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• Disability Income Insurance  - It provides that the cover will automatically 
terminate, when the person is not working owing to illness or termination of 
service.

39
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Termination of cover • When the insured person dies;
• When the policy owner fails to pay the renewal premium at the end of the grace 
period;
• When the total amount of claims paid by the insurer has reached the limit of 
indemnity; or
• When the insured person reaches the specified maximum age during which the 
insurer is not willing to offer cover.
Cover abroad Applicable only to the covered charges incurred in the “Country” as specified in the 
policy schedule. It is also applicable under the following circumstances:
• The insured person, travelling abroad for a reason other than for medical 
treatment, needs to be confined to a hospital outside the “Country” as a 
consequence of a medical emergency occurring within 90 days of leaving the 
“Country”; or
• The insured person, upon recommendation of a physician and with the prior 
written approval of the chief medical officer of the insurer, has to be transferred 
to a hospital outside the “Country” because the specialised nature of the 
treatment, aid, information or decision required can neither be rendered, nor 
furnished, nor taken, in that “Country”.
Renewal The Renewal Provision describes:
• Circumstances under which the insurer has the right to refuse to renew or the 
right to cancel the coverage; and
• Insurer’s right to increase the amount of premium payable on the policy
Mis-statement of age or 
gender• Provision specifies that, in the case of an insured person mis-stating his age 
or gender, the insurer will adjust the premium based on his correct age and 
gender. 
• Any excess premium paid will be refunded by the insurer, and any shortfall in 
premium will have to be made up by the policy owner.
Grace period • Allows the policy owner to pay a renewal premium, within a stated grace period, 
following the premium due date.
Reinstatement • If certain conditions are met, the insurer will reinstate a policy that has lapsed 
for non-payment of premiums. The policy owner must pay any overdue 
premium (with or without interest as determined by the insurer) and the 
insured person must complete a reinstatement application/health warranty.
Incontestability • The Incontestability provision makes Life Insurance policies indisputable after 
they have been in force for a certain minimum period (usually one year), with 
the exception of fraud.
Change of occupation • A Change Of Occupation provision that permits the insurer to adjust the 
premium rate or the amount of benefits payable under the policy if the insured 
person changes occupation.
Co-ordination of benefits • This provision states that the benefits payable under the policy will be reduced 
if the insured person is eligible for reimbursement from other sources.
Cancellation • A provision that allows the policy owner to cancel the policy by giving written 
notice to the insurer within a certain period of time (e.g. seven days).
Change of plan • A provision to allow the insured person to upgrade or downgrade the coverage 
plan. Any upgrading of plan is subject to satisfactory evidence of insurability at 
the policy owner’s expense.
Currency • Where payment of claims is on reimbursement basis, the policy will state the 
currency for the benefits payable.
• Generally, payment of all claims and benefits will be made in Singapore 
currency.
Last payer status • Appears in the MediShield Life and Private Integrated Shield Plans.
• If the insured person has any other Medical Insurance, including medical 
benefits (such as from Work Injury Compensation Insurance) under any 
employment contract, which makes provision for reimbursement of medical 
expenses, the insurer shall be the last payer reimbursing the claim.

40
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Nomination of 
beneficiariesThe insured who is the policyowner can make a nomination as long as he has 
attained the age of 18 years. Two options of nomination as briefly described below 
are available:
• Trust or Irrevocable Nomination (Section 132 of the Act) – The insured loses 
all rights to the ownership of the policy. To revoke this trust nomination, the 
insured needs the written consent of all the nominees.
• Revocable Nomination (Section 133 of the Act) – The insured retains the 
ownership of the policy and is free to change, add or remove nominees, without 
their consent.
Policy Owners’ Protection 
Scheme• Policy Owners’ Protection Scheme (PPF Scheme) has been set up to protect the 
policy owners in the event of failure of a life or general insurer which is a PPF 
Scheme member.
• The PPF Scheme is administered by the Singapore Deposit Insurance 
Corporation (SDIC).


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• The PPF Scheme is administered by the Singapore Deposit Insurance 
Corporation (SDIC). Coverage under the PPF Scheme is automatic, and no 
further action is required from the policy owners.
Various bases upon which Health Insurance policies can be issued
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Cancellable • The Renewal Provision included in a cancellable policy (e.g. some Medical 
Expense Insurance policies) grants the insurer the right to terminate the policy 
at any time, for any reason, simply by notifying the policy owner in writing that 
the policy is cancelled, and by refunding any advance premium that has been 
paid for the policy.
Optionally renewable • The insurer has the right to refuse to renew an optionally renewable policy on 
certain dates as specified in the policy, usually either on the policy anniversary 
date or on any premium due date.
• The insurer is also allowed to increase its premium rate and to add coverage 
limitations, such as eliminating coverage for injuries to certain parts of the body, 
or limiting the extent of coverage for certain occurrences.
Conditionally renewable • The insurer may elect not to renew only under conditions as specified in the 
policy.
• These conditions cannot be related to the insured person’s health.
Guaranteed renewable In some policies, the insurer relinquishes the rights to cancel the policy at any time, 
as well as to refuse renewal at a premium due date. This type of policy is said to be 
guaranteed renewable, and it includes several important features, such as:
• Renewal is guaranteed, as long as the policy owner pays the premium;
• The insurer may not cancel the policy, unless the policy owner fails to pay the 
premium;
• Premiums may be increased on the basis of an entire classification, such as 
occupation or sub-plan; and
• Guaranteed policy renewal until the specified age, such as 60, 65, 70 or 75 years, 
depending on the insurer’s policy.
Non-renewable In some situations, an individual may need Health Insurance for a fixed, limited 
period of time. When it expires, the insured person must purchase another policy.

41
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Common exclusions 
that are found in Health 
Insurance policiesSurgical Procedures Or Examinations
• Routine physical, pre-employment or premarital examination, immunisation or 
circumcision;
• Refraction, eye glasses or contact lenses, including fittings and examinations, 
or surgical correction of near-sightedness (such as, but not limited to, radial 
keratotomy and keratectomy);
• Examination, treatment or surgery of the teeth, gums or direct supporting 
structure, except as necessitated by an injury to sound natural teeth occurring 
while the cover for the insured person under this contract is in force;
• Aesthetic or cosmetic surgery, except for charges for treatment resulting 
from an injury which occurs while the cover for the insured person under the 
contract is in force. Such treatment must take place within 12 months of the 
injury, and while the cover for the insured person under this contract is in force;
• Pregnancy, childbirth (including surgical delivery), abortion or miscarriage 
(except as a result of an injury) and pre-natal or post-natal care;
• Prosthesis, corrective devices or medical appliances which are not medically 
necessary;
• Donation of any body organ by the insured person; and
• Gender changes.
Common exclusions 
that are found in Health 
Insurance policiesTreatments
• Test or treatment related to impotence, infertility, contraception or sterilisation;
• Treatment owing to birth defect, hereditary or congenital condition;
• Treatment of any diagnosed emotional, mental or nervous disability, including 
any condition caused by or resulting from such disability;
• Treatment which is in any way related to sexually transmitted disease, 
Acquired Immune Deficiency Syndrome (AIDS), or any infection from a human 
immunodeficiency virus (HIV), as well as their related complications;
• Treatment resulting from suicide, attempted suicide, self-inflicted injury, 
narcotic or alcohol abuse, or participation in hazardous pursuit;
• Treatment of a disability that results from participation in any assault, criminal 
or unlawful act, strike, civil disorder or riot;
• Treatment directly or indirectly associated with invasion, act of foreign 
enemy, hostility or any act of war, whether or not declared, civil war, rebellion, 
revolution, insurrection or military or usurped power, or full-time service in any 
of the armed forces, except for peacetime reservist training or mobilisation 
exercise in accordance with the Enlistment Act 1970;
• Treatment of a disability resulting from the use of nuclear weapon or from 
contact with nuclear material;
• Treatment of morbid obesity or related conditions; and
• Treatment arising from the insured person’s failure to act on proper medical 
advice.


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Confinement
• Services, supplies or confinement days, which are not medically necessary;
• Period of confinement resulting from a disability not requiring surgery, unless 
the period of confinement is more than a specified period of time (e.g.12 or 18 
hours); and
• Convalescent care, rest care, hospice care, rehabilitation or similar treatment.
Other Services
• Service performed by a person who ordinarily resides in the insured person’s 
home or is a close relative;
• Transportation, other than ambulance transfer in the event of a medical 
emergency; and
• Ancillary expenses, such as (but not limited to) television, telephone, video, 
newspaper and family accommodation charges.

42
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Notification of claim 
conditionA typical Health Insurance policy includes provisions that define the insured’s 
obligation to provide timely notification of loss to the insurer.
Physical examination 
provisionAfter the policy owner submits a claim, the insurer has the right to have the insured 
person examined by a doctor of the insurer’s choice, at the insurer’s expense.
Mediation/arbitration and 
legal actions provisionAn individual Health Insurance policy will usually include a Dispute Resolution 
Clause.
• Referred to the Financial Industry Disputes Resolution Centre Ltd (FIDReC) to be 
dealt with accordingly. The policy owner should refer such dispute or matter to 
FIDReC within six months from the date of failure to reach an agreement with 
the insurer.
• If the dispute cannot be referred to or dealt with by FIDReC, the dispute will 
be referred to and decided using arbitration. This will be according to the 
Arbitration Rules of the Singapore International Arbitration Centre applicable at 
that point of time.
• Where both mediation and arbitration fail to settle the dispute, the policy owner 
may seek legal action against the insurer.
Endorsement A separate document that modifies the policy to which it is attached.
• To amend or include additional terms to the policy
• Serve as supplementary agreements that provide optional benefits not 
previously contained in the basic policy.
• Exclusions to restrict the scope of coverage.


Health Insurance  
246 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  CHAPTER 1 1 
HEALTH INSURANCE PRICING  
CHAPTER OUTLINE  
1. Introduction
2. Key Factors Used In Premium Computation
3. Parameters For Premium Rating
LEARNING OUTCOMES  
After studying this chapter, you should be able to:  
▪explain the key factors used in the premium computation:
-morbidity experience
-investment income
-operating expenses
-medical inflation
-scope of benefits covered
-insurer’s profit
-modes of premium payment
-extent of underwriting
▪know the parameters for premium rating:
-age
-gender
-physical condition
-occupation
-persistency
-claims experience
-group participation level

11. Health Insurance Pricing  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   247  
Contents  
CHAPTER OUTLINE  ................................ ................................ ................................ .........  246 
LEARNING OUTCOMES  ................................ ................................ ................................ .. 246 
1. INTRODUCTIO N ................................ ................................ ................................ ..... 248 
2. KEY FACTORS USED IN PREMIUM COMPUTATION  ................................ ...........  248 
A. Morbidity Experience  ................................ ................................ ......................  248 
B. Investment Income  ................................ ................................ ..........................  248 
C. Operating  Expenses  ................................ ................................ ........................  249 
D. Medical Inflation  ................................ ................................ ..............................  249 
E. Scope Of Benefits Covered  ................................ ................................ .............  249 
F. Insurer’s Profit  ................................ ................................ ................................ . 250 
G. Modes Of Premium Payment  ................................ ................................ .........  250 
H. Extent Of Underwriting  ................................ ................................ ...................  251 
3. PARAMETERS FOR PREMIUM RATING  ................................ ................................  251 
A. Age ................................ ................................ ................................ ...................  251 
B. Gender  ................................ ................................ ................................ .............  251 
C. Health Status  ................................ ................................ ................................ ... 251 
D. Lifestyle  ................................ ................................ ................................ ............  252 
E. Occupation  ................................ ................................ ................................ ....... 252 
F. Persistency  ................................ ................................ ................................ ....... 253 
G. Claims Experien ce ................................ ................................ ...........................  253 
H. Group Participation Level  ................................ ................................ ...............  253 
 
 


Health Insurance  
248 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 1. INTRODUCTION
1.1 This chapter discusses the factors used in the premium computation for the
Health Insurance products, the premium system and the various forms of
premium payment modes.


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4] 1. INTRODUCTION
1.1 This chapter discusses the factors used in the premium computation for the
Health Insurance products, the premium system and the various forms of
premium payment modes. It also summarises the parameters on which the
premium rates for the Individual and Group Health Insurance policies are based.
2. KEY FACTORS USED IN PREMIUM COMPUTATION
2.1 It is important for you to get an idea of how insurers set prices for their
insurance products. If you understand the key factors used in the computing
premiums, you will have a better understanding of the Health Insurance
products themselves.
2.2 The key fac tors used to calculate Health Insurance premiums are:
▪morbidity experience;
▪investment income;
▪operating expenses;
▪medical inflation;
▪scope of benefits covered;
▪insurer’s profit;
▪modes of premium payment; and
▪extent of underwriting.
A. Morbidity Experience
2.3 Morbidity experience or morbidity rate means the actual number of  illness ,
injury, or failure of health cases occurring in a given group of people. In Health
Insurance, the primary consideration in pricing insurance coverage is the
morbidity e xperience (i.e. morbidity rate), although death experience is taken
into consideration , where death benefit is available. For the purpose of
computing premiums easily, the insurers make use of morbidity tables. A
morbidity table is a table that shows the r ates of  illness , injury, or failure of
health (i.e. morbidity rates) occurring among the given groups of people
categorised by age.  All things being equal, the morbidity rate of women is
higher than men. That is why women pay higher premium rates than men for
most Health Insurance policies.
B. Investment Income
2.4 The second key factor that affects pricing is investment income. Simply,
investment income is the money that is earned , when an insurer invests the
premiums which it receives from many insured s (po licyowners  or
policyholders ).

11. Health Insurance Pricing  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   249  
2.5 As you know, premiums are the main source of money for paying out claims 
on the different types of medical benefits (or even death benefits for those 
policies that include both medical and death coverage).  However, not all of the 
premiums that an insurer receives each year are needed to pay benefits in that 
year. Some insureds live for many years and pay premiums to keep their 
policies in force throughout those years. These premiums are not left idle. 
Insure rs invest these premium dollars to earn more money. As such, 
investment income can be looked upon as an additional source of funds for the 
insurer to meet its obligations.  
 
2.6 Investment  income  also help s to reduce the amount of money that insurers 
have to c harge for their insurance. Based on market conditions, if the insurer s 
expect to earn greater investment income, the premiums that they charge will 
likely be lower.  
 
C. Operating Expenses  
 
2.7 A third facto r, expenses, increases the price of insurance. It is not sufficient for 
insurers  to collect enough premiums to just cover the cost s of insurance. They 
must also collect enough money , to pay for the costs of operating the company, 
such as staff salaries, commissions  for sellers , taxes, office rent, advertising, 
computer systems, supplies, etc.  All of these expenses are necessary to run an 
insurance company and must be added to the cost s of insurance. Otherwise, 
the insurers  will not be able to operate.  
 
