Monday, September 5, 2016

Thoughts on the HI Module

Insurance is important and I know zilch about it. As part of my quest for personal development, I have spent the past 2 weeks studying for the Health Insurance (HI) Module offered by the Singapore College of Insurance (SCI). Why 2 weeks when I could have scheduled the examination at any time? Because I came across another blogger who shared that it could be done within 2 weeks. Well, I passed the module, but I now know I should allow myself additional buffer time when I do attempt the remaining SCI modules in the future.

Hopefully, as I take up more insurance modules, I would be able to reach a point where I am able to advise myself as to what insurance products I would need. Also, I could join the insurance industry in the event my main career and my backup careers fail me. However, I doubt that. Couple the notions of "insurance agent" and an "extreme introvert" and you'll have a person-job mismatch of epic proportions. Still, additional options doesn't hurt.

The following points are what I've learned from the HI module and which I've applied to my personal situation. Your mileage may vary; each person's financial situation is unique.

1). I do not think I need a Disability Income/Income Replacement insurance. As an income investor, I hope that the income stream from my portfolio will, one day, be sufficient to serve as a Disability Income insurance. Furthermore, you may not be able to receive the full benefits of an Disability Income insurance if you have income from other sources/high net worth. Under the coordination of benefits clause, the insurer could reduce the benefits pay-out if you have other sources of unearned income, let's say, dividends from an income portfolio.

In the intervening period (which is, I am at the most vulnerable as the income from my portfolio is pretty underwhelming.

2). I don't think I need a Hospital Cash insurance either. A Hospital Cash insurance pays you for each day you stay in the hospital. I think my income portfolio could also be used to carry this burden.

3). With Medishield Life, I am, to some extent, covered for Class C/B2 wards. If I do want better amenities (Class B1/A wards/private hospitals), I could get an Integrated Shield Plan. There are cases in which individual over-insure themselves with an Integrated Shield Plan and yet opt for a C/B2 ward out of ignorance of their insurance policies. This highlighted to me that I should thoroughly know what I want and insure myself accordingly.

4). While a medical expense insurance will take the full brunt of one's medical needs, an individual still has to fork out some cash to pay for the deductible and co-insurance. An emergency fund would be useful in paying down these out-of-pocket expenses.

Now, time to hit the books again. Onwards for personal development!


  1. Unintelligent Nerd,

    That's a first for me!

    Getting yourself "educated" on insurance before you make a purchase.

    That's taking the concept of DIY insurance to the next level ;)

    1) More cost effective than engaging a fee-based financial adviser.

    2) Its definitely better than getting "free" advice from commission-based insurance agents!

    No one has your best interest than you yourself ;)

    1. Hi SMOL,

      Thanks for visiting!

      But it's not easy. Humans like to hire someone else with the credentials to "do it for them." Then guess what happens next? Commit to a sub-optimal option to the benefit of the insurance agents.

      The loss when I surrendered my endowment plan was painful enough already.... >.<

  2. Hi UN,

    I think it's important to have insurance while you are building up your asset base to go towards self insurance. For disability income, getting covered for a fraction is better than not covered at all. Eventually when our financial assets grow bigger, we can opt out of such insurance.

    Be careful of the income from stocks. They are never guaranteed and that's something in which an insurance plan might provide. Given a choice, would you want a higher non guaranteed income or a low stable income? We don't have to choose either, I choose both lol

    1. Hi LP,

      You make a good point and I agree with you. I want to choose both too! But that will have to wait till my cash inflow is stabilized first. I'm currently unemployed (research jobs in my field is always contractual unless I'm a Masters/PhD holder) and insurers, according to the textbook, are not keen to offer Disability Income insurance to people who have unstable jobs.

      Bo bian for my case. I think I'll prioritize Medical Expense Insurance and either/or term/whole life insurance (I've yet to understand the intrinsics of the debate you guys are having) over Disability Income insurance. From what I read, Disability income insurance appears to have more hoops and hurdles to jump through though.