Unable to obtain Insurance due to existing health conditions? [Pru wants to change that]
Availability is a fascinating concept – with far reaching consequences.
Coincidentally, it can be encapsulated neatly into a single sentence:
We only want what we cannot have.
Now isn’t that the truth of the matter?
The best example we have to offer is none other than the Sungei Road market. Also known as Thieves Market, it was shut down in July last year, after being in operation for eight decades. The furor and consternation set in months before the official closure date.
People were up in arms, and were decrying the irreparable loss to a piece of Singapore’s history – not to mention one less flea market to shop in.
There were the articles. The Facebook protest groups. The surge in photographic documentaries.
But when was the last time any of us visited Sungei Road? Personally, I never have – in all its 80 years of glory. And truth be told, I don’t think majority of us would have ever visited the place, if not for its planned disappearance. (Happily, it has since found new life in a relocation to Golden Mile Tower)
That saga seemed to work out fine, but availability still represents one of Life Insurance’s age old problems.
When you are hale and hearty – there are no lack of options to get cover. The choices seem to flow as abundantly as a politician’s promises before an election. Hence the lack of impetus to take action.
But when genetics (or lifestyle choices) saddle you with a serious medical condition – then the door for protection is pretty much closed. Easier to solve a Rubik’s cube blindfolded than it is for you to be insured. Oh, how the tables have turned!
So when Prudential asked if we were interested to examine an “industry-first” product they were rolling out, we set our beer down and got right to business.
They wanted to solve this availability problem once and for all.
PruVital Cover: Coverage for those who are unable to get coverage
In their own words:
Prudential Singapore has launched Singapore’s first insurance plan, PruVital Cover, offering protection to people who have been diagnosed with type 2 diabetes, the most common form of diabetes, and the three “health highs” – high blood pressure, high cholesterol and a high body mass index (BMI).
In our own words:
Too good to be true.
How exactly does it work?
It is a Term Plan, catering to people diagnosed with one or more of these 4 medical conditions:
High Blood Pressure
High Cholesterol Levels
Type 2 Diabetes
It is meant to protect these people that would otherwise be unable to be insured. It also provides Critical Illness cover, along with Total and Permanent Disability cover, as optional riders.
How many people stand to benefit?
Our guess is: quite a big number, actually.
Here are the percentages of the population (aged 18 to 65) diagnosed with each of the 4 medical conditions:
High BMI: 8.6%
High Blood Pressure: 23.5%
High Cholesterol Levels: 17.4%
Type 2 Diabetes: 10.8%
Source: MOH Statistics
High Blood Pressure alone afflicts nearly 1 in 5 Singaporeans between the age of 18 to 69. (Probably made worse by the projected raise in GST, but I digress)
From Pru’s media kit, regarding a poll on their customers who had been declined cover:
… more than seven in 10 were rejected because they had at least one of the four medical conditions…
Why is it such a big deal?
If we feel finicky about losing a flea market that we hardly even visit, imagine the prospect of being denied insurance cover – forever.
Hand on heart: It is a bloody big deal – especially to those affected.
What are the premiums like?
Pricier than normal, but not unexpected.
For a non-smoking male of age 35, coverage of 200k (Death and TPD) till age 65 costs $1,434 per annum.
The female equivalent annual premium is $1,214.
Premiums are constant (level) until the policy expires. To the best of our understanding, premiums are also the same regardless of the number of medical conditions present.
What shines bright for PruVital Cover (In our own eyes)
It is a Term Plan
A great big Hallelujah for this one! Term plans are fantastic: No frills, all thrills. Pure protection, and no messing around. Enough said.
Only Simplified Underwriting required
As we understand it, just fill in their proposal form with the relevant declarations. The pleasure of simplicity cannot be understated.
Critical Illness cover included (albeit restricted)
We like that CI cover is available as well, though restricted to the 5 illnesses only:
A long period of cover available
The maximum age that a person can opt to be covered till is 80 (Age Next Birthday) – pretty long for a niche policy such as this one.
It represents hope for those that need it most
We save the best for last. Life Insurance is something that everyone needs, but some may need it more than others.
PruVital Cover is a bastion of hope to those that cannot receive cover in the conventional sense.
Improvements we would like to see
Alas, perfection is a goal we all strive for, but can never attain. Even with an avant-garde policy launch, we still spot areas that would improve the plan, at least in our standing.
A wider age band of people that can buy this
Right now, this plan is available for people between ages 30 – 65 (Age Next Birthday). It is reasonable to postulate that most people with medical conditions would fall under this age band, but that adds more commercial safety to push the entry age to as low as say 25, or even 21. (Since the risk is low)
Side note: Buy your coverage as early as possible, healthy or otherwise!
An expansion of the number of Critical Illnesses covered
For PruVital Cover, policy holders can include a rider that covers 5 Critical Illnesses they face a greater likelihood of developing, given their pre-existing conditions.
Pareto’s Principle is a good argument for only including these 5 CI conditions, but we envision a policy holder sleeping more soundly if it were expanded to 15 ~ 20 conditions. (Currently the standard CI list from LIA includes 37 listed conditions)
An increase in coverage limit would be welcome
The maximum available cover for the plan is 500k. While that is a decent amount of cover, we would like liked to see it stretched to the magical 1 million dollar mark, or at least 750k.
Why? Even as a single, my own protection needs exceed 400k. For folks with a family and children, their protection needs can easily blow past the 500k mark.
Net Net: Definitely a Godsend
Back to our initial concept of availability: if you are in the pink of health – then you will always find better cover at a better price, relative to this plan.
But if you’ve missed your chance to get the coverage you need, then PruVital Cover is an absolute no-brainer.
One that lets you have a second bite at the protection cherry.
While. Stocks. Last.
We would like to thank Prudential Singapore for inviting us to submit this review, with the aim of educating the public. We appreciate their graciousness to hear our suggested improvements, and are grateful for their tolerance to all our inane questions.
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.
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