D. Medical Inflation  
 
2.8 Over the years, there has been a consistent upward trend in medical care claim 
costs experienced by both individual and group plans. These rising costs of 
claims are associated with increases in medical care charges and higher 
utilisation of services , especially when there is a growing ageing population  in 
Singapore .  
 
2.9 To ensure that the  insurers  can meet their obligations, they also take into 
account the medical inf lation factor . Otherwise, the premiums charged will not 
be adequate to cover the rising medical costs.  
 
E. Scope Of Benefits Covered  
 
2.10 In a competitive insurance market, insurers  attempt to attract more insured  
person s and retain them for a long time through activities , such as  effective 
customer  promotion, innovative product design, efficient distribution channels, 
good before -sales and after -sales service, etc.


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2.11 Providing several types of benefits under one policy is another way of 
producing a product that is appealing to customers. However, this strategy 
comes with a price – additions of each benefit actually increase the final 
premium that the insurer charges.  
 
 
 
Indivi

Health Insurance   
 
250 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 2.12 The effect of differences in benefit s can be explained using a Hospital & Surgical 
(H&S) Insurance policy.  Generally, some of the mo st common types of benefits 
covered under a H&S Insurance policy are:  
▪ Hospital Expense Benefits;  
▪ Surgical Expense Benefits;  
▪ Outpatient Medical Expense Benefits; and  
▪ Other Medical Expense & Auxiliary Benefits.  
 
2.13 H&S Insurance policies may provide very limit ed cover  and only one or two 
types of benefits , such as hospital or surgical expenses only. Other policies may 
be more broadly written to cover virtually all medical expenses resulting from 
accident or  sickness , with only some specific exceptions.  Insurers often offer a 
few types of plans under a H&S Insurance policy , and each type of plan has its 
own benefit limits, deductible and co -insurance features. Policies with higher 
benefit limits, smaller deductible ; and smaller co -insurance will be more 
expensive.   
 
2.14 In Singapore, the most common type of H&S Insurance policies is the Integrated 
Shield Plans that are paid using Medisave savings (as discussed in Chapter 8  of 
this Study Guide ). The benefits that are offered by the insurers are very similar . 
All of them offer an assortment of plans to cater for different needs , with a 
choice of ward class  that the insured prefers. Naturally, those who prefer to stay 
in Private Hospitals w ill buy a plan that is more expensive than one that caters 
for only Class A (Public Hospitals) and below.  
 
F. Insurer’s Profit  
 
2.15 Insurers enter the market with the primary objective to profit from the business. 
When pricing a product,  insurers include a loading in the net premium to 
provide a profit margin. This loading depends  on the insurer’s  profit target and 
strategy , as well as the nature of the business. For example, an insurer who is 
going for market share may settle for a thinn er profit margin. On the other hand, 
a line of business that is volatile or requires more capital support will result in 
an increase in the amount of loading.  
 
G. Modes Of Premium Payment  
 
2.16 This means  the frequency with which the premiums are pa yable . Payments may 
be made:  
▪ annually – once a year;  
▪ bi-annually – twice a year;  
▪ quarterly – once every three months; or  
▪ monthly – once a month.  
 
2.17 Insurers generally calculate premiums on an annual basis.  If the insured wants 
to pay any of the other modes, the premium increases slightly as the frequency 
increases.  The increases allow the insurer to recoup:  
Mode of Payment = 
Frequency of 
Premium Payment  
Annual, Bi-annual, 
Quarterly or 
Monthly  

11.Health Insurance Pricing
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  251 ▪the additional billing and handling costs;  and
▪the lost interest that the insurer could have earned , by having the full annual
premium to invest all at once.
2.18 Thus, a monthly premium is slightly higher than a sixth of a semi -annual 
premium; and a semi -annual premium that is slightly higher than half of an 
annual premium.  
H. Exten t Of Underwriting
2.19 The time and effort required to gather medical declaration from the insured
person at the point of policy application can be lengthy. Some insurers choose
to do minimal risk assessment , by reducing the  number of health declarations
on the proposal form. To do so, insurers will charge a higher premium.
3. PARAMETERS FOR PREMIUM RATING
3.1 After covering the seven key determinants that insurers use in computing
premiums, let us now look at the parameters pertaining to a particular
individual or a group by age, gender, health status , lifestyle, occupation, claims
experience, moral hazard, etc., and see how each of them has an effect on the
level of premiums to be charged.
A. Age
3.2 Age is a key parameter in arriving at the premium rates , regardless of whether
it is an individual or group plan.  Among different age groups, there are
differences in claim frequ ency and claim severity.


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Among different age groups, there are
differences in claim frequ ency and claim severity.  For example, a  50-year-old
person is more likely to experience a long illness  or need a longer recovery
period  than a 30 -year-old person.
B. Gender
3.3 Gender is also an important factor in developing the premium rates for group
and individual products.  Statistics shows that women  in general made more
medical claims  than men.  That is why a female pay s a higher premium for
Medical Insurance  as compared to a male of the same age.
C. Health Status
3.4 The health status of the proposed insured  person  is a major consideration in
the policy pricing. An individual with a pre -existing medical condition can
expect his proposal to attract special underwriting terms a nd conditions , or
even declined.
ME
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Health Insurance   
 
252 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] D. Lifestyle  
 
3.5 The lifestyle of the proposed insured can also influence the premium charge. 
Participation in a hazardous sport which exposes him to a hi gher risk of injuries  
(e.g. recreational flying, mountaineering or scuba -diving) will require  extra 
premiums. The alternative by the insurer is to exclude injuries sustained in 
specified activities from the insurance coverage.    
 
3.6 The most important lifestyle factor for determi ning premium rate is smoking. 
For example, a  proposed insured who is a non -smoker is usually at less risk, 
and can expect to pay a lower premium for insurance than a person who 
smokes.  
 
E. Occupation  
 
3.7 A proposed insured’s occupation can have a strong influence on the risk that he 
presents. Some occupation has o ccupational risk or hazard . This means that he 
has a higher chance of an injury or illnes s by reason of the duties of a specific 
occupation.  
 
3.8 Based on an analysis of information compiled over the years, insurers  have 
grouped various occupations into classes with basically the same degree of 
accident or illness hazard.  This permits a fair means to establish premium rates 
based upon occupational hazard. For example, a high -rise construction worker 
could be more likely to suffer an injury by reason of occupation than would a n 
office administrator .  
 
 
 
 
 
 
 
 
3.9 Many insurers i ssue manuals to their insurance representatives  on which 
occupational classifications are listed. The insurer s cannot list every possible 
occupation, but most jobs have been broadly classified.   
 
3.10 As you would expect, the higher the risk of injury or illness resulting from an 
occupation, the higher the insurance premium is likely to be.  
 
  

11.Health Insurance Pricing
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  253 F. Persistency
3.11 Persistency, which refers to the percentage of policies renewed each year, is a
parameter in pricing both Individual and Group  Health Insurance.  Persisten cy
usually improves as the policies age.  For some types of coverage, the annual
persistency rate may reach 95% or higher by the fifth policy year.
3.12 Persistency also varies by age groups. A group of younger insureds (e.g. ages
of 20 to 29  years ) may have poorer persistency than a group of older insureds
(e.g. ages of 50 to 59  years ). The older insureds will tend to see the  policy as
more valuable , because they may have more difficulty satisfying the
underwriting  requirements  associated with buyi ng a new policy.
3.13 If the persistency rate of a type of coverage is expected to be high, then the
insurer will reduce the amount of premium charged.
G. Claims Experience
3.14 Claims experience of the portfolio or population is important when pr icing
Health Insurance. An a ctuary has to ensure that, above all other expenses, the
premium s must be sufficient to pay expected claims. For group plans, claims
experience of the group is a key factor affecting the premium rate charged. For
example, for gr oup outpatient plans, claims experience demonstrates the
general health condition of the group and the propensity of the group  members
to file claims. The importance of the claims experience data in pricing increases
as the group size gets bigger , and more years of data are
available.
H. Group Participation Level  
3.15 For voluntary group plans, the extent of participation by
employees in the plan is an important parameter in the
development of premium rates.


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H. Group Participation Level  
3.15 For voluntary group plans, the extent of participation by
employees in the plan is an important parameter in the
development of premium rates.  If the participation is low, there will be a greater
chance that a higher than normal proportion of unhealthy lives will seek
coverage. This is called adverse selection or anti -selection. If the participation
level is high, there will likely be more healthy lives to compensate for anti -
selection. T hus, many insurers vary premium rates based on the participation
level.
CLAIM  
FORMS

43
HEALTH INSURANCE PRICING
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Morbidity experience Morbidity experience or morbidity rate means the actual number of illness, injury, 
or failure of health cases occurring in a given group of people.
Investment income Investment income is the money that is earned, when an insurer invests the 
premiums which it receives from many insureds (policyowners or policyholders).
Operating expenses Expenses increases the price of insurance. It is not sufficient for insurers to collect 
enough premiums to just cover the costs of insurance. They must also collect 
enough money, to pay for the costs of operating the company, such as staff salaries, 
commissions for sellers, taxes, office rent, advertising, computer systems, supplies, 
etc.
Medical inflation • Consistent upward trend in medical care claim costs experienced by both 
individual and group plans. 
• Rising costs of claims are associated with increases in medical care charges and 
higher utilisation of services.
Scope of benefits covered Providing several types of benefits under one policy is another way of producing a 
product that is appealing to customers. However, this strategy comes with a price 
– additions of each benefit actually increase the final premium that the insurer 
charges.
Insurer’s profit Insurers enter the market with the primary objective to profit from the business. 
When pricing a product, insurers include a loading in the net premium to provide a 
profit margin.
Modes of premium 
paymentFrequency with which the premiums are payable.
• Annually – once a year;
• Bi-annually – twice a year;
• Quarterly – once every three months; or
• Monthly – once a month.
Extent of underwriting Time and effort required to gather medical declaration from the insured person at 
the point of policy application.
Parameters for premium 
rating• Age.
• Gender.
• Health status.
• Lifestyle.
• Occupation.
• Persistency.
• Claims experience.
• Group participation level.CHAPTER
11

Health Insurance   
254 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  
      CHAPTER 12  
HEALTH INSURANCE UNDERWRITING  
 
 
 
CHAPTER OUTLINE  
 
1. Introduction  
2. What Is Underwriting?  
3. Underwriting Factors That Affect The Risk  
4. Sources Of Underwriting Information  
5. How An Insurance Representative Can Help In The Underwriting Process  
6. Final Underwriting Decision  
7. Commencement Of Risk  
8. Conclusion  
Appendix 12A – Sample Supplementary Lifestyle Questionnaire  
Appendix 12B – Sample Individual Hospital & Surgical Insurance Proposal Form  
Appendix 12C – Sample Group Hospital & Surgical Insurance Proposal And Health 
Declaration Form  
 
 
LEARNING OUTCOMES  
 
After studying this chapter, you should be able to:  
▪ explain what underwriting  is 
▪ explain the underwriting factors that affect a risk:  
- medical factors  
- non-medical factors  
▪ know the underwriting factors that are specifically important for each type of Health 
Insurance  
▪ know the types of underwriting methods for Medical Expense Insurance  
▪ know the various underwriting factors for Group Insuran ce 
▪ identify the sources of underwriting information  
▪ know how an insurance representative  can help in the underwriting process  
▪ understand the various terms of acceptance for Health Insurance proposal s 
▪ know when the risk commences  
 
 
 
 
 

12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   255  
Contents  
CHAPTER OUTLINE  ................................ ................................ ................................ .........  254 
LEARNING OUTCOMES  ................................ ................................ ................................ .. 254 
1. INTRODUCTION  ................................ ................................ ................................ ..... 257 
2. WHAT IS UNDERWRITING?  ................................ ................................ ...................  257 
3. UNDER WRITING FACTORS THAT AFFECT THE RISK  ................................ ..........  257 
A. Medical Factors  ................................ ................................ ................................ . 257 
A1. Medical History  ................................ ................................ ..........................  257 
A2. Current Physical Conditions  ................................ ................................ ...... 258 
B. Non-medical Aspects Of Underwriting  ................................ ............................  258 
B1.


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Medical History  ................................ ................................ ..........................  257 
A2. Current Physical Conditions  ................................ ................................ ...... 258 
B. Non-medical Aspects Of Underwriting  ................................ ............................  258 
B1. Financial Factor  ................................ ................................ ..........................  258 
B2. Occupational Factor  ................................ ................................ ...................  259 
B3. Age Factor  ................................ ................................ ................................ .. 259 
B4. Residency Factor  ................................ ................................ ........................  259 
B5. Additional Underwriting Considerations  ................................ ..................  259 
C. Factors That Are Specifically Important For Each Type Of Health Insurance  260 
C1. Medical Expense Insurance  ................................ ................................ ....... 260 
C2. Disability Income Insurance  ................................ ................................ ...... 260 
C3. Long -Term Care Insurance  ................................ ................................ ........  261 
C4. Critical Illness Insurance  ................................ ................................ ............  261 
C5. Managed Healthcare  ................................ ................................ ..................  261 
D. Types Of Underwriting Methods For Health Insurance  ................................ .. 261 
D1. Full Medical Underwriting  ................................ ................................ .........  262 
D2. Moratorium Underwriting (Used for Medical Expense Insurance)  .........  262 
D3. Simplified Issuance Offer (SIO)  ................................ ................................ . 263 
D4. Guaranteed Issuance Offer (GIO)  ................................ ..............................  264 
E. Group Underwriting  ................................ ................................ ..........................  264 
E1. Reason For Existence  ................................ ................................ ................  264 
E2. Group Stability  ................................ ................................ ...........................  264 
E3. Group Size  ................................ ................................ ................................ .. 265 
E4. Insured Company‘s Nature Of Business  ................................ ...................  265 
E5. Employee Classes  ................................ ................................ ......................  265 
E6. Level Of Participation  ................................ ................................ ................  265 
E7. Age & Gender Within The Group  ................................ ..............................  265 
E8. Expected Persistency  ................................ ................................ .................  266 
E9. Past Claims Experience  ................................ ................................ .............  266 
E10. Medical Inflation  ................................ ................................ .......................  267 


Health Insurance   
256 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] E11. Medical Utilisation Rate & Trend  ................................ .............................  267 
4. SOURCES OF UNDERWRITING INFORMATION  ................................ ..................  267 
A. Proposal Form  ................................ ................................ ................................ ... 267 
A1. Sections Of A Proposal Form  ................................ ................................ .... 268 
B. The Agent’s Statement  ................................ ................................ .....................  269 
C. Medical Examinations/Tests  ................................ ................................ .............  269 
D. Attending Physician’s Statement (APS)  ................................ ...........................  270 
E. Supplementary Questionnaires  ................................ ................................ ....... 270 
5. HOW AN INSURANCE REPRESENTATIVE CAN HELP IN THE UNDERWRITING 
PROCESS  ................................ ................................ ................................ ................  270 
6. FINAL UNDERWRITING DECISION  ................................ ................................ ....... 271 
A. Standard Risks  ................................ ................................ ................................ .. 271 
B. Sub-standard Risks  ................................ ................................ ...........................  271 
B1. Modifications Of Cover  ................................ ................................ ..............  271 
B2. Postponement  ................................ ................................ ............................  272 
B3. Decline  ................................ ................................ ................................ ........  273 
7. COMMENCEMENT OF RISK  ................................ ................................ ..................  273 
8. CONCLUSION  ................................ ................................ ................................ .........  273 
APPENDIX 12A  ................................ ................................ ................................ ................  274 
APPENDIX 12B  ................................ ................................ ................................ ................  275 
APPENDIX 12C  ................................ ................................ ................................ ................  278 
 


12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   257  
1. INTRODUCTION  
 
1.1 In this chapter, we will discuss the factors that underwriters look at  when 
underwriting Health Insurance proposal s on individual and group bas es. We 
will also look at the various terms of acceptance that underwriters may impose 
on Health Insurance proposal s. Let us begin by looking at what underwriting  is 
all about . 
 
