Ask Melanie

Back-up medical plan a popular choice

Melanie Nutbeam, a certified financial planner based in Hong Kong, addresses common personal finance queries. Send your questions to [email protected]

PUBLISHED : Monday, 22 July, 2013, 12:00am
UPDATED : Monday, 22 July, 2013, 2:16am

I'm 45 and my annual health checks are great with no hint of the heart problems that killed my Dad and his Dad. My wife is 47 and in good health but smokes. My employer provides generous medical benefits for the family. I love my job and have no plans to move but my industry is fickle. Should I look for some sort of back-up cover?

The chance of a 45-year-old male, even without possible congenital heart issues, suffering heart attack, cancer or stroke before age 65 is nearly 30 per cent. The chance of a 47-year-old female, let alone one that smokes, suffering heart attack, cancer or stroke before age 65 is nearly 25 per cent. You're right to be concerned.

Apart from premiums increasing with age, if either of you suffer a medical setback, this will make future cover difficult, or impossible, and certainly more expensive.

The key is to lock in your current health status now so you are not excluded from cover later if your health deteriorates.

Some group health programmes ask you to complete a declaration when joining that allows access to an individual plan later on the basis of your health at the start. Check if this was offered when you joined your employer's group scheme.

Secondly, astute employers sometimes negotiate for their scheme provider to immediately offer medical cover to departing employees without new underwriting conditions. That's a win-win for everyone. Check if your scheme includes this.

Clive Wolstencroft at Navigator Insurance brokerage says American employees of United States-based firms in Hong Kong must offer group rate cover for employees who leave a firm involuntarily, or for spouses of employees if legally separating or divorcing them. The individual usually pays the full premium but the group discount is worthwhile. The cover is for 18 months, extended to 36 months if a medical condition crops up after leaving the job.

The third and most common option is to arrange supplementary medical benefits cover alongside your employer scheme. This can be expensive but premiums can be cut if you agree to pay a minimum initial cost when getting medical treatment. This is known as a deductible. Wolstencroft suggests a plan with a US$10,000 deductible that can be settled with claims from your employer cover. He says this is popular with bankers in Hong Kong.

Christian Moore at Pacific Prime brokerage favours a fourth option in which a supplemental plan is dormant while the work plan is running. The supplemental plan kicks in if a person loses his job or exceeds the coverage of his work insurance.

Check policies (including your employer's) to ensure annual claim limits look sufficient. You can upgrade a plan for as little as a 1 per cent premium increase. Check outpatient and medication coverage is reasonable given recurring checkups and medication can be expensive. Finally, check geographical exclusions as many policies automatically cancel when moving country.


The views presented are of a general nature. For specific advice, talk to a professional planner. See the column archive at