Mr. Gu Ziqiang, who worked in Singapore for 3 years as a bus driver, had a day surgery at Alexandra Hospital for nasal obstruction in 2012. Day surgery requires no overnight stay in the hospital. Unfortunately, he ended up in coma for a whopping 3 years. This incident happened when his second son was just 6 months old.
His wife, Kong Ling Hui, is now suing the Jurong Health Services and three doctors for alleged negligence.
It was also reported that with the sole breadwinner in coma, his wife has to work earning around S$420 a month in Chengdu. She could hardly support her two sons, parents and her in-laws. Her sons are now 4 and 7 years old respectively. What is also sad is she now lives alone while her two sons live with her parents. It was also reported that she has to resort to borrow money from friends and relatives to pay for their house.
This incident highlights the utmost importance of financial planning for those who have dependents. What kind of financial planning a typical person with dependents should do?
Hospital & Surgical Insurance
A hospital & surgical insurance would have definitely help with the medical bills. It is compulsory for Singaporeans and Permanent Residents to be insured with Medishield Life from 1 November 2015 onwards. However, Medishield Life is meant for B2 and C class ward. Most people are insured with a Private Integrated Shield plan which would help to pay for most - if not all of the entire hospital medical bills.
Foreigner with valid FIN numbers can also buy a private shield plans from some insurer although the shield plan is not-integrated.
Total and Permanent Disability (TPD)
Total and Permanent Disability (TPD) is normally a rider attached to a life insurance policy. There is no standard definition for TPD and it varies from insurer to insurer.
For coma, it likely qualifies for TPD claim. There is no TPD rider that covers for life. Normally TPD coverage ends at 65 or 70 years old.
Long-term Care Insurance (i.e. Eldershield)
All Singaporean and Permanent Residents are automatically enrolled in the Basic Eldershield when they turn 40 years old. Basic Eldershield pays $300 a month for 5 years for those who turn 40 before September 2007. Eldershield pays $400 a month for 6 years for those who turn 40 in and after September 2007.
To qualify to claim from Eldershield, the individual must proof to be unable to perform 3 out of 6 of the Activities of Daily Living namely: Transferring, Mobility, Toileting, Dressing, Washing and Feeding.
One of the common complain of Basic Eldershield is that the amount is too low and the payout period is too short. The good news is that it is possible to upgrade to a larger payout and longer period.
There are 37 definitions of the critical illness (HERE). Coverage for coma is one of definition.
Disability Income Insurance
For income protection, the disability income insurance is required. Disability income insurance pays when the insured is no longer able to perform material duties of own occupation. Blue collar workers and certain specialised occupation such as pilots are not permitted to be insured with the disability income insurance.
Lasting Power of Attorney (LPA)
The LPA is needed to allow the donee to act on behalf of the donor in the event the donor does not have the mental capacity to do so. The $50 application fee charged by Office Public of Guardian is waived for 2 years starting 1 September 2014. Moreover, the LPA forms can be submitted via SingPost’s Business Reply Service for free for two years.
However, fees charged by certificate issuers are not waived.
Writing a Will
Not just any will but a will that is suitability written to take into account of children’s needs is needed to be written.
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