 
2. WHAT IS UNDERWRITING?  
 
2.1 Underwriting is the process , where by an insurer assesses the risk and 
determines whether or not to accept an application  and, if so, on what terms 
that it will offer coverage to the applicant or proposer .


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The main purpose of 
underwriting is to ensure that the premiums charged correspond closely with 
the risk that each proposer  represents. While Life Insurance underwriting is 
concerned primarily with mortality (i.e. the incidence of death within a given 
population), Health Insurance underwriting is concerned primarily with 
morbidity which is the incidence  of injury, illness or failure of health.   
 
 
3. UNDERWRITING FACTORS THAT AFFECT THE RIS K 
 
3.1 The factors that affect a risk can be broadly classified as:  
▪ medical; and   
▪ non-medical  
 
3.2 Let us begin by looking at the medical aspects of underwriting  of a Health 
Insurance proposal, assuming that the proposer and the person/life to be 
insured (also known as the proposed insured in market practice) are the same 
person  indicated in the proposal submission to the insurer . 
 
A. Medical Factors  
 
3.3 This requires a review of both the medical history and current physical 
condition s of the  proposer , to determine on what basis coverage can be offered. 
Underwriters evaluate risk s by considering the probable influence of current 
impairments and previous medical histories on future claims. For example, 
signs of cognitive (psychological ) impairments indicate that the proposer  is a 
poor or uninsurable risk for Long -Term Care Insurance.  
  
A1. Medical History  
 
3.4 The proposal  form asked questions on the medical history of the proposer . 
Underwriter may require more information on the declared medical conditions.  
For example, if the proposer states that he is receiving treatment for high blood 
pressure, an attending physician’s statement will be required  for policies , such 
as Critical Illness  Insurance  and Disability Income  Insurance , etc. In addition to 
obtaining general medical information, the underwriter will ask the attending 
physician about blood pressure readings, medication prescribed , and the 
  
  

Health Insurance   
258 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] degree of control achieved. If a physical examination was not required before, 
the underwriter could now ask for one to get current blood pressure re adings.  
 
3.5 Insurers review histories of previous conditions to determine 
the: 
▪ possibility of recurrence;  
▪ effect of a medical history on the proposer ’s general health;  
▪ complications likely to develop at a later date;  and/or  
▪ normal progression of any impairment.  
 
3.6 Disabilities resulting from diseases of, say, the digestive system may also be 
more frequent or prolonged than will be anticipated without such a history.  
  
3.7 Many  acute disorders can be disregarded if recovery has been prompt and 
complete , and without evidence of any residual impairment. Examples include 
simple bone fractures or an appendectomy.  
 
3.8 Latent complications, or the deterioration of an existing impairment are 
possible with many conditions. For example, overweight and elevated blood 
pressure, while normally not disabling in themselves, are considered indicators 
of a higher future incidence of cardiovascular impairment.  
 
A2. Current Physical Condit ions 
 
3.9 The proposer ’s statements on a proposal  form and medical examination results 
are the first indicators of present physical condition s. Additional tests and 
studies, e.g.  urinalysis, blood studies, cognitive assessments and 
electrocardiograms  (ECGs) , may be required, depending on the  age of the 
proposer and the amount of insurance coverage applied for.  
 
B. Non-medical Aspects Of Underwriting  
 
3.10 Non-medical factors can also have varying effects on the different classes of 
Health Insurance , as can be seen in the sections  mentioned below :  
 
B1. Financial Factor  
 
3.11 The proposer ’s financial situation (i.e. income, assets and debts) is not a key 
consideration in underwriting most types of Health Insurance policies. In 
considering an application, this information allows an underwriter to gauge if 
the proposer has the ability to continue paying for the premium and keeping 
the policy throughout the t erm.  
 
3.12 Financial information is  important in underwriting individual Disability Income 
Insurance. This is because the underwriter must ensure that the  benefit amount  
applied for is reasonable and not higher than 75% of his current income.   
 
  
 
 

12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   259  
3.13 To determine whether the benefit (for Disability Income Insurance) is justifiable, 
the underwriter must consider the proposer ’s income, both earned and 
unearned ( e.g.


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4]                                   259  
3.13 To determine whether the benefit (for Disability Income Insurance) is justifiable, 
the underwriter must consider the proposer ’s income, both earned and 
unearned ( e.g. from investments). He must also take into account the 
proposer ’s net worth. A high net wo rth is significant , even if the proposer ’s 
assets are not producing substantial investment income at the time of 
underwriting. Assets can be shifted to income generating investments if the 
insured becomes disabled , and the resulting income combined with disability 
insurance benefits can lessen the insured’s incentive to return to work.  
 
B2. Occupational Factor  
 
3.14 The proposer ’s occupation can have a strong influence on the risk that he 
presents. Occupational hazards fall into the following two main categories:  
▪ accident hazards;  and 
▪ health hazards.  
 
3.15 Some occupations, such as painter s engaged to paint the exterior of tall 
buildings , have a higher risk of accidental injur ies, thereby  increasing the 
probability of hospitalisation. Occupations involving the handling of asbestos 
products have a higher  risk of h ealth hazard over time , as it can lead to 
asbestosis1.  
 
B3. Age Factor  
 
3.16 Medical  problems tend to increase with age. Hence, the underwriting guidelines 
call for more  requirement  on medical examinations /tests  and attending 
physicians’ statements for older proposer s. The underwriter  may also  be 
investigat ing on the  medical histories of older proposer s more thoroughly , 
because of the increased possibility of related problems that may not be 
reflected  in such  proposal forms submitted . 
 
B4. Residency Factor  
 
3.17 Past, current  and future residency can be important risk factors. Underwriter 
looks out for applicants who may travel to war zones, areas where there are 
health related risk or even politically unstable areas as part of the underwriting 
consideration.  
 
B5. Additional Underwriting Considerations   
 
(a) Avocation  & Lifestyle Risks  
Avocation  and lifestyle risks are those which are associated with higher 
probabilities of contracting accident s or illnesses .  
 
 
 
 
 
1  Asbestosis is a disease caused by the inhalation of asbestos fibres and dust which can lead to respiratory 
failure and other complications. The incidence of carcinoma (cancer) of the lung is also higher for people 
exposed to asbestos dust.  
 

Health Insurance   
260 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] Engagements in the following activities are considered to be lifestyle risks:  
▪ drug abuse;  
▪ multiple sexual partners;  
▪ navigational recreational activity;  
▪ hazardous occupations;  and 
▪ hazardous sports, such as motor racing , mountaineering , parachuting  
and scuba  diving.  
  
Insurers may require the completion of specially designed questionnaires, 
such as a supplementary lifestyle questionnaire for underwriting (see 
Appendix 1 2A). 
 
(b) Habits  
Both alcohol and drug use s by the proposer represent serious risks. Either 
activity can result in significant health problems  or cause serious accidents 
while driving or during leisure activities. This is also known as the 
Proximate Cause.  
 
C. Factors That Are Specifically Important For Each Type Of Health Insurance  
 
3.18 Certain factors tend to be more important than others in the underwriting of 
each type of Health Insurance.  
 
C1. Medical Expense Insurance  
  
3.19 When  assessing Medical Expense Insurance, the medical background or history 
and current physical condition of the proposer  are the basic indicators of the 
probability of future problems that may result in medical expenses for 
hospitalisation and treatment. A proposer with a pre -existing condition  when 
buying Medical Expense Insurance will usually have the condition excluded 
from coverage by the insurer. For example, the  insurer  will exclude all 
conditions relat ing to the heart for any proposer  with hypertension (or high 
blood pressure ). 
 
C2. Disability  Income I nsurance   
 
3.20 The size and stability of the proposer ’s earnings and his overall financial 
situation are important factors for the underwriting of Disability Income 
Insurance . Minor accident or illness may result in a disability for some people 
because of his nature of work, e.g. a throat infection may resul t in a singer 
having to cancel his show , and thus, disrupting his flow of earnings.


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a throat infection may resul t in a singer 
having to cancel his show , and thus, disrupting his flow of earnings. To evaluate 
the occupational risks more accurately, underwriters have developed 
occupational risk classifications , as statistics show that persons in professional 
occupatio ns (such as accountants) and those with relatively high incomes have 
fewer periods of disabilities , as well as  disabilities of shorter duration than 
persons in other occupations. Details of the various types of occupational risk s 
classifications used by un derwriters are given in Chapter 4  of this Study Guide . 
The chapter also discusses in detail the other underwriting factors for this class 
of insurance.  
 
  


12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   261  
C3. Long -Term Care Insurance  
 
3.21 The two key factors for the underwriting of Long -Term Care Insurance (LTC) 
cover is the detection of any early cognitive impairment and morbidity risk. 
Statistics show that cognitive impairment is the major source of LTC claims that 
can last a long time. This is why some insurers require the proposer  to undergo 
some form of cognitive assessment during the underwriting stage. The second 
factor is assessing the morbidity risk of an individual. This means the chance of 
a person suffering any physical disability w hich will affect the individual’s 
ability to perform his activities of daily living. Many conditions which may not 
be significant in the assessment of a mortality risk will be critical for a LTC risk. 
For example, any musculoskeletal condition will be a potential risk for LTC 
coverage.   
 
C4. Critical Illness Insurance  
 
3.22 For Critical Illness Insurance underwriting, besides the proposer ’s medical 
history and current physical condition s, the following two other factors are also 
important:  
▪ smoking habit ; and 
▪ family history . 
 
3.23 Smoking can increase the incidence of a person suffering from cardiovascular 
and cerebrovascular diseases , and cancer. Some diseases like diabetes 
mellitus , and breast and colon cancer s have high prevalence among family 
members.   
 
C5. Managed Healthcare  
 
3.24 The key considerations for the underwriting of Managed Healthcare (MHC) are 
similar to  those for Medical Expense Insurance cover.  
 
3.25 However, when MHC covers are issued to groups, the age and gender of the 
group are strong factors in assessing the risk in the group. Older groups are 
associated with higher morbidity , while groups with a large proportion of 
females of child -bearing age tend to have higher costs , in view of healthcare 
and hospitalisation associated with pregnancies and deliveries.  
 
D. Types Of Underwriting Methods For Health Insurance  
 
3.26 There are  four underwriting methods for Health Insurance cover : 
▪ Full Medical Underwriting ;  
▪ Moratorium Underwriting  also known as Point -of-Claim Underwriting . 
▪ Simplified Issuance Offer  (SIO)  
▪ Guaranteed Issuance Offer  (GIO)  
 
 
 


Health Insurance   
262 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] D1. Full Medical Underwriting   
 
3.27 Full medical underwriting is where the proposer complete s a health declaration  
when he first appl ies for cover,  in order to let the insurer know about his health 
and medical background or history. The insurer will review the health 
declaration details and decide the basis on which the  insurer  can accept him for 
cover. If necessary, the insurer may need to ask him or his attending physician 
for further information.  The insurer may also ask him to undergo a medical 
examination.  
 
3.28 If the proposer has a pre -existing condition that may need treatment in the 
future, it will usually be excluded from cover, along with any conditions related 
to it.  
 
3.29 The insurer will provide written confirmation of any specific medical conditions 
that are excluded because of the proposer’s personal medical history, as well 
as the terms of the policy. The proposer could request the insurer to review the 
exclusions in the future should he wish to do so.  
 
3.30 Advantage Of Full Medical Underwriting  - Although this method involves  the 
proposer  more time to complete his proposal form , when he (the insured) 
receive s his policy document, he will have the certainty as to what is covered at 
the point of commencing the insurance cover , rather than at the time of making 
a claim.  
 
D2.


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D2. Moratorium Underwriting  (Used for Medical Expense Insurance)  
 
3.31 The proposer does not need to fill in a health declaration in his application , nor 
need to undergo a medical examination  for this method . Instead, the insurer 
will declare a waiting period (usually two to five years) that will automatically 
exclude any pre -existing conditions for which he has received treatment and/or 
medication, or has been asked advice on, or has symptoms of (whether or not 
diagnosed) during the declared waiting period immediately before the 
commencement date of the M edical Expense Insurance cover.  
 
3.32 However, if the proposer does not have any symptom, treatment, medication, 
or advice for those pre -existing conditions, and any directly related conditions  
during the waiting period , he will be cov ered when those conditions recur , 
subject to the terms and conditions of the policy , once the declared waiting 
period ends .  
 
3.33 It is important to understand that long -term medical conditions  (such as stroke, 
kidney failure, heart bypass and dementia ), which are likely to continue to need 
regular or periodic treatment, medication or medical advice, will never be 
covered by the policy , even after a moratorium , or waiting period , has elapsed 
or passed , as it is unlikely they  will meet the moratorium condit ions. However, 
even if the proposer declares these conditions under a full medical underwriting 
method, these declared conditions will also be permanently excluded by the 
insurer.  
 
  

12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   263  
3.34 The proposer should not delay in seeking medical advice or treatment for a pre -
existing condition simply to obtain cover under the policy.  
 
3.35 Advantage Of Moratorium Underwriting  - The method allows policy to be 
issued quickly. T he proposed insured will be asked to provide only basic 
information about himself. He will not be asked to disclose details of his medical 
history . However, he has to understand that , if he has any pre-existing medical 
condition , it will be excluded from cover. Also, if he can satisfy the moratorium 
criter ia (two to five years as outlined in the above section ) for a pre -existing 
condition, then treatment for that condition will automatically be covered if it 
later recur s, subject to the policy terms and conditions.  
 
3.36 Full medical  underwriting should always be the starting point, and  insurance 
advisers should never use the moratorium underwriting for their own 
convenience.  Moratorium underwriting should only be used where it affords a 
genuine advantage for the clients.  
 
Example 1 2.1 
 
The proposer has suffered from kidney stones recently. Will he be covered 
for any further treatment after the commencement date of his policy?  
 
Under Full Medical Underwriting : No , he has to declare this information 
under his full medical declaration, and a personal medical exclusion will be 
applied to his policy . This means that he will not be covered for future 
problems associated with his kidney stones and any related conditions.  
 
