also buy riders to prevent the shock of facing a huge medical bill.

Once they have a rider, however, people tend to make more frequent, as well as bigger, claims.

Insurers find themselves paying twice as much for claims by those with IPs and riders compared with those who have only IPs.

Hence, the need to keep pushing up premiums for riders that encourage the higher consumption of medical treatments.

Mr Chan Wai Kit, executive director of Life Insurance Association Singapore (LIA), said: "IP riders play an important role in helping individuals reduce their out-of-pocket expenses for large hospitalisation bills and medical treatments.

"Many policyholders recognise the value of these IP riders in providing additional financial protection, especially amid concerns of rising healthcare costs.