Last Updated on 15, April 2014
One of the continuing problems I faced is with regard to Aviva’s MyShield Plan 2. Under this plan, the insured is entitled to stay in government hospital. A severe pro-ration factor will be applied if the stay is in a Private Hospital. The reason why I had so many problems with Aviva MyShield Plan 2 is because many clients bought this Plan 2 for their children as it is free up to age 20 provided both parents are insured at least Plan 2. Strangely, the parents will buy the highest Plan 1 for themselves (not free) and yet will get a lower plan at Plan 2 for their children. I always find it conflicting why parents are treating their children different from themselves. Usually parents like to give their child the best but for this case it is the other way round.
Many parents bought Aviva MyShield Plan 2 for their children because it is free – not because they viewed it as a necessity or a need. So the decision has to do with freebies than the merit of the product itself. Unfortunately, when their children are hospitalized, they will discover they bought into the wrong plan for their children. After the hospitalization, they will ask me to upgrade their children’s plan to Aviva MyShield Plan 1. Unfortunately again, Aviva will reject the upgrade. Of course the insurer will reject the upgrade. Which insurer will be so silly as to permit anti-selection? In fact, if the insurer willingly allowed the upgrade for such sub-standard case, existing policyholders (whom may not have made any single claim before) will have to bear the increased in premiums.
Yesterday, my colleague in office was complaining to me how frustrated she was regarding the same issue. She had to deal with a client who had bought Aviva MyShield Plan 2 for his child who was warded in a private hospital. Being hit by the pro-ration factor, she had to bear the blunt of the client’s frustration. We discussed among ourselves that the "free" Aviva MyShield Plan 2 had made many clients made the wrong decision and caused great misery. Coincidentally I saw in a forum HERE of another case of a parent who made the wrong decision – despite buying Aviva Myshield Plan 1 for him/herself and bought the Aviva Myshield Plan 2 for the child. It is quite likely it was due to freebies. Now he or she is asking whether can he upgrade the child’s plan to plan 1.
In the past, I used to permit clients to make their own decisions. But these days I find that it make no sense to permit clients to make their own decisions if the decision is based on some free gifts or discounted premiums. I began to notice the problems of Aviva Myshield Plan 2 last year and since then I have refused to transact for clients who were obviously attracted to freebies than their own needs. If they insist to buy the insurance due to the free premium, I’ll ask them to sign a disclaimer that they have rejected my advice. So far in all cases, when they saw that I want them to sign a disclaimer, they will start to realized how silly their decisions were.
By the way, every month I’ll have at least one client making claims related to hospitalization bills. The medisave-approved shield plan is really like a national service – the insurers are just doing national service. It seems to me that the claims experience is very bad. One insurer is going to raise premiums for their shield plan. Another insurer – namely NTUC Income – has tighten their underwriting guidelines for Incomeshield to the extend that I believe most people cannot get insured at all. For example, they consider a person first diagnosed as high cholesterol below age 35 has total decline. It is very serious to be considered "total decline". Most of my clients have high cholesterol even before they reach 30.
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