Under Moratorium Underwriting : No, as he has suffered from this condition 
before the commencement date of his policy, t his condition will not be 
covered. He will be eligible for cover only if he does not have any symptom, 
treatment, medication or advice over a continuous period of time (two to five 
years , depending on the policy conditions) after the commencement date of 
his policy.  
 
D3.       Simplified Issuance Offer  (SIO)  
 
3.37 In Simplified Issuance Offer, the proposer is typically asked only a few questions 
and depending on the underwriting guidelines of the insurance company you 
are applying for coverage, the answers to those questions will determine 
whether the application is approved or not, as well as the cost of the policy. The 
proposer will not be sent for medical examination.  
 
3.38 SIO are typically used in Critical Illness Plans where insurers market it via d irect 
or online channel.  
 
3.39 Pros and Cons  of SIO – This method allows applicants to get coverage quickly 
as compared to days or weeks with Full Medical Underwriting method. 
However, premium is higher due to greater risk the insurer will assume . 
 

Health Insurance   
264 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] D4.       Guaranteed Issuance Offer  (GIO)  
 
3.40 Guaranteed  Issuance Offer required no medical questions nor medical 
examination.


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4] D4.       Guaranteed Issuance Offer  (GIO)  
 
3.40 Guaranteed  Issuance Offer required no medical questions nor medical 
examination.  The insurer guarantees to issue the policy so long as the applicant 
is eligible for cover and this is usually an age requirement.  Eg GIO is only 
offered to someone below age 60.  To minimise risk of anti -selection, GIO 
policies are capped at a limited coverage and pre -existing conditions are usually 
excluded permanently.  
 
3.41 GIO is used in Hospital Income Plans or Single Critical Illness Plan where the 
products are sold via  direct or online channel.  
 
3.42 Pros and Cons of GIO – This method guarantees applicants to get coverage 
immediately regardless of health but they must be prepared t o pay a higher 
premiums for the ease of getting cover.  
 
E. Group Underwriting  
 
3.43 The underwriting process for Group Insurance differs from that for individual 
policies. Group is underwritten as a whole , before considering the risks 
imposed by the individual members in the group. Underwriters select the 
eligibility of a group based on a number of factors which include:  
 
E1. Reason For Existence  
 
3.44 Underwriter  needs to  ensure that the reason for the existence of a group 
applying for the group coverage is for some purpose (e.g. operating a business 
as in the case of employers) other than for purchasing the insurance. This is to 
reduce any anti -selection from the group.  
 
3.45 Group  members must be actively  at work on a full -time regular basis and have 
predictable incomes.  
 
3.46 Examples  of groups eligible for Group Insurance include:  
▪ employer -employee groups;  
▪ multiple -employer groups, such as trade associations and 
labour unions;  
▪ members of professional associations or affinity groups , such as leisure 
clubs;  and 
▪ creditor -debtor groups which generally consist of credit granting institution s, 
such as bank s and their debtors.  
 
E2. Group Stability  
 
3.47 Group  stability is an important consideration . An unusually high turnover rate 
in the group can result in high administrative costs for insurers , as they need to 
add new members and  delete leaving  members from the programme. On the 
other hand, if a group that has a stable  membership over a  long  period of time  
can also be riskier.  The members in the group become older , without any new


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On the 
other hand, if a group that has a stable  membership over a  long  period of time  
can also be riskier.  The members in the group become older , without any new 


12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   265  
and presumably younger members being added to the group , and henc e, the  
group  becomes a greater underwriting risk at each renewal  because of  higher 
average age.  
 
3.48 An ideal  group for insurers is one in which there is a steady flow of new 
members to replace those who leave the group , but not a massive influx or 
outflow of members.  
 
E3. Group Size  
 
3.49 Group size is important  as it provides a better spread and diversification of the 
risk. It allows for more efficient administration and lower costs. However, the 
gender distribution, age profile and the sum assured  of each insured member 
are also factors directly affecting the pr emium s. 
 
E4. Insured Company‘s Nature Of Business  
 
3.50 Certain lines of business tend to be more risky than others. A group from the 
oil rigging or timber logging industry is an example of a high -risk group.  The 
economic prospects of the industry in which the business operates and the 
strength and financial condition of the business itself are also important factors , 
as they will affect the sustainability and growth potential of the group.  
 
E5. Employee Classes  
 
3.51 Employee classes are often based on conditions of employment, such as job 
title, salary amount or length of service.  It has effects of over -representation. 
For example, over -representation by a highly paid class can result in higher -
than -average medical c laims , since people with higher incomes tend to use  
more expensive  medical services  (e.g. private clinics and private hospitals)  than 
do people with lower incomes. Over -representation by a class in which the 
employees earn low incomes can result in a highe r-than -desired rate of 
turnover.  
 
E6. Level Of Participation   
 
3.52 Underwriters are particularly concerned about the level of participation in a 
contributory plan as members’ participation in such a plan is on a voluntary 
basis. Insurers normally specify a minimum participation level requirement  
(e.g. between 70% and 90%) of eligible group members. This is  to guard against 
anti-selection  by spread ing of  risk, as well as to reduce administrative  costs , 
across a wide range of expected mortality within such a group .  
 
E7. Age & Gender Within The Group  
 
3.53 Age is an important factor in underwriting , as it increases the mortality of the 
group to be insured. Gender in the form of the ratio of males to females is also 
an important consideration , as females have lower mortality rate s (but higher 
morbidity rate s) than male s. 
 
  


Health Insurance   
266 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 3.54 The underwriting requirements are very much dependent on the size of the 
group and the type of insurance applied for. For example, a group  size of  20 
members applying for a Group Medical Expense  Insurance policy may not be 
require d to complete individual Health Declaration form s. However , if this 
group appl ies for a Critical Illness Insurance policy, the underwriter w ill require 
every member to complete a Health Declaration form . For those whose sum 
assured s exceed the free cover limit2, the underwriter w ill requir e them to go 
for medical examinations and/or other tests in accordance with the 
underwriting guidelines.  
 
 
 
 
 
 
  
 
 
 
 
 
 
 
E8. Expected Persistency  
 
3.55 New business cost (acquisition expenses) can be substantial (e.g. underwriting  
the proposal ) to the insurer when acquiring a new group. The insurer will 
spread the acquisition expenses over an extended period, typically three to five 
years , so that the fir st year will be more competitive. For this reason, the insurer 
wants some assurance that the new business will remain in the books until 
these expenses are recovered. As such, the  insurer will want to avoid any 
business that may be short -lived (e.g. specia l project group) or an employer that 
has a history of frequently switching insurers.  
 
E9. Past Claims Experience  
 
3.56 A group’s claims history can be a good indicator of the likely future claims 
experience  of this portfolio .


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E9. Past Claims Experience  
 
3.56 A group’s claims history can be a good indicator of the likely future claims 
experience  of this portfolio . For example, for a large group with an average  
S$100,000 past claims per year , an insurer can reasonably expect similar claim s 
utilisation (assuming no change in the composition and profile of the group) 
and can charge premiums accordingly. This is why past claims experience is an 
important  factor in group underwriting  consideration . 
 
  
 
2  Free cover limit is the maximum coverage that an insurer is willing to provide to each member of a 
group without asking for declaration of health. Excess sum assured above the free cover limit will be 
underwritten before such coverage is granted.  
 GROU P COVERAGE  
 
 
 
      All Employees  Some Employees  Vs
. 

12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   267  
E10. Medical Inflation  
 
3.57 Medical inflation is the increase in the costs for medical services  over a period 
of time . It may vary based on the types of service s. For example, hospital costs 
may increase faster than physician charges.  
 
3.58 Medical inflation will affect the claims experience of a group  and is an important 
factor in  group  underwriting. It is measured by comparing historical data to 
more current cost data , over a period of time (e.g . 12 months) .  
 
E11. Medical Utilisation Rate & Trend  
 
3.59 Changes in utilisation can affect the trend. For example, when a group policy 
has been in  force for some time, the average age may rise, thus increasing the 
frequency of claims in the group. Changes in medical practice, such as the use 
of new drugs , will also affect the cost of a plan. Hence, the medical utilisation 
rate and trend are importan t factors that underwriters will take into 
consideration , when assessing the risks posed by the group.  
 
 
4. SOURCES  OF UNDERWRITING INFORMATION  
 
4.1 The underwriter relies on information obtained from various sources to make 
his decision. The primary source is the proposal form. Others include:  
▪ Agent’s Statement;  
▪ Medical Examinations/Tests;  
▪ Attending Physician ’s Statement (APS);  and 
▪ Supplementa ry Questionnaires.  
 
4.2 The extent to which the und erwriter uses these sources of information depends 
on the type and size of  the policy applied for. A proposal  for a S$500 (per month ) 
Disability Income Insurance policy with benefits for two years on a person under  
the age of 30 years may require a review of only the most significant health 
history , as well as a confirmation of the person’s salary that he is earning at the 
moment. On the other hand, a proposal  from a 50 -year-old person for a 
Disability Income Insurance policy for S$10,000 a month , with benefits to the 
age of 65 years , will require more careful scrutiny. More information, such as 
additional medical tests and a large  sum assured  financial  questionnaire , will 
be required for underwriting.  
 
A. Proposal Form  
 
4.3 The proposal  (application)  form is the primary source of underwriting 
information for the insurer. It provides the basic information for the underwriter 
to make a decision , to provide the requisite coverage , or to modify it, to try to 
obtain more information , or to re ject the proposal entirely.  
 
4.4 After the policy is issued, the proposal  will form a part of the insurance contract 
and is used as the basis when a claim is filed.  If an insurer determines before 
the end of the contestable period that there has been a false s tatement or 
 

Health Insurance   
268 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] incomplete dis closure of material information on the proposal , the insurer may 
reject the claim and rescind the contract. As such, every proposal form is 
required by the Insurance Act 1966 , to include a  warning statement , such as the 
following, to ensure  that the duty of good faith  is kept by the insured : 
 
“Pursuant to Section 23(5) of the Insurance Act 1966 , you are to disclose 
in this proposal form fully and faithfully, all the facts which you know or 
ought to know, otherwise, you may receive nothing from the policy.”  
 
A1.


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Sections Of A Proposal Form  
 
4.5 Although the proposal form can vary for each of the Health 
Insurance products, it generally contain s the information  as 
described below : 
 
(i) Identities Of The Contract Parties  
The insurance contract is between the insurer and the proposer.  
 
The header of the proposal  form  has the name of the insurer , its principal 
place of business  and contact details , so the proposer  knows to which 
insur er he is applying for an insurance policy. The questions contained in 
the “Particulars of Life To Be Insured (the proposed insured ) and 
Particulars of Proposer” secti ons serve two pur poses : 
▪ They distinguish the proposer from the proposed insured . Although t he 
proposed insured and the proposer are normally the same person , in a 
third -party insurance (for example , a mother applying for insurance for 
a child), they are d ifferent persons.  
 
▪ They provide relevant information to the underwriting department to 
assess the risk  factors , such as occupation, age and gender . The 
information determines the eligibility of the person applying for 
coverage , as well as the correct  premium to be charged.  
 
(ii) Particulars Of Policy Applied For  
This section indicate s the details of the policy that the proposer is applying  
for, such as the type of plan and sum insured . 
 
(iii) Information On Past Applications & Existing Policies  
This sect ion is meant for the proposer  to state the types of policies that he 
already has or has applied for , but was postponed or rejected.  The 
proposer  also needs to indicate whether he is purchasing this policy to 
replace an existing policy.   
 
(iv) Personal Health Details & Habits Of The Proposed Insured  
This section provides a detailed description of the proposed insured’s 
medical history, current physic al condition, habits in terms of drug taking, 
alcohol drinking, as well as family history.  
 
  
 

12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   269  
(v) Declaration  
The signatures of the proposer and proposed insured  are very important , 
as they serve  a number of purposes as follows:  
▪ that the proposer /proposed insured  has disclosed all material facts 
truthfully and faithfully in the proposal form;  
▪ that the proposer /proposed insured  has not withheld any material facts;  
▪ that the proposer /proposed insured  is aware that the benefits may be 
lost if material facts are not disclosed;  and 
▪ that the proposer /proposed insured  agrees and authorises the insurer 
to release to any medical source  or insurance office and vice versa, any 
information concerning  him at any time , regardless of whether the 
proposal is eventua lly taken up.  
 
4.6 The format of the proposal  form  and the depth of its questions vary among the  
insurer s, depend ing on the types of products . Sample copies of the Individual 
Insurance proposal form and Group Insurance proposal  form are in Appendices 
12B and 12C respectively.  
 
4.7 The proposer  and proposed insured  must personally sign the proposal form  
and counter -sign on any changes made to the proposal form , as the 
responsibility of proper disclosure of material facts in the proposal  form lies 
with the proposer  and proposed insured . 
 
B. The Agent’s Statement  
 
4.8 Most insurers provide separate form s for confidential remarks by agents, such 
as how long and how well they know the ir proposer s.  
 
4.9 An agent may also be asked to indicate:  
▪ knowledge of any information on the proposer  that is not included in the 
proposal  form , but which may have a bearing on risk selection; and  
▪ the proposer ’s approximate net worth, annu al earned income, and income 
from sources other than employment.  
 
4.10 An insurance representative  who lets the under writer know of special 
circumstances of the sale , or a special problem not otherwise identified  will gain 
the underwriter’s confidence. Often the insurance representative ’s remarks may 
clarify a situation that is questionable or unclear , based on information from 
other sources.  
 
C. Medical Examinations/Tests  
 
4.11 Insurers re quire medical examinations/te sts for  certain types of Health 
Insurance , namely  Disability Income Insurance, Critical Illness Insurance and 
Long -Term Care Insurance. A physician appointed by the medical director of 
the insurer usually completes these examinations and records the an swers to 
the medical questions. The proposer  needs to sign the medical examination 
form.


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A physician appointed by the medical director of 
the insurer usually completes these examinations and records the an swers to 
the medical questions. The proposer  needs to sign the medical examination 
form.  
 

Health Insurance   
270 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 4.12 The examination provides information on the height and weight, pulse, blood 
pressure, and other important clinical/medical findings.  
 
4.13 Other common tests that an insurer may request include:  
▪ Electrocardiogram (ECG) test; 
▪ Chest X -ray; 
▪ Micro -urinalysis;  
▪ Blood profile analysis;  
▪ Human immunod eficiency virus ( HIV) Antibody test;  and 
▪ Cognitive assessment for Long -Term Care Insurance.  
 
4.14 Cost of the medical examination is borne by the insurer , unless the policy is 
subsequently not taken up.  
 
D. Attending Physician ’s Statement (APS)  
 
4.15 An APS is a standard pre -printed form for the attending physician to complete 
on his personal knowledge of the proposer , based on the proposer ’s medical 
records. This report is usually required , when the underwriter needs to have a 
better insight into the proposer ’s medical history , that is not available from the 
medical examination.   
 
