Tuesday, April 11, 2017

Shield Plan with NCD?!

Props to D&S for highlighting this news. I found the ST article about it and read more.

In a nutshell, Prudential is gonna roll out a different pricing structure for their Private Hospital tier Shield plan rider. It's a mouthful, but that's what it is.

If you are healthy, 10% NCD on the rider.
If you sick af, 200% premium increase.


Personally, I like the idea of implementing some sort of pricing element as a way to counter moral hazard, but the pricing seems absolutely retarded.

Get a slighttttttttt discount if you are healthy. Get screwed if you're not.

I don't know, doesn't sound too good to me imo.

I personally would rather see all the insurers to have a co-pay option like Prudential or NTUC.

(Link to super long post about co-pay vs no-pay Shield riders)

Actually my dream would be to have a stripped down no-frills rider like AXA Basic Care, but with a co-pay flavour.

Anyway, I'm in the midst of finalizing and wrapping my switch from NTUC to AXA. Hopefully I can post an insurance update soon!


  1. What is stopping health insurers from implementing NCD on those who made no claims say for x years?

    1. Becoz statistics have shown that people will whack all their medical benefits (and still not enough) in the last 2-5 years of their lives. Insurance companies are smart & cynical (despite all the smiling & happy advertisements) and they want to collect their profits first before facing insurance claims later down the road.

    2. Hi Starlight,

      I believe the insurers are playing wait and see. There is little advantage to be the first mover in such a slow moving industry. It would be easier to come in slightly later with a slightly better offer if this new pricing structure is really what the market wants.

      The insurers wouldn't just implement NCD without any revenue boosting strategy. NCD will reduce their total revenue for no good reason, so it has to be offset by collecting more. Without any mechanism to increase premiums, no insurer would offer NCD just for the sake of it, because they don't have to.


      I've never come across that statistic, but it does make sense that most people spend the most on healthcare in their final years. Prudential has it sort of right, but they are way off mark. Their NCD/premium increase ratio just doesn't make sense. I wouldn't take up such a policy with that kind of pricing structure.


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