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Health Insurance vs. Disability Income Insurance: Do You Need Both?
Health insurance and disability income insurance both help protect your finances during unexpected health challenges. Knowing how they work together helps you make informed decisions for better coverage. This article breaks down their roles and how they contribute to your financial security.
Learn more: Health Insurance In Singapore >>
Understanding Health Insurance
Health insurance helps cover medical expenses incurred from illnesses, injuries, or disabilities. In Singapore, all citizens and permanent residents are covered under MediShield Life, a basic health insurance plan designed to offset large hospital bills and selected costly outpatient treatments.Â
However, MediShield Life may not cover all medical expenses, leading many to consider additional private health insurance plans to bridge the gap.
Understanding Disability Income Insurance
Disability income insurance provides a monthly income if you’re unable to work due to an accident or illness. This policy helps ease financial loss but typically doesn’t replace your entire income. Payouts can continue for a specified period, such as up to five or ten years, or until you reach a certain age, like 60 or 65.Â
Key Differences Between Health and Disability Income Insurance
While health insurance covers the cost of medical care and treatment, disability income insurance provides income replacement if you’re unable to work due to an injury or illness. Health insurance typically covers both short-term and long-term medical expenses, whereas disability income insurance focuses solely on income replacement during periods when you cannot work.
Prevalence of Disability in Singapore
Understanding the prevalence of disability in Singapore underscores the importance of considering disability income insurance. A study found that 3.1% of the adult population experiences some form of disability, with mobility, vision, and cognition being the most common types. Additionally, disabilities are more prevalent among older citizens, with rates at 13.3% for those aged 50 and above, compared to 3.4% for individuals aged between 18 and 49.
Source: National Center for Biotechnology Information (NCBI)
Do You Need Both Types of Insurance
Deciding whether to have both health and disability income insurance depends on your personal circumstances and financial goals. Health insurance covers medical expenses, reducing out-of-pocket costs during health emergencies.Â
Disability income insurance replaces part of your income if you’re unable to work due to a disability. Since disabilities can result in lost income, having both types of coverage can provide broad financial protection.
Find a Trusted Financial Consultant For Your Health Insurance Needs
Health insurance and disability income insurance are essential components of a strong financial plan. Health insurance covers medical expenses, while disability income insurance protects your income if you’re unable to work due to unforeseen events. By assessing your personal needs and consulting with a financial advisor, you can choose the right coverage to maintain financial security.
Finding the right expert is key to successful financial planning. To support our readers, we feature financial consultants for reference. Learn more below.
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This article is informative only and is not intended to be a substitute for professional medical advice, diagnosis, or treatment, and should never be relied upon for specific medical advice.