E. Supplementary Questionnaires  
 
4.16 The p roposed insured may have to complete s pecial questionnaires  for the 
insurer to gather additional information to classify a risk. The forms usually deal 
with medical histories, financial information and special hazards.  
 
4.17 The typical medical question naires are for such specific health his tories  like 
blood pressure conditions, asthma, ulcers  or diabetes. The financial 
questionnaires attempt to elicit information about net worth and unearned 
(passive) income , or de velop information on an in surable interest in a special 
type of business insurance situation. Some insurers use the supplementa ry 
questionnaire s designed to obtain and de velop information on certain activi ties, 
such as aviation, scuba diving, and various forms of racing.  
 
 
5. HOW AN INSURANCE REPRESENTATIVE  CAN HELP IN THE UNDERWRITING 
PROCESS  
 
5.1 Since  the insurance representative  has personal contact with the client, he  is in 
the best position to select the client. In fact, he is considered to be the field 
underwriter.  
 
5.2 He can help by firstly, establishing his client’s motivation and needs to  purchase 
the policy. Sec ondly, he should go through the questions in the proposal form, 
informing his client to declare all the information truthfully and faithfully, and 
to the best of his knowledge  and belief .   
 
 
 

12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   271  
5.3 If any of the answers in the proposal  form is “Yes”, he should ex tract as much 
detail s as possible  from his client. For example, if his client has told him of 
seeing a doctor for diabetes, the insurance representative should find out from 
his client as much information as possible, such as  the following : 
▪ Name and addres s of the attending doctor . 
▪ When was the onset of the diabetes ? 
▪ Is he on insulin treatment or oral medication ? 
▪ Frequency that he needs to go for his follow -up treatment . 
▪ Is he careful with his diet, etc.?  
 
5.4 By obtaining all such information, the insurance representative can help the 
underwriter to decide whether there is a need to call for an  APS, or a completion 
of a questionnaire on diabetes. If, on the other hand, his client says that he has 
diabetes without detailed information being provi ded, the underwriter is likely 
to request for further  underwritin g information . 
 
5.5 By ensuring that all questions in the proposal form are duly completed and 
signed by the propose r in the presence  of the insurance representative , it 
enables the proposal  form  to be processed expeditiously . Knowing the 
underwriting guidelines, such as when medical examinations/tests and 
supplementary  questionnaires are required , will also help to expedite the 
underwr iting process.  
 
 
6.


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Knowing the 
underwriting guidelines, such as when medical examinations/tests and 
supplementary  questionnaires are required , will also help to expedite the 
underwr iting process.  
 
 
6. FINAL UNDERWRITING DECISION  
 
6.1 The underwriter may accept a Health Insurance proposal  on any one of the 
terms of acceptance  as described below : 
 
A. Standard Risks  
 
6.2 When  a proposal is accepted as a standard risk, the policy is issued , based on 
the premium rate stated in the rate book or brochure . The policy will then be 
issued if the premium has been fully paid. 80% to 90% of all proposal s received 
by the insurer are accepted at standard rates.  
 
B. Sub-standard Risks  
 
6.3 Sub-standard risk s are people with medical or non -medical impairments which 
make them higher risk s to the insurer . The i nsurer deal s with a sub-standard 
risk, by modifying the cover that the proposer has applied for. The insurer c an 
modify the cover  as describe d overleaf.  
 
B1. Modifications Of Cover  
 
6.4 Coverage  modification may be an  exclusion, an extra premium  charge , a 
change in benefits, reducing the benefit -paying period, increasing the deferred 
period , or a combination of some of these approaches.  
 


Health Insurance   
272 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] (i) Specific Exclusions  
Exclusions is used as a means of issuing coverage to persons who would 
otherwise have to be declined. When an exclusion is imposed, an 
endorsement is issued to state that the in surer will not pay for any claim 
arising out of the particular excluded risk, such as from a particular 
medical problem, e.g. back disorder or an unusually hazardous activity 
(e.g. motor car racing). The endorsement may be worded to exclude 
coverage for on ly a specific disorder, such as “hernia” , or it may exclude 
an entire system or bodily area, such as “disease or disorder of the 
stomach or intes tines.” The actual wording is deter mined by the nature 
and severity of the person’s medical history or impair ment , as well as by 
the insurer’s underwriting philosophy.  Specific e xclusions are commonly 
used in Medical Expense Insurance.  
 
(ii) Extra Premiums  
Depending on the types of Health Insurance products that are 
underwritten, the insurer may charge extra premiums.  This is commonly 
used in the underwriting of Disability Income Insurance and Critical Illness 
Insurance. However, it is rarely  used in Medical Expense Insurance.  
 
(iii) Modification Of Benefits Offered  
Another method of modification is to change the benefits t o something 
other than what the propose r has requested. Examples of such 
modifications include a reduction in the amount of monthly benefit, a 
longer deferred period , or shorter benefit period on a Disability Income 
Insurance policy . Some times, modificat ions are used in conjunction with 
imposition of extra premiums or exclusions.  
 
In fact, some insur ers will automatically limit the benefit period on a 
Disability Income proposer  who requires a large extra premium. For 
instance, an insurer may not issue a  benefit period of more than five years 
to any risk requiring an extra pre mium of over 50%.  
 
Benefits may also be reduced , or expens e participation (deductible and 
co-insurance) increased, to counteract the possible over -utilisation of 
Medi cal Expense Insurance policies.  
 
B2. Postponement  
 
6.5 At times, a proposed insured may have just undergone a surgical operation or 
is going for a  surgery . For such a case, the underwriter will normally postpone 
the proposal  for a specified period of time (e.g. six months after the surgical 
operation). That is, the underwriter is not able to offer any terms at that point 
of time , but is prepared to reconsider the case at a later date.  
 
  

12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   273  
B3. Decline  
 
6.6 The most drastic underwriting action is to decline a proposal . This choice is 
used only for serious medical reasons , or because the proposed insured is 
clearly outside a particular insurer’s parameters of acceptable risks for 
occupational or financial reasons.  Most insurers have declination rates below 
10%.


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This choice is 
used only for serious medical reasons , or because the proposed insured is 
clearly outside a particular insurer’s parameters of acceptable risks for 
occupational or financial reasons.  Most insurers have declination rates below 
10%.  
 
6.7 Hence, it is important for the insurance representative to inform his prospective 
client that he should apply for Health Insurance when he is healthy , to avoid the 
risk of being declined later when his health deteriorates or fails. Furthermore, 
Health Insurance premiums typically increase with age as one gets older.  
 
 
7. COMMENCEMENT OF RISK  
 
7.1 Whatever the terms of acceptance, the insurer will communicate the 
underwriting decision to the proposer  in the form of a letter of acceptance. If 
the proposer  agrees to the terms as stated in the letter of acceptance and pays 
the premium, the cover will be effected , and a policy will be issued to him.  
 
 
8. CONCLUSION  
 
8.1 As can be seen, underwriting is an important process , because it helps to sieve 
out undesirable risks , and ensures that t he premium charged corresponds with 
the risks involved. In fact, underwriters are considered as gatekeepers . They 
help to protect the insurer against anti -selection  risk. It is important that the 
insurance representative  cum field underwriter  clearly under stand s the 
underwriting process and the factors involved in underwriting , as this will be of 
good help to both the insurer  and the client.     
 
  
 

Health Insurance   
274 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] APPENDIX  12A 
 
SUPPLE MENTARY LIFESTYLE QUESTIONNAIRE  
 
 
Name of Life to be In sured   Proposal  for Life Insurance Number  
Name of Propo ser (if other than Life to be In sured)  
PURSUANT TO SECTION 2 3(5) OF THE INSURANCE ACT  1966  AND ANY REPLACEMENT THEREOF, YOU ARE TO DISCLOSE IN THIS 
SUPPLEMENTARY QUESTIONNAIRE, FULLY AND FAITHFULLY, ALL FACTS WHICH  YOU KNOW OR OUGHT TO KNOW, OTHERWISE THE 
POLICY ISSUED HEREUNDER MAY BE VOID.  
Acquired Immune Deficiency Syndrome ( AIDS ) is a new but significant risk for life in surance, particularly as there is now no known cure. As 
with dangerous sports, occupations a nd fatal diseases, life insurers are concerned to identify those individuals who are at risk of contracting 
AIDS. This is to ensure equity for all new proposer s and to protect the funds and  bonuses of all existing policy owners. To date, AIDS has 
mainly affected certain groups of people, although not exclusively. The life insurance industry, therefore, needs to identify  members of 
these risk groups to ensure that established life selection principles are maintained. ( This does not mean that all mem bers of such high risk 
groups will be refused cover).  
This questionnaire will also be given to those who purchase large sum assured.  
In order to fulfil this aim, we must, therefore ask you to complete this form and return it to us in the envelope provided.  Your answers will 
be treated confidentially. When completing this form, please ensure that you answer each question fully and to the best of yo ur knowledge.  
We would ask you to read carefully  the declaration at the bottom of this form. Failure to disclose facts pertinent to these questions could 
affect payment of benefits. If you have any doubts whether to disclose any information, you are strongly advised  to do so.  
1. Do you belong to, or have y ou ever belonged to, any of the following AIDS high -risk groups? 
If yes, please indicate accordingly.  
a. homosexuals  
b. bisexuals  
c. intravenous drug users  
d. haemophiliacs  
e. prostitutes   
2. Have you ever had sexual relationships with any of the AIDS high risk groups indicated in 
Question (1)? If so, indicate which and when was the most recent encounter.   
3. Have you ever been tested, received medical advice, counselling  or treatment in connection 
with AIDS or an AIDS -related condition or on suspicion that you may have AIDS, or an AIDS -
related condition or are carrying the Human immunodeficiency virus (HIV)? Please give details 
of the circumstances in which the test or ad vice was sought.  
(Routine testing for blood donation purposes may be ignored).   
4. Have you ever been tested, received medical advice or treatment in connection with any 
sexually transmitted disease including hepatitis? If yes:  
a. indicate the type of sexually transmitted disease which you have contracted in the past.  
b. state the number of occasions and dates exposed to sexually transmitted diseases.


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If yes:  
a. indicate the type of sexually transmitted disease which you have contracted in the past.  
b. state the number of occasions and dates exposed to sexually transmitted diseases.  
c. give name and address of doctors who attended to you on these occasions.   
5. Have you ever been rejected as a blood or organ donor? If yes, when, by whom and for what 
reasons?   
I/We declare that the answers I/we have given are, to the best of my knowledge, true and complete and that I have not withhel d any material 
information that may influence the assessment or acceptance of this proposal.  
I/We consent to the Company seeking information from any doctor who has attended to me, including any named in my answers to the 
questions above.  
I/We agree that this form will constitute part of my/our Proposal  for Life In surance and that failure to disclose any material fact known to 
me/us may invalidate the contract.  
 
 
Signature of Life to be In sured                                               Signature of Propo ser (if other than Life to be In sured)  
Date:                                                                   Date:  
ABC Insurance Company (Singapore) Limited  
21 Any Street, ABC Centre, Singapore 654321  Tel : (65) 6789 8181  Fax : (65) 6789 8282  


12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   275  
 
                                                                                                                      
                                                                                
 
 
  APPENDIX  12B 
 
ABC Insurance Company (Singapore) Limited  
21 Any Street, ABC Centre, Singapore 654321  
Tel: (65) 6789 8181   Fax: (65) 6789 8282  
 
INDIVIDUAL HOSPITAL & SURGICAL INSURANCE PROPOSAL FORM  
 
 
Agent’s Code:    Policy No:  
  
Agent’s Name:   ____________________________________________________  
 
WARNING:  
PURSUANT TO SECTION 23(5) OF THE INSURANCE ACT 1966 , YOU ARE TO DISCLOSE IN THIS PROPOSAL FORM, FULLY AND FAITHFULLY, 
ALL THE FACTS WHICH YOU KNOW OR OUGHT TO KNOW, OTHERWISE NOTHING MAY BE PA YABLE UNDER THE POLICY. IF YOU ARE NOT 
ABLE TO ANSWER ANY OF THE QUESTIONS IN THIS PROPOSAL BECAUSE YOU DO NOT HAVE THE ANSWERS AND ARE ALSO NOT ABLE 
TO OBTAIN THE INFORMATION TO ANSWER THE QUESTION(S), PLEASE INDICATE ACCORDINGLY.  
 
A. PARTICULARS OF PROPOS ER (Proposer  can be a company / firm / individual)  
Full Name as shown on NRIC/Passport/BC*    
Mr/Mrs/Mdm/Miss/Dr*  
 
          Sex: M  F 
Address:  
 
Tel. No. Home:   Office:                  Ext: 
Race:                            Chinese                    Malay                  Indian                   Caucasian                 Others :  
Nationality:                                                                                                                    Place of Birth:  
*NRIC/Passport No.                                                                                                        Date of Birth:                  /                /  
 
Age Next Birthday:                        Marital Status    :        Single         Married           Widowed        Divorced        
 
Present Employment Status:              Employed                Unemployed                   Self -employed  
 
Name and Address of Company: __________________________________________ __________________________________________ ______________ ________  
 
Position Held: _______________________________ ______________     Exact Nature of Duties involved:  ________________ ____________________________  
 
B. PLAN PROPOSED  
 
 PLAN:                      A           B             C            D            E  
 
Period of Insurance:  from                      to        Total Premium:         PP:                  GST:  
              (dd/mm/yyyy)                      (dd/mm/yyyy)  
                
C. PARTICULARS  OF PERSONS TO BE INSURED  
 
Full Name as in *NRIC/Passport/B .C. *NRIC/B.C./Passport 
No. Sex Date of Birth  ANB  Height (m)  Weight 
(Kg) Occupation  Relationship to Proposer  
1.         
2.         
3.         
4.         
 
D. ADDRESS  OF PERSON(S) TO BE INSURED (To be completed if it differs from above)  
 
 
*Please delete accordingly.  
  Month                 Day                         Year  Postal Code : 
::


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Health Insurance   
276 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  E. STATEMENT BY PROPOSER  
 
1. What is the name and address of the regular doctor?   
2. For what and when have you consulted him or any other doctor in the past? Please give name 
of doctor consulted.  
          
      YES          NO  
3. Are there any persons listed in Section (C) above currently under observation or receiving any 
treatment or medicine?   
4. Have any of the persons listed in Section (C) above ever had or ever been that any of them 
suffered from or had been treated for any of the following:  
a. Chronic cough, spitting of blood, asthma, hay fever, pleurisy, tuberculosis or any other disease 
of the r espiratory system?  
b. High or low blood pressure, heart disease, chest pain, heart attack, shortness of breath, 
palpitations or any heart disorder?  
c. Epilepsy, fits, dizziness, mental or nervous disorder?  
d. Diabetes, sugar or blood in urine, kidney disorder, kidney colic or stone or hernia?  
e. Disease of the eyes, ears, nose or throat?  
f. Arthritis, sciatica, rheumatism, back, spine, bone, joint, muscle or skin disorder?  
g. Ulcer or disorder of the stomach, intestines, haemorrhoids or rectal disorder?  
h. Gall bladder stone or liver disease or any type of hepatitis?  
i. Cancer, tumour or growth of any organ system?  
j. Anaemia, thyroid disorder (such as Goitre) or rheumatic fever?  
k. Sexually transmitted disease such as syphilis, gonorrhoea  or herpes or non -specific urethritis?  
l. Any illness, disease or injury not mentioned above?  
  
