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Recently, I had a meeting with a few clients who were concerned about the rising hospitalization insurance premiums, also known as Integrated Shield Plans (IPs).

As their Financial Planner, they shared with me their concerns about long-term affordability following the Ministry of Health's (MOH) published data showing significant variations in lifetime premiums for Integrated Shield Plans across different insurers.

The data showed that premiums can vary significantly even for plans covering the same ward class, as both coverage and price are determined by the insurer.

MOH’s website shows the premiums that people have to pay from birth to age 100, based on rates in effect as of April 1.

Not only does the premium rise at every age band, but it can also be revised every year.

To give you an example, a private coverage plan with AIA without a rider in 2017 for a 41-year-old would have cost $570, fully covered by Medisave. Now in 2024, the premium is $1,004.40, of which $600 comes from Medisave and $404.40 in cash. This is an annual 8% increase over the past 7 years!

I realized that many people, including financial planners, oversimplify retirement planning by only considering current spending needs.

Most do not include premiums for hospitalization insurance in their calculations. Consequently, we often overlook long-term medical expenses.

Some might assume you would downgrade to a lower coverage plan to reduce premiums when they become too expensive in later years.

However, if you want to be well-prepared for the long term, we can take proactive steps today!

I propose starting a Healthcare Sinking Fund to pre-fund future premiums, allowing us to annually withdraw a portion to pay for the premiums of our Integrated Shield Plan and its riders.

If we invest our Healthcare Sinking Fund at a better rate of return, we can set aside less money.

While our CPF Medisave serves as a sinking fund growing at 4% a year, most of our future premiums will come from cash. Hence, we need a sinking fund beyond our CPF Medisave.

Additionally, besides helping you with your yearly Car Insurance renewal needs, I am also licensed to advise on investments through platforms like iFAST, Tiger Brokers, Philips, and more.

Whenever you're ready, here are three ways I can help:

1. Portfolio Review: Let’s review your current investments to ensure they align with your financial goals and the latest market trends.
2. Strategic Rebalancing: We’ll adjust your portfolio to enhance diversification and potential returns using proven strategies.
3. Continuous Monitoring: We provide ongoing oversight of your investments, so you can stay ahead of economic shifts and seize new opportunities.

I also use a software called Goalsmapper to accurately chart out your future retirement cash flow, allowing us to identify any future shortfalls that we can address today.

Below is a sample retirement projection done for a client.

If you would like to experience and chart out your future retirement, please reach out to me at 9675 9587 or reply to this email.

To learn more about investing and get useful tips, follow me on Instagram @coffeewithzest

Zest Chia

Executive Wealth Consultant | Associate Estate Planning Practitioner |

Licensed General Insurance Advisory

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