Participating Policies and Your Guide to Health Insurance

Questions: a) From the information found on Life Insurance Association website on the different types of insurance at www.lia.org.sg Consumer Zone The Library Consumer Guide Your Guide to Participating Policies and Your Guide to Health Insurance Explain the validity of the following statements. i) Under Medical Expense Insurance, a policyholder will not receive full reimbursement on the medical expenses incurredii) For a Critical Illness Insurance, a policyholder can claim for benefits when a specific type of disease and surgery is diagnosed during the waiting period iii) Disability Income Insurance aims to fully replace policyholders total income b) Under Trust Nomination, a policy owner will continue to refrain full rights and ownership over the insurance policy and can revoke the policy at any time while under Revocable Nomination, the policy owner will lose all his rights to the ownership of the policy and can only revoke the policy with written consent from all nominees. Explain. Answer: a) i) Under medical insurance expense, full reimbursement will not be received by policy holder on incurred medical expenses. The above stated facts are false. Medical insurance expenses pay the amount incur on medical expenses in case of any accident or any illness. This medical expense insurance policy covers the medical expense such as inpatient medical treatment or surgery, consultation with specialist of particular diseases even before as well as after the hospital stay .X-rays and laboratories test expense also covered in the policy. ii) In insurance related to critical illness, a policy holder can claim benefits for a specific type of diseases and surgery diagnosed in waiting period. The above stated facts are false. Waiting period in case of critical illness insurance is 90 days .This is applicable on the diseases like major cancer, severe heart attack and coronary artery by-pass surgery. In case of diagnosis or surgery of abovementioned diseases during the waiting period, the benefit of such insurance cannot be claimed by the customer. iii) Disability income insurance aims to fully replace policyholders total income. The above stated facts are false. Insurance for Disability income aims to share your financial burden in case of any type of disability to a person and he wont be able to work but it does not have any intention to replace the income which the person is earning before the accident or illness. In this case the company pays about 80% of the average monthly salary of the person. There are different meaning of disability used in this policy. Some policy defines disability that the person is not able to complete his usual work for a particular period of time which some of the policy determines that the person is permanently disable and not able to perform his work at all. b) A policy owner, under Trust Nomination, will continue to refrain full rights and ownership over the insurance policy and can revoke the policy at any time while under Revocable Nomination; the policy owner will lose all his rights to the ownership of the policy and can only revoke the policy with written consent from all nominees. The above stated facts are false. In case of trust nomination, When the policy holder appoints a nominee, then he will lose all the rights and ownership over the insurance policy and he will not be able to claim any benefits whether living benefits or death benefits .The whole benefits will be enjoyed by the nominee only but the premium of insurance is still the liability of the policyholder .In trust nomination, the policyholder loose the rights for revoke the name of the nominee without the written consent by the nominee. In case of revocable nomination, policyholder continues to enjoy the benefits, ownership and rights over the policy. The nomination of the nominee can be revoked at any time with the consent of the policyholder, without the willfulness of the nominee that he appointed. In this case only the benefits related to death will be availed by the nominee and all the benefits related to living will are enjoyed by the policyholder himself. References:- 1. Money Sense, 2009, Your Guide to the Nomination of Insurance Nominees; Available at: lia.org.sg/files/document_holder/.../NOB_Guide_Oct09(Eng).pdf2. Money Sense, 2015, Your Guide to Health Insurance; Available at: https://www.lia.org.sg/files/document_holder/Consumer_Guides/YGTHI_Jan2015_English.pdf3. Money Sense, 2008, Your Guide to participating policies, Available at: https://www.lia.org.sg/files/document_holder/Consumer_Guides/YGTPP_English.pdf