5. Have any of the persons listed in Section (C) above  ever received medical advice, treatment or 
had a blood test in connection with AIDS or AIDS related conditions?   
 
If any of the above a nswers to question 3, 4 or 5 is “YES”, please furnish the details below, indicating  the question number (You may  
use a separate sheet of paper, if the space provided is insufficient).  
 
Question 
No. Name of persons to be insured  Details of medical condition  Date treated / 
hospitalised  Type s of treatment  Name & address of 
attending doctor/hospital


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12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   277  
 F. DECLARATION  
 
I/We declare that no material facts, that is, facts likely to influence the assessment and acceptance of this proposal have b een withheld 
and to the best of my/our knowledge and belief the information furnished herein is true and complete and in the case of a life of another 
the information furnished herein shall be the basis of the contract of assurance.  I/We authorise any medical source or  insurance office to 
release to ABC Insurance Company (Singapore) Limited and similarly ABC Insurance  Company  (Singapore) Limited t o release to any 
medical source or  insurance office, any relevant information concerning me/us at any time, irrespective of whether the proposal is 
accepted by ABC Insurance Compa ny (Singapore)  Limited.  A photographic copy of this authorisation shall be as valid as the original. I/We 
understand that any payment made at the time of signing this proposal or thereafter shall be held as a deposit placed with AB C Insurance 
Company (Sing apore) Limited until acceptance of this proposal by ABC Insurance Company (Singapore) Limited subject to the terms and 
conditions contained in the receipt issued in respect of the said payment.  
 
 I/We agree that should I decide to cancel the Policy issued in respect of this proposal within 14 days after receipt of the Policy document, 
the amount refunded to me/us shall be the premium paid less expenses in underwriting the Policy.  
 
However, should the proposal be declined, then I/we shall be entitled to a fu ll refund of the amount paid as premium for this proposal.  
 
I/We further understand that the assurance granted shall be subject to the conditions in and endorsed on the Policy issued.  
 
If a material fact is not disclosed in this proposal, any policy issued  may not be valid. If you are in doubt as to whether a fact is material, 
you are advised to disclose it. This includes any information that you may have provided to the agent but was not included in  the 
proposal. Please check to ensure you are fully satisf ied with the information declared in this proposal.  
 
 
 
 
    
Signature of Proposer & Company’s Stamp (if applicable)          Signature of Witness  
 
Date:   Name:   
 
 
   NRIC No.   
     Signature of Life Insured                  
 
Date:          Date:


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Health Insurance   
278 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] APPENDIX  12C 
 
ABC Insurance Company (Singapore) Limited  
21 Any Street, ABC Centre, Singapore 654321  
Tel: (65) 6789 8181   Fax: (65) 6789 8282  
 
GROUP HOSPITAL & SURGICAL INSURANCE PROPOSAL AND  
HEALTH DECLARATION FORM  
 
PURSUANT TO SECTION 23(5) OF THE INSURANCE ACT 1966  AND ANY REPLACEMENT THEREOF, YOU ARE TO DISCLOSE IN 
THIS PROPOSAL  FORM, FULLY AND FAITHFULLY, ALL THE FACTS WHICH YOU KNOW OR OUGHT TO KNOW, OTHERWISE YOU 
MAY RECEIVE  NOTHING FROM THE P OLICY  
 
A. GENERAL INFORMATION  
 Name of Company       Nature of Business  
 
 Postal Address:  
 Telephone No.:                   Fax No.:    Agent or Broker  
 
B. ELIGIBILITY  
(i) How many people do your Company employ?  
(ii) Is cover  to be applied to all Employees?  Yes No 
(iii) If No, please define the class of employees for whom cover is applied, e.g. Management, Executives, Administration  
Clerical staff.  
 
C. PLAN TO BE INSURED (Please tick the plan applicable)  
  PLAN A  PLAN B  PLAN C  
 EFFECTIVE DATE       (Subject to satisfactory health underwriting by the Company) :   
  
 OTHER OPTIONS  
 
D. GROUP MAJOR MEDICAL – (OPTIONAL)  
  PLAN A  PLAN B  PLAN C  
 Overall limit per year              SS$50,000     SS$75,000       SS$100,000  
 Co-insurance  20%  20%  20% 
 
E. GROUP OUT -PATIENT CANCER TREATMENT AND KIDNEY DIALYSIS – (OPTIONAL)  
  PLAN A  PLAN B  PLAN C  
Outpatient Cancer   
Treatment per year                       SS$10,000           SS$20,000                 SS$50,000  
 
Outpatie nt Kidney  
Dialysis per year                                 S S$10,000                         SS$20,000                 SS$50,000  
 
F. Name of Insured Employee:   Spouse (if insured)     Child(ren)***if insured  
  
Sex: 
Occupation:  
Date of Birth:  
Height (Cm) & Weight (Kg):  
NRIC/Passport/BC No.:  
Nationality*:  
Martial Status:  
Country of Residence**:  
Notes:  
* Foreign Nationalities – Please furnish proof of current work permit/employment pass.   
 ** To be completed if you or any of the family member s to be insured have any intention of residing outside Singapore for a period of  
  more than 90 days. Acceptance/Terms and Conditions are subject to the Company’s approval.  
*** Proof of student status is required for insured child(ren) above 18 years old.


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12. Health Insurance Underwriting  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   279  
G. HEALTH STATEMENT – To be completed by each insured employee  
1. Have you or any of the family members to be insured ever had any life, 
accident, hospitalisation or sickness insurance rejected or cancelled or issued 
on special terms or declined on renewal?  
2. Do you or any of the family members to be insured have life, ac cident 
hospitalisation or sickness insurance with this or any other company?  
3. Do you or any of the family members to be insured have any physical defect, 
deformity, impairment of hearing or vision, or loss of hand, foot or vision?  
4. Have you or any of the fa mily members to be insured:  
(a) ever had a surgical operation?  
(b) ever been advised to have a surgical operation which has not yet been 
performed?    
5. Are you or any of your family members to be insured currently under any 
observation or receiving any treatment or medicine?  
6. Have you or any of the family members to be insured ever had or been told 
you had or been treated for the following disorder or disease:  
(a) Chronic cough, spitting of blood, asthma, hay fever, pleurisy, 
tuberculosis or an y other disease of the respiratory system?  
(b) High or low blood pressure, heart disease, chest pain, heart attack, 
shortness of breath, palpitations or any heart disorder?  
(c) Apoplexy, paralysis, epilepsy, fits, dizziness, mental or nervous 
disorder?  
(d) Diabetes, sugar or blood in urine, kidney disorder, kidney colic or stone 
or hernia?  
(e) Arthritis, sciatica, rheumatism, back, spine, bone, joint, muscle or skin 
disorder?  
(f) Ulcer or disorder of the stomach, intestines, haemorrhoids or rectal 
disorder?  
(g) Gall bladder stone or liver disease or any type of hepatitis?  
(h) Cancer, tumour or growth of any organ system, thyroid disorder (such 
as Goitre) or anaemia?  
(i) Female reproductive system including lumps, but not limited to fibroids 
or cysts.  
(j) Sexually transmitted disease such as syphilis, gonorrhoea  or herpes or 
non-specific urethritis?  
(k) Any illness or disease or injury not mentioned above?  
 
7. What are the complete details of any questions under 1 to 6 above  
answered “YES”?  
 
 
 
 
Question 
No. Name of Person  Details of Medical 
Condition  Date of First 
Consultation  Duration 
of Illness  Name & Address 
of Dr/Hospital  
 
 
8. Name and address of your regular doctor (if any)?  
 
 
9. Please state the type of policy and policy number to Question 2 (above) if your answer is “Yes”.  
 
 
I hereby declare that the foregoing statement and particulars are true and complete and I have not withheld any information t hat 
may influence the acceptance of this proposal, and I agree that this proposal and declaration shall be the basis of the contr act 
between me and the insurer . 
I declare that I and all the named family members to be insured are Singapore citizens or permanen t residents or work permit 
holders or employment pass holders working in Singapore.  
It is further understood and agreed that the proposal will be effective only if it has been accepted by the company and the 
applicable premium has been paid.  
I hereby authorise any hospital, surgeon, medical practitioner, clinic or other medical or medically related facilities, insurer  or 
other organisation or person to release to ABC Insurance Company  (Singapore) Limited any such information with respect to any 
illness and to provide earlier medical history concerning me/us.    
 
 
 
 
                  Date                             Signature of Prop oser  
Employee  
Yes/No  Spouse  
Yes/No  1st Child  
Yes/No  2nd Child  
Yes/No  3rd Child  
Yes/No


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44
HEALTH INSURANCE UNDERWRITINGCHAPTER
12
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
What is underwriting? •Underwriting is the process, whereby an insurer assesses the risk and
determines whether or not to accept an application and, if so, on what termsthat it will offer coverage to the applicant or proposer.
Medical factors •
Medical history.
•Current physical condition.
Non-medical factors •Financial factor.
•Occupational factor.
•Age factor.
•Residency factor.
•Additional underwriting considerations.
Underwriting factors that are specifically important for Medical Expense Insurance•
Medical background or history.
•Current physical condition.
Underwriting factors that are specifically important for Disability Income Insurance•
Size and stability of the proposer’s earnings.
•Overall financial situation.
Underwriting factors that are specifically important for Long-Term Care Insurance•
Detection of any early cognitive impairment.
•Morbidity risk.
Underwriting factors that are specifically important for Critical Illness Insurance•
Smoking habit.
•Family history.
Underwriting factors that are specifically important for Managed Healthcare•
Similar to those for Medical Expense Insurance cover.
•Age and gender of the group are strong factors in assessing the risk in thegroup.
Types of underwriting methods for Health Insurance•
Full Medical Underwriting.
•Moratorium Underwriting also known as Point-of-Claim Underwriting.
•Simplified Issuance Offer (SIO).
•Guaranteed Issuance Offer (GIO).
Various underwriting factors for Group Insurance•
Reasons for existence.
•Group stability.
•Group size.
•Insured company’s nature of business.
•Employee classes.
•Level of participation.
•Age & gender within the group.
•Expected persistency.
•Past claims experience.
•Medical inflation.
•Medical utilisation rate and trend.
Sources of underwriting information•
Proposal form.
•Agent’s Statement.
•Medical Examinations/Tests.
•Attending Physician’s Statement (APS).
•Supplementary Questionnaires.

45
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
How an insurance 
representative can help in 
the underwriting process?• “Field underwriter”.
• By obtaining all required information, the insurance representative can help 
the underwriter to decide whether there is a need to call for an APS, or a 
completion of a questionnaire on diabetes.
• By ensuring that all questions in the proposal form are duly completed and 
signed by the proposer in the presence of the insurance representative, it 
enables the proposal form to be processed expeditiously.
• Knowing the underwriting guidelines, such as when medical examinations/tests 
and supplementary questionnaires are required, will also help to expedite the 
underwriting process.
Various terms of 
acceptance for Health 
Insurance proposals• Standard risks.
• Sub-standard risks.
 »Modifications of cover.
 »Postponement.
 »Decline.
When does the risk 
commences?When the proposer agrees to the terms as stated in the letter of acceptance and 
pays the premium, the cover will be effected, and a policy will be issued to him.


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Health Insurance   
280 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  
      CHAPTER 13  
NOTICE NO: MAS 120 – DISCLOSURE AND 
ADVISORY PROCESS REQUIREMENTS FOR 
ACCIDENT AND HEALTH INSURANCE 
PRODUCTS  
 
 
 
CHAPTER OUTLINE  
 
1. Introduction  
2. Scope Of Notice No: MAS 120  
3. Structure Of Notice No: MAS 120  
Appendix 13A – Notice No: MAS 120  
 
 
LEARNING OUTCOMES  
  
After studying  this chapter, you should be able to:  
▪ understand the objective of Notice No: MAS 120  
▪ know the types of products covered by this Notice and their definitions  
▪ understand and explain the mandatory requirements  for: 
- the disclosure requirements  for sales of : 
o A&H policies  
o life policies that contain A&H benefits  
- the advisory process requirements in respect of:  
o know -your -client  
o needs analysis  
o documentation and record keeping  
o switching  
- the additional disclosure requirements being adhered to by direct insurers  
▪ know about the non -mandatory best practice standards on information disclosure, 
provision of advice, and monitoring of switching for long -term A&H policies under this 
Notice  
 
 
 
 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   281  
Conten ts 
CHAPTER OUTLINE  ................................ ................................ ................................ . 280 
LEARNING OUTCOMES  ................................ ................................ ..........................  280 
1. INTRODUCTION  ................................ ................................ ...............................  282 
2. SCOPE OF NOTICE NO: MAS 120  ................................ ................................ ..... 282 
3. STRUCTURE OF NOTICE NO: MAS 120 ................................ .............................  282 
APPENDIX 13A  ................................ ................................ ................................ ........  285 
 
 


 
Health Insurance   
282 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 1. INTRODUCTION  
 
1.1 The Monetary Authority of Singapore (MAS) first issued  Notice No: MAS 120 – 
Disclosure And Advisory Process Requirements For Accident And Health (A&H) 
Insurance Products on 30 January 2004. The last amendment to MAS 120 was 
made on  1 June 20 22. 
 
 
2. SCOPE OF NOTICE NO: MAS 120  
  
2.1 This Notice comprises both mandatory requirements and best practice 
standards on the disclosure of information and provision of advice to policy 
owners for A&H policies and life policies that provide A&H benefits. This Notice 
is issued in accordance with S ections 67, 72 and 154(4) of the Insurance Act 
1966 . 
 
2.2 Generally, this Notice applies to all direct insurers, licensed or exempt financial 
advisers who provide advice and/or arranges A&H policies and life policies that 
provide A&H benefits. This Notice does  not apply where:  
(a) such policies are in respect of reinsurance of liabilities under insurance 
policies;  and  
(b) such policies provide that the A&H benefits are paid out only if the insured 
becomes totally and permanently disabled, as defined under that policy.  
 
 
3. STRUCTURE  OF NOTICE NO: MAS 120  
 
3.1 This Notice comprises the following:  
 
Part I – Mandatory Requirements  made up of:  
 
Division 1 : General Requirements For A&H Policies – No direct insurer should  
use the word “Shield” when naming A&H policy, unless that policy is a 
Medisave -approved policy.  
 
