You’re in your 20s, healthy and you’ve just secured your first real job. You’re all set for life. With age on your side, you’re not worried about health issues coming between you and your life goals – whether that’s earning S$100k per year by the time you hit 30, setting foot in every continent by your mid-30s or retiring at 40.
So, is medical insurance important and should you get it when you’re young and healthy?
Four reasons why should you care about medical insurance
1. Low hospitalisation risk doesn’t mean no risk
In your 20s and 30s, your body is seemingly strong enough to cope with anything. Late nights and early starts, unhealthy eating patterns, smoking and excessive drinking, long working hours even through illness, intense workouts or none at all, frequent travelling… the list goes on.
Being young and without pre-existing health conditions, it appears your odds of being hospitalised at this stage of life couldn’t be lower. Here comes the sobering reality: Not all hospital patients are over 40 and not all have chronic conditions like cancer and heart disease. Other common reasons for hospitalisation in Singapore1 include accidents, poisoning and violence, and infectious intestinal diseases – which young adults are familiar with.
Sometimes, the health sins of our youth catch up with us earlier than expected, and could require hospital treatment even before we hit 40:
- Exercise-related injuries and other accidents: Fractures
- Poor eating habits or consuming food that’s not hygienically prepared: Gastrointestinal issues
- Stress: Hypertension and cysts
The bottom line: While young and super-fit individuals are at lower risk of hospitalisation, it’s impossible to predict illnesses or accidents. Being warded for medical observation or undergoing surgery, no matter how minor, can hurt your budding finances. That’s where having medical insurance comes in.
2. Rising healthcare costs mean more expensive private healthcare
According to a 2022 survey, Singaporeans’ top two concerns were job security and competition, and whether they can stay ahead of healthcare costs2. This isn’t surprising. Healthcare costs have gone up over the years and it’s a trend that’ll only continue as treatments become more sophisticated and healthcare services improve.
What does this mean for those of us who prefer the privileges and/or services that come with private medical care, e.g. less waiting time and comfortable air-conditioned wards with greater privacy? Rising medical costs and lower subsidies for private care means you pay more out of pocket in the event you’re hospitalised in a private hospital or wards higher than B2 at a restructured hospital.
Not sure what out-of-pocket expenses for medical care mean? Read this article that covers what deductible and co-insurance mean.
Even “small hospital issues” due to falls or food poisoning can make a huge dent in your finances. Check out what private hospital patients paid3 for conditions/operations without catastrophic or severe complications below. It’s based on historical transacted inpatient fees where 75% of patients were charged a total bill below the indicated amounts:
- Foot fracture: S$18,227
- Urinary tract infection: S$11,834
- Gastroenteritis: S$8,521
Any of these bills would push you further away from your financial goals like putting a downpayment on a BTO (Build-To-Order) flat or buying a car. So, you might want to consider passing your potential medical costs to an insurer.
3. Having company-provided medical coverage is great but you shouldn’t go uncovered in between jobs
As an employee, you have company-provided medical insurance which can help protect your personal savings from hefty hospital bills. An important thing to note is that this coverage ends when you when you leave your job. So, during those few weeks or months before you start your new job, you won’t have an insurer to pass your medical bills to if you’re hospitalised.
That’s why savvy young adults make it a point to always have their own medical insurance, whether they’re employed or not. Want to change jobs, or take long work breaks to travel, do volunteer work or go back to school? Go all out!
You don’t have to choose the most comprehensive medical coverage. If your health risk is low, opt for a low-coverage plan which would be more affordable.
With your personal medical insurance plan as your first line of defence, your corporate medical insurance plan acts as a supplement. Together, they give you greater protection against bigger hospital bills. For instance, if the claim limit on one plan is insufficient to cover your hospital claim amount, you can claim the remaining amount from your other plan. Which plan do you claim from first? Check out my smart tips for working adults to make a post-hospitalisation claim.
Having an additional layer of assurance is important when you’re just starting out in life – trying to support yourself, pay off student loans and save for financial goals. Managing medical bills is the last thing you need right now.
4. Getting insured when you’re young could mean hassle-free coverage when you’re older
Your health risks increase with age. From 40 onwards, you may be more susceptible to costly illnesses like heart disease, stroke, arthritis and cancer, making insurance more crucial at this stage of your life. However, 20 years from now, you may have to jump through more hoops when applying for medical insurance, e.g. undergoing health check-ups and underwriting. The anxiety of finding out if your application is approved alone might send your blood pressure through the roof!
Here's a hack for all young adults:
You can lock in higher medical coverage from age 40 onwards with zero application hassle by getting an affordable basic medical plan in your 20s. Some starter medical plans for young adults offer guaranteed conversion to a more comprehensive medical plan when you hit 40. They begin by giving affordable basic coverage when you’re young. Once you turn 40, the insurer converts this to a higher coverage medical plan that could have a sum assured as high as S$1 million – without need for a medical check-up. How cool is that? You can have greater assurance about securing higher coverage in future – right now.
Protecting your health is crucial for hitting your financial goals
Health and wealth are intrinsically linked. Good health allows you to work, grow your savings and tick off financial goals, but unexpected health issues can get in the way. Medical insurance ensures you can afford the level of healthcare you want without compromising your financial goals. Just remember to choose the plan that suits your needs and budget. In some cases, getting protected when you’re young comes with the hidden benefit of guaranteed and hassle-free conversion to a more comprehensive plan when you’re older.
So, if you’ve been ignoring medical insurance, this might be a good time to do the adult thing and look at getting protection, which could take just a few minutes online.
Feel free to check out the different types of medical insurance plans offered by Singlife Singapore.
1. Source: HealthHub, Admissions: Top 10 reasons for being admitted to hospital in Singapore, accessed on 1 June 2023.
2. Source: The Straits Times© Singapore Press Holdings Limited. Extracted with permission. “Job security, healthcare costs top two concerns in poll on Forward Singapore topics,” 24 October 2022.
3. Ministry of Health, Historical Transacted Bill Sizes and Fee Benchmarks, accessed on 1 June 2023.