Should we start young to buy VHIS? At the early stage of their career, many youngsters who earn a modest income tend to ignore the need for hospital insurance with their company’s group insurance. Even though VHIS offers tax deductions, it seems that VHIS is not cost-effective for them overall. However, when considering the unknown pre-existing condition cover and extra premium loading for critical illnesses in the future, we should plan ahead and start young for VHIS.
Cigna Smart Health shares some tips with you on making full use of deductible options and group insurance to select the best-suitable VHIS plan for yourself.
What Are the Advantages of VHIS?
The Voluntary Health Insurance Scheme (VHIS) is designed to offer the public affordable and comprehensive insurance protection, so the VHIS-insured have an additional choice of using private healthcare services when in need.
VHIS covers insurance products that provide hospital insurance protection of indemnity nature bought by individuals for themselves and their families. In other words, VHIS compensates for the actual medical expenses of hospitalisation or day surgery. Non-hospital medical insurance protection (e.g. outpatient services), non-indemnity medical insurance protection (e.g. hospital cash, critical illness cash plans) and group insurance bought by employers for their employees are not covered in the scheme.
VHIS is also a tax-saving solution. Every insured person can enjoy up to $3,000 and $8,000 tax deduction under the Standard Plans and Flexi Plans respectively. For more details on how to calculate the tax deduction, you could read another article here.
Furthermore, VHIS covers unknown pre-existing conditions and congenital diseases. Click here to learn more about coverage and compensation.
What Are the Advantages of Buying VHIS Plans in Your 20s?
Many youngsters who are still earning a modest income at the early stage of their career tend not to consider buying any insurance products. However, VHIS is in fact a product that you could save more in the long run if you start early.
- Start Young to Save More with Affordable Premium
VHIS is particularly appealing to young adults who are starting out in their career. The plan offers an affordable premium, particularly when policyholders start young.
Taking the standard plan as an example, the average annual premium increases along with a policyholder’s age. The premium for a 20-year-old male is $1,980, but the premium rises to $3,138 at 40 years old and even $8,091 at the age of 60, which is more than a fourfold increase!
- Protect Yourself Against the Rise in Critical Illnesses Among Youngsters
The rise in the incidence of critical illnesses among youngsters was more prominent than ever in the globe. In recent years, a CUHK studysees the increasing global incidence of colorectal cancer among younger people, especially the cases aged between 20 and 50.
According to the Non-Communicable Diseases Watch issued by the Centre for Health Protection in Sep 2018, it is predicted that among every 1 000 persons aged 30–74, 106 persons may suffer from cardiovascular events (including coronary heart disease and stroke) over the next 10 years. Start young to enjoy lifelong protection, and no longer you’ll need to worry about future medical expenses.
- Smart Use of Deductible Options with Group Insurance
Many workers solely rely on the medical insurance provided by their employers without ever considering getting their own. Although group insurance also covers common medical fees (such as outpatient and hospitalisation), it may not be adequate to cover all medical expenses due to the coverage limit and high charges of private hospitals. With deductible options, you could settle the payments with your group insurance and VHIS to save money. You could see the example below for more details.
Assumption: A policyholder chooses a Flexi Plan with a deductible option of $75,000 and requires a hospitalised operation now.
| Total Surgical Expenses |
$150,000 |
| Annual Coverage Limit of Corporate Group Medical Insurance |
$100,000(Can be offset by the VHIS deductible option of $75,000) |
| Remaining Expenses Covered by VHIS Plan |
$50,000 |
| Amount Paid by Policyholder |
$0 |
From the example above, the policyholder opts for a higher deductible option together with the high coverage offered by his group medical insurance. As such, the premium is lower, and no extra expenses are needed when encountering medical emergencies.
How Much Medical Expenses Can You Save with VHIS?
To understand if VHIS is the best value for money, let’s look at the case of Peter, who just starts out in his career.
- Policyholder: Peter, Aged 25, Non-Smoker
- Annual Premium: $2,943 (Monthly Premium: $256)
- VHIS Plan：The Flexi Plan (Superior)
- Deductible Option：$75,000
Unfortunately, at the age of 27, Peter suffers from coronary heart diseases and requires immediate bypass surgery at a private hospital. The medical expenses incurred are as high as $250,000.
| Total Medical Expenses for Bypass Surgery |
$250,000 |
| Annual Coverage Limit of Corporate Group Medical Insurance |
$100,000(Can be offset by the VHIS deductible option of $75,000) |
| Remaining Expenses Covered by VHIS Plan |
$150,000 |
| Amount Paid by Policyholder |
$0 |
Assumed that Peter bought the VHIS Plan at the age of 25, the annual premium of the first two years is:
$2,943 + $3,019 = $5,962
This premium of $5,962 can save the medical expenses of $150,000 for him!
A few hundreds of monthly premiums can help you cope with substantial medical bills in the future. With affordable premiums, young adults should get VHIS to enjoy health protection when unforeseen conditions strike. Start young to enjoy lifelong protection with VHIS!
Cigna knows you deserve to be offered the easiest choice and has launched a new series of Voluntary Health Insurance Flexi Plans , aiming to deliver the best combination of price, coverage and value-added services. You can rest assured that you can anticipate and afford every dollar of your medical expenses, making our voluntary health insurance plans the smartest choice. Not only our plan is tax-deductible, but its 5 deductible options ranging from HK$0 to HK$75,000 also enable your premium to deliver more bang for the buck! Click here to learn more.
^Premium is calculated based on a non-smoker aged 25, selecting a $75,000 deductible option.
Note: The above premium of the Cigna VHIS Series is effective from 15 March 2021.
Sources:
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