Division 1A : Disclosure Requirements For  A&H Policies – This covers the 
following:  
(a) General information about the A&H insurance intermediary (including its 
business name under which it conducts its insuranc e business, its 
business address and its telephone number) and status of an A&H 
insurance representative (including his name, the A&H insurance 
intermediary or intermediaries for which he acts);  
(b) Remuneration of the A&H insurance intermediary;  
(c) Conflict of interest;  
(d) Disclosure when providing advice, including :  
(i) nature and objective of the policy;  
(ii) details of the insurer;  
(iii) contractual rights and obligations;  
(iv) benefits of the policy;  

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1.


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Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   283  
(v) risks of the policy;  
(vi) provision on free -look period of the policy;  
(vii) claim on termination;  
(viii) warnings, exclusions and disclaimers;  
(e) Provisions and explanations of any benefit illustration, product summary, and 
group policy under A&H policies;  
(f) Marketing material; and  
(g) Telemarking and  direct marketing.  
 
Division 2 : Disclosure Requirements For Life Policies That Contain A&H Benefits – 
This specifies the regulatory  requirements by an A&H insurance intermediary and an 
A&H insurance representative of a licensed or exempt financial adviser, when 
providing advice and/or arrange life policies containing A&H benefits.  
 
Division 3 : Additional Disclosure Requirements For Direct Insurers – This covers:  
(a) meeting the industry standards on the preparation of a benefit illustration or a 
product  summary in respect of a policy that the direct insurer underwrites;  
(b) disclosure of relevant information in the respective documents for every 
Integrated Shield Plan ( IP) or non -IP;  
(c) required font size (Times New Roman 10 -point or larger) for product summa ry, 
statement, conditional offer letter or termination letter with standardised 
relevant statement of disclosures for any individual Medical Expense Insurance 
policy, as well as any A&H policy not being Medisave -approved policy; and  
(d) disclosing and explain ing the policy terms, including any addition, amendment 
or variation to be made in writing to the policy owner, at least 30 days before 
taking effect.  
 
Division 4 : Requirements On Provision Of Advice Relating To A&H Policies – This 
specifies that an A&H in surance intermediary who provides health policies to policy 
owners must comply with the requirements relating to the following aspects:  
(a) Reasonable basis for providing advice;  
(b) “Know -Your -Client”;  
(c) Needs analysis;  
(d) Documentation and record keeping; and  
(e) Switching of A&H Insurance policies.  
 
This Division shall not apply:  
(i) in circumstances where no recommendation is made, or where only factual 
information is provided with respect to any health policy; or  
(ii)   to any advice provided in respect of any ElderShield policy.  
 
Division 5 : Requirements On Provision Of Advice Rela ting To Life Policies That Contain 
A&H Benefits – This requires any A&H insurance intermediary or A&H insurance 
representative who is licensed or exempt financial adviser to comply with 
requirements relating to recommendations and provisions of advice as s et out in the 
Financial Advisers Act 2001  and its notices issued, including Notice No: MAS 120.  
 

 
Health Insurance   
284 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] Division 6 : Offences Relating To This Part – This specifies that any person who fails to 
comply with any requirement under any relevant paragraph of Notice No:  MAS 120 
shall be guilty of an offence punishable under Section 142(3) of the Insurance Act 1966 . 
 
Part II – Non-mandatory Best Practice Standards  
 
(1) Information Disclosure & Provision Of Advice – This specifies that an A&H 
insurance intermediary is expected  to meet disclosures of all product and 
marketing information given to policy owners.  
 
(2) Monitoring Of Switching For Long -Term A&H Policies – This requires the A&H 
insurance intermediary should ensure that the policy owner declares in writing 
whether he had been advised by the A&H insurance representative to switch 
policy.  
 
3.2 For details of this Notice and its compliance requirements, refer to Appendix  
13A which has been adapted in full  from the MAS Website.  
 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   285  
APPENDIX  13A 
Notice No     :        MAS 120  
Issue Date    :        30 January 2004  
 
Last revised on 1 June 2022 *   
 
DISCLOSURE AND ADVISORY PROCESS REQUIREMENTS FOR ACCIDENT AND 
HEALTH INSURANCE PRODUCTS  
 
Introduction  
 
1.


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This Notice is issued pursuant to sections 67, 72 and 154(4) of the Insurance Act 
1966 [“the Act”] and comprises both mandatory requirements and best p ractice 
standards on the disclosure of information and provision of advice to policy owners for 
accident and health policies and life policies that provide accident and health benefits.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
2. This Notice applies to — 
 
(a) any direct insurer licensed under the Act;  
 
(b) any licensed financial adviser or exempt financial adviser which provides 
any financial advisory service in respect of life policies;  
 
(c) any representative of a licensed financial adviser or an exempt financial 
adviser who provides any financial advisory service in respect of life 
policies;  
 
(d) any direct insurance broker or exempt direct insurance broker;  
 
(e) any perso n acting for a direct insurance broker or an exempt direct 
insurance broker;  
 
(f) any insurance agent operating under written agreement pursuant to 
section 64; or 
 
(g) any insurance agent who is not required to comply with section 64 
 
when he or she or it provides advice or arranges contracts of insurance or both, in 
respect of accident and health policies and life policies that provides accident and health 
benefits but does not apply where –  
 
(i) such policies are in respect of reinsurance of liabilities under 
insurance policies; and  
 
(ii) such policies provide that the accident and health benefits are paid 
out only if the insured becomes totally and permanently disabled, as 
defined under that policy.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
3. This Notice sets out the following in two parts:  
 
(a) Part I — Mandatory Requirements  

 
Health Insurance   
286 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] (i) Division 1: General requirements for accident and health policies  
 
(ii) Division 1A: Disclosure requirements for accident and health policies;  
 
(iii) Division 2: Disclosure requirements for life policies that contain 
accident and health benefits;  
 
(iv) Division 3: Additional disclosure requirements for direct  insurers;  
 
(v) Division 4: Requirements on provision of advice relating to accident 
and health policies;  
 
(vi) Division 5: Requireme nts on provision of advice relating to life 
policies that contain accident and health benefits;  
 
(vii) Division 6: Offences relating to this Part;  
 
(b) Part II — Non-mandatory Best Practice Standards.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2 015] 
 
4. This Notice shall come into effect on 1 April 2004.  
 
Definition  
 
5. For the purpose of this Notice:  
 
“accident and health insurance intermediary (hereinafter referred to as A&H 
insurance intermediary)” means —  
 
(a) a direct insurer;  
 
(b) a licensed financial adviser;  
 
(c) an exempt financial adviser;  
 
(d) a direct insurance broker; or  
 
(e) an exempt direct insurance broker,  
 
who provides advice on or arranges contracts of insurance or both, in respect of 
accident and health policies and life policies that provides accident and health benefits 
as an insurance intermediary;  
 
“accident and health insurance repr esentative (hereinafter referred to as A&H 
insurance representative) ” means a person who is —  
 
(a) employed by or who acts as an insurance agent for, a direct insurer;  
(b) employed by or who acts for, a direct insurance broker or an exempt direct 
insurance broke r; or 
(c) employed by or who acts as a representative of, a licensed financial adviser 
or exempt financial adviser,  
 
and provides advice on or arranges contracts of insurance or both, in respect 
of accident and health policies and life policies that provides accident and 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1.


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Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   287  
health benefits as an insurance intermediary, but does not include a person 
who is an A&H insurance i ntermediary;  
 
“additional private insurance coverage” has the same meaning as in regulation 
2 of the MediShield Life Scheme (Private Medical Insurance Scheme) 
Regulations  2015 ; 
  
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Not ice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
[Deleted by MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
“Central Provident Fund Board” means the Central Provident Fund Board 
constituted under section 3 of the Central Provident Fund Act  1953 ;  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
[Deleted by MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
[Deleted by MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
“exempt direc t insurance broker” means a person exempt from  registering as a 
direct insurance broker under section 92(1)(a) to ( f) of the  Act who has notified 
the Authority, in such manner as may be prescribed under  section 154(1), of his 
or her commencement of insuran ce broking business;  
 
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
“health policy” means an accident and health policy that is not a personal 
accident policy;  
 
“individual medical expense policy” means an accident and health policy, other 
than an integrated shield plan and a non -integrated shield plan —  
 
(a) where the policy  owner is an individual; and  
 
(b) the main purpose of the policy is to reimburse an insured for the medical 
costs incurred by him in seeking inpatient medical treatment;  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
“integrated shield plan” has the same meaning as in regulation 2 of the 
MediShield Life Scheme (Private Medical Insurance Scheme) Regulations  2015 ; 
  
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
“insured” i ncludes an intending insured;  
 
“medisave account” has the same meaning as section 2 of the MediShield Life 
Scheme Act 2015;  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 202 2] 
 
“Medisave -approved policy” means any,  integrated shield plan , non-integrated 
shield plan  or supplementary disability insurance policy ;  
 

 
Health Insurance   
288 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] [MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment No.


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4] [MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment No. 2) 2020, with effect from 1 October 2020]  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
“MediShield Life Component” has the same meaning as regulation 2 of the 
MediShield Life Scheme (Private Medical Insurance Scheme) Regulations  2015 ;  
 
[MAS Not ice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
“MediShield Life Scheme” means the Scheme established under section 3 of the 
MediShield Life Scheme Act 2015;  
 
[MAS Notice 120 (Am endment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
“Medisave Withdrawal Limits” means the respective withdrawal limits specified 
in regulation 5(1) of the MediShield Life Scheme (Private Medical Insurance 
Scheme) Regulations  2015 ;  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
“non -integrated shield plan” has the same meaning as in regulation 2 of the 
MediShield Life Scheme (Private Medical Insurance Scheme) Regulations  2015 ;  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
“personal accident policy ” means an accident and health policy where accident 
and health benefits are paid out only —  
 
(a) in the event of an injury to, or disability of, the insured as a result of 
accident;  
(b) on the death by accident of the insured; or  
(c) on the occurrence of a combinat ion of (a) and (b);  
 
“policy owner” includes an intending policy owner;  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
“representative” has the same meaning as in section 2 of the Financial Advisers 
Act 2001 [“the FA Act”];  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
“selected A&H insurance representative client” means a client of the A&H 
insurance intermediary who has p urchased a Medisave -approved policy through 
an A&H insurance representative who has been assigned a balanced scorecard 
grade B or worse under the remuneration framework set out under section 47 of 
the FA Act consecutively for two calendar quarters immediat ely preceding the 
quarter in which the representative closed the sale of the relevant Medisave -
approved policy on behalf of the A&H insurance intermediary;  
 
[MAS Notice 120 (Amendment) 2020, with effect from 13 April 2020]  
[MAS Notice 120 (Amendment) 2022 , with effect from 1 June 2022]  
 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1.


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Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   289  
“selected client” means any client who meets any two of the following criteria –  
(a) is 62 years of age or older;  
(b) is not proficient in spoken or written English;  
(c) has below GCE ‘O’ level or ‘N’ level certifications, or equivalent academic  
qualifications;  
 
[MAS Notice 120 (Amendment) 2020, with effect from 13 April 2020]  
 
“supplementary disability insurance policy” has the meaning given by regulation 2 
of the CareShield Life and Long -Term Care (Supplem ent Scheme) Regulations 2020  
 
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
“switching” includes terminating a policy and replacing it with another policy, and 
“switch” shall be construed accordingly;  
 
“upgrading” means varying the ter ms of an existing policy or terminating an 
existing policy to purchase a new policy with the same insurer for the purpose of 
having better benefits than that under the existing policy, and “upgrade” shall be 
construed accordingly.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
6. The expressions used in this Notice shall, except where expressly defined in this 
Notice or where the context otherwise requires, have the same respective meanings as 
in the Act.  
 
Sections 67 and 72 
 
7. For the purposes of section 67(1)(d) and (2)(e) of the Act, an A&H intermediary 
must  also disclose the material information set out in paragraphs 12 to 18, 20 to 22, and 
27(a) to (d).  
 
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
8. For the purposes of section 72 of the Act, the standards to be maintained by an 
insurance intermediary in the conduct of business relating to disclosure and advisory 
process include those set out in paragraphs 19, 23 to 25, 27(e), 30, 34 to 46, and 48.  
 
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
Representative of A&H Insurance Intermediary  
 
9. Unless otherwise specified, an A&H insurance intermediary shall ensure that all 
its A&H insurance representatives comply with any mandatory requi rement imposed 
on an A&H insurance intermediary in this Notice when the A&H insurance 
representatives are acting on behalf of the A&H insurance intermediary.  
 
Application to Direct Insurers  
 
10. Unless otherwise specified, this Notice applies to a direct insurer, when it 
provides advice or arranges contracts of insurance in respect of accident and health 
policies underwritten by it, as if it were an A&H insurance intermediary.  
 
[MAS Notice 120 (A mendment) 2015, with effect from 1 November 2015]  
 
 
 

 
Health Insurance   
290 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] Part I – Mandatory Requirements  
 
Division 1: General Requirements for Accident and Health Policies  
 
10A.  No direct insurer shall use the word “Shield” in the name, description or title of 
any accident and health policy issued by it unless that policy is a Medisave -approved 
policy.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
10B. Notwiths tanding paragraph 10A, a direct insurer may, prior to 1 November 2017, 
continue to use the word “Shield” in the name, description or title of any accident and 
health policy issued by it prior to 1 November 2015.  
 
[MAS Notice 120 (Amendment) 2015, with eff ect from 1 November 2015]  
 
Division 1A: Disclosure Requirements for Accident and Health Policies  
 
11. This Division sets out the minimum standard on disclosure to policy owners by 
A&H insurance intermediaries in relation to accident and health policies that a re 
mandatory.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
General information about the A&H insurance intermediary and status of an A&H 
insurance representative  
 
12.


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[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
General information about the A&H insurance intermediary and status of an A&H 
insurance representative  
 
12. An A&H insurance intermediary shall disclose to the policy owner in writing its 
business name under which it conducts its insurance business, its busin ess address 
and its telephone number.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
13. An A&H insurance representative shall disclose the following to the policy owner 
in writing:  
(a) his name;  
(b) the A&H insurance intermediary (or intermed iaries) for which he acts.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
14. Where there is a change to such information referred to in paragraphs 12 and 
13, an A&H insurance intermediary or an A&H insurance representative, as the case  
may be, shall inform a policy owner, in writing, of any change to such information in 
the next dealing right after the change, with the policy owner.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
15. An A&H insurance intermediary shall disclose in writing to a policy owner all 
remuneration, including any commission, fee and other benefit, that it has received or 
will be receiving for providing advice on, or arranging insurance contracts or both, in 
respect of any accident and health policy.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
Conflict of Interest  
 
16. An A&H insurance intermediary shall disclose, in writing, to its policy owners 
any actual or potential conflict of interest arising from any connection to or association 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   291  
with any insurer, including any material information or facts that may compromise its 
objectivity in advice provided by the A&H insurance intermediary.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
Disclosure when Providing Advice  
 
17. When dealing with a policy owner who is an individual in respect of any accident 
and health insurance policy, an A&H insurance intermediary shall disclose the following 
information to the policy owner:  
 
(a) Nature and objective of the policy  
 
The A&H insurance intermediary shall disclose and explain to the policy 
owner the nature and objective of the policy, including:  
 
(i) whether the policy is a health policy or a personal accident policy; and  
 
(ii) whether the policy seeks to reimburse health servi ces costs incurred 
by the insured, provide continuous income during disability or 
sickness, provide lump sum benefits on the occurrence of specified 
events, or a combination of these.  
 
(b) Details of the insurer  
 
In addition to disclosing to the policy owner the insurer underwriting the 
policy and its relationship with that insurer required under section 67(1)(a) 
and (b) of the Act, an A&H insurance intermediary must disclose to the 
policy owner the business addres s of the insurer.  
 
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
(c) Contractual rights and obligations  
 
The A&H insurance intermediary shall disclose and explain to the policy 
owner —  
 
(i) the party against which the policy owner may take action to enforce 
his rights with respect to the policy he has purchased;  
 
(ii) that he is responsible for the accuracy and completeness of the 
information given to the insurer when applying for the policy and 
when making a claim under the policy;  
 
(iii) that any mis -statement or non -disclosure of material facts may affect 
the validity of the policy; and  
 
(iv) the amount of, frequency with which, and period over which,  
payment is to be made in respect of the policy, incl uding whether the 
premium rate is guaranteed or non -guaranteed.  
 
(d) Benefits of the policy  
The A&H insurance intermediary shall disclose and explain to the policy 
owner the benefits of the policy, including —  
 
(i) the conditions under which payment of policy moneys are made;  
 

 
Health Insurance   
292 Copyright reserved by the Singapore College of Insurance Limited [Version 1.


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4] (ii) the conditions under which payment of policy moneys will not be 
made;  
 
(iii) the amount and timing of the payment of policy moneys;  
 
(iv) whether the payment of policy moneys are guaranteed or non -
guar anteed; and  
 
(v) any lien on the policy.  
 
(e) Risks of the policy  
 
The A&H insurance intermediary shall disclose and explain to the policy 
owner the risks to be borne by the insured or policy owner in the purchase 
of the policy, including:  
 
(i) whether the insurer may alter the terms of contract, and if so, what are the 
term s that may be altered and under what conditions would alterations be 
allowed; and  
(ii) whether the insurer may decline to renew the policy or unilaterally 
terminate the policy.  
 
(f) Provision on free -look period of the policy  
 
The A&H insurance intermediary shal l disclose and explain to the policy 
owner, where applicable —  
 
(i) the time frame for the policy owner to reconsider his purchase of an 
accident and health policy (“free -look provision”); and  
 
(ii) the terms and procedures for exercising the policy owner’s rights 
under the free -look provision.  
 
(g) Claim or termination  
 
The A&H insurance intermediary shall disclose and explain to the policy 
owner the procedures for, and restrictions on, a claim under his accident 
and health policy and the procedures and  charges for, and restrictions on, 
the termination of the policy.  
 
 
(h) Warnings, exclusions and disclaimers  
 
The A&H insurance intermediary shall disclose and explain to the policy 
owner all warnings, exclusions and disclaimers in relation to the product it  
has recommended to the policy owner.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
18. Where a benefit illustration or a product summary in respect of the accident and 
health policy prepared by the insurer or the A&H insurance intermediary is given to the 
policy owner, the A&H insurance intermediary shall furnish the policy owner with, and 
explain to the policy owner the content of any such benefit illustration or product 
summary.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   293  
19. Where the A&H insurance intermediary prepares a benefit illustration or a 
product summary for  a policy owner, it shall be prepared according to industry 
standards, if any, set for insurers.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
20. In the case of a personal accident policy, the A&H insurance intermediary shall 
ensure t hat the policy owner is aware that policy moneys shall be paid as a result of 
accident only.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
21. When dealing with a person who is, or would be the policy owner of a group 
policy, in respec t of any accident and health policy, an A&H insurance intermediary 
shall disclose the following information to the insured:  
 
(a) information described in paragraph 17;  
 
(b) duration of coverage; and  
 
(c) whether premium paid under the policy qualifies for any special tax 
treatment, and if so, the nature of such incentive.  
 
22. For a group policy, where any person insured under the policy is liable to pay 
any premium (whether in monetary form or otherwise), th e A&H insurance 
intermediary shall disclose to every person in the group information as if it is dealing 
with them individually.  
 
Marketing Material  
 
23. An A&H insurance representative shall only use marketing materials which —  
 
(a) with respect to an integrated shield plan, is approved by the insurer issuing 
the policy; and  
 
(b) with respect to an accident and health policy, is approved by the A&H 
insurance intermediary for which an A&H insurance representative acts for.  
 
[MAS Notice 1 20 (Amendment) 2015, with effect from 1 November 2015]  
 
Telemarketing and Direct Marketing  
 
24.


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[MAS Notice 1 20 (Amendment) 2015, with effect from 1 November 2015]  
 
Telemarketing and Direct Marketing  
 
24. Where an A&H insurance intermediary engages in any marketing of accident and 
health policies which are not Medisave -approved policies over the telephone in a 
manne r that is designed to solicit and close a sale, it shall —  
 
(a) where no advice is provided, communicate to the call recipient a warning 
that—  
 
(i) the call recipient may wish to seek advice from an A&H insurance 
intermediary before making a commitment to purchase the policy; 
and  
(ii) in the event that the call recipient chooses not to seek advice from an 
A&H insurance intermediary, he should consider whe ther the policy 
in question is suitable for him; and  
 
 

 
Health Insurance   
294 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] (b) maintain a record of all conversations made over the phone sufficient for 
the purpose of conducting audit checks where necessary.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
24A.  An A&H insurance intermediary shall not close a sale of any Medisave -approved 
policy over the telephone where it has engaged in the marketing of the Medisave -
approved policy over the telephone. Where an A&H insurance intermediary engages in 
the marketing of any Medisave -approved policy over the telephone in a manner that is 
designed to solicit a sale, it shall —  
 
(a) communicate clearly to the call recipient that it is calling only to provide 
information and not to advise the call recipient on the Medisave -approved 
policy or sell that policy over the telephone;  
 
(b) follow the script approved by the insurer issuing the po licy, in providing 
any information relating to the policy; and  
 
(c) maintain a record of all conversations made over the phone sufficient for 
the purpose of conducting audit checks where necessary.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 Novemb er 2015]  
 
Temporary Exemption  
  
24B. Paragraph 24A of this Notice does not apply for the period from 13 April 2020 to 
30 September 2022  (both dates inclusive).  
 
[MAS Notice 120 (Amendment) 2020, with effect from 13 April 2020]  
[MAS Notice 120 (Amendment No. 2) 2020, with effect from 1 October 2020]  
[MAS Notice 120 (Amendment) 2021, with effect from 1 October 2021]   
 
24BA. Where an A&H insurance intermediary enga ges in any marketing of any 
Medisave -approved policy over the telephone in a manner that is designed to solicit, 
but not close a sale of the Medisave -approved policy over the telephone, whether 
advice is provided on the Medisave -approved policy or not, dur ing the period 
mentioned in paragraph 24B, it shall – 
 
(a) follow the script approved by the insurer issuing the policy, in providing any 
information relating to the policy; and 
 
(b) maintain a record of all conversations made over the phone sufficient for the 
purpose of conducting audit checks where necessary.  
 
[MAS Notice 120 (Amendment) 2020, with effect from 13 April 2020]  
 
24BB. Where an A&H insurance intermediary engages in any marketing of any 
Medisave -approved policy over the telephone in a manner that is designed to solicit 
and close a sale of the Medisave -approved policy over the telephone, whether advice 
is provided on  the Medisave -approved policy or not, during the period mentioned in 
paragraph 24B, it shall —  
 
(a) where no advice is provided by the A&H insurance intermediary on the 
policy, communicate clearly to the call recipient a warning that –  
 
(i) the call recipient may  wish to seek advice from an A&H insurance 
intermediary before making a commitment to purchase the policy; and  

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1.


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Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   295  
(ii) in the event that the call recipient chooses not to seek advice from an 
A&H insurance intermediary, the call recipient should consider 
whether t he policy in question is suitable for him;  
 
(b) follow the script approved by the insurer issuing the policy, in providing 
any information relating to the policy;  
 
(c) conduct client call -back with every selected client or selected A&H 
insurance representative client whom the A&H insurance intermediary had 
closed the sale of any Medisave -approved policy with, within the time 
frame for the client to reconsider his purchas e of that policy as set out in 
the terms of the policy in accordance with regulation 8 of the Insurance 
(General Provisions) Regulations; and  
 
(d) maintain a record of all conversations made over the phone sufficient for 
the purpose of conducting audit checks  where necessary.  
[MAS Notice 120 (Amendment) 2020, with effect from 13 April 2020]  
 
25. Where an A&H insurance intermediary engages in the marketing of accident and 
health policies using direct response advertising communications through any 
medium, includin g mail, print, TV, radio and electronic media, that is designed to solicit 
and close a sale, it shall include, in all its marketing materials, a prominent warning 
that—  
 
(a) the policy owner may wish to seek advice from an A&H insurance 
intermediary before pu rchasing the policy;  
 
(b) in the event that the policy owner chooses not to seek advice from an A&H 
insurance intermediary, he should consider whether the type of policy in 
question is suitable for him; and  
 
(c) in the event that the policy owner decides that the policy is not suitabl e 
after purchasing the policy, he may terminate the policy in accordance with 
the free -look provision, if any, and the insurer may recover from the policy 
owner any expense incurred by the insurer in underwriting the policy.  
 
[MAS Notice 120 (Amendment) 2 015, with effect from 1 November 2015]  
 
Division 2: Disclosure Requirements for Life Policies that Contain Accident and Health 
Benefits  
 
26. Any A&H insurance intermediary who is a licensed financial adviser or an 
exempt financial adviser and any A&H insurance representative who is a representative 
of such a licensed financial adviser or an exempt financial adviser, providing any 
financial advi sory service in respect of life policies is to comply with the disclosure 
requirements set out in the FA Act.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
27. In addition to those requirements, an A&H insurance intermediary or an A&H 
insurance representative must  comply with the following paragraphs of this Notice 
(with the necessary modifications) when it provides advice to or arranges  contracts of 
insurance or both, in respect of life policies that contain accident and health benefi ts:  
 
(a) paragraph 17(a), (c)(iv), (d)(i), (d)(ii), (e), (f), (g) and (h);  
 
(b) paragraph 20;  
 

 
Health Insurance   
296 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] (c) paragraph 21(b) and (c);  
 
(d) paragraph 22; and  
 
(e) paragraph 24.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
Division 3: Additional Disclosure Requirements for Direct Insurers  
 
28. When a direct insurer prepares a benefit illustration or a product summary for 
policies that it underwrites, it shall be prepared according to industry standards, if any.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
28A.


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[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
28A.  For every integrated shield plan or non -integrated shield plan which a direct 
insurer issues, where the direct insurer provides the policy owner with any of the 
following documents, it shall disclose the following information in the respective 
documents:  
 
(a) the inform ation specified in Part A -1 of Appendix A in any product 
summary that the insurer issues for the policy;  
(b) the information specified in Part A -2 of Appendix A in any proposal form 
that the insurer issues for the policy;  
(c) the information specified in PartA -3 of Appendix A, in any acceptance letter 
that the insurer issues for the policy;  
(d) the information specified in Part A -4 of Appendix A, in any conditional letter 
of offer that the insurer issues for the policy;  
(e) the information specified in Part A -5 of Appendix A, in any premium 
notification letter that the insurer issues for the policy;  
(f) the information specified in Part A -6 of Appendix A, in any termination 
letter that the insurer issues for the policy; and  
(g) the information specified in Part A -7 of Appendix A, in any claims 
settlement letter that the insurer issues for the policy.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
28B. Where a direct insurer provides the policy owner who is an indiv idual who is a 
citizen or permanent resident of Singapore with a conditional letter of offer or 
termination letter for any individual medical expense policy it issues, it shall include, in 
a font size Times New Roman 10 -point or larger, in the conditional letter of offer or the 
termination letter, as the case may be, the statements as set out in Appendix B.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 30 June 2016]  
 
28C. Where a direct insurer provides the policy owner with a product summary of any 
accid ent and health policy it issues which is not a Medisave -approved policy, it shall 
include, in a font size Times New Roman 10 -point or larger, in the product summary, 
the statement as set out in Appendix C.  
 
[MAS Notice 120 (Amendment) 2015, with effect fr om 30 June 2016]  
 
28D.  Where a direct insurer provides the policy owner with a product summary of any 
renewable short term accident and health policy it issues, it shall include, in a font size 
Times New Roman 10 -point or larger, in the product summary, the statement as set out 
in Appendix D.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 30 June 2016]  

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   297  
29. Where the accident and health policy for a policy owner who is an individual 
provides that the insurer may vary, amend, or add to the terms of the contract of 
insurance in th e duration of the contract, the direct insurer shall:  
 
(a) disclose the existing terms of the contract;  
 
(b) disclose and explain the new terms of the contract;  
 
(c) disclose and explain the manner in which the policy owner may accept the 
new terms or the circumstances under which the policy owner will be 
deemed to have accepted the new terms; and  
 
(d) furnish the information under (a), (b), and (c) to the policy owner in  writing 
at least 30 days before the variation, amendment or addition takes effect.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
Division 4: Requirements on Provision of Advice Relating to Accident and Health 
Policies  
 
30. No A&H insu rance intermediary shall provide any advice with respect to any 
health insurance policy to a person who may reasonably be expected to rely on the 
advice if the A&H insurance intermediary does not have a reasonable basis for 
providing the advice to the pers on. 
 
31.


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31. For the purposes of paragraph 30, an A&H insurance intermediary does not have 
a reasonable basis for providing an advice to a person unless —  
 
(a) he has, for the purposes of ascertaining that the advice is appropriate, 
having regard to the information posses sed by him concerning the 
objectives, financial situation and particular needs of the person, given 
such consideration to, and conducted such investigation of, the subject -
matter of the advice as is reasonable in all the circumstances; and  
 
(b) the advice is based on the consideration and investigation referred to in 
sub-paragraph (a).  
32. In this Division, a reference to the provision of advice is a reference to the 
provision of advice either expressly or by implication and the expression “providing 
advice” shall  be construed accordingly.  
 
This Division does  not apply –  
 
33. in circumstances where no recommendation is made or where only factual 
information is provided with respect to any health policy . 
 
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
34. An A&H insurance intermediary that is involved in providing advice on health 
policies to policy owners shall comply with the requirements set out in this Division in 
relation to the following aspects:  
 
(a) “Know -Your -Client”;  
 
(b) needs analysis; and  
 
(c) documentation and record keeping.  
 

 
Health Insurance   
298 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] [MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
“Know -Your -Client”  
 
35. In order for an A&H insurance intermediary to provide an advice to an individual 
that takes into account a policy owner’s investme nt objectives, financial situation and 
particular needs, the A&H insurance intermediary shall collect and document the 
following information from the policy owner:  
 
(a) the objectives of the policy owner, including —  
 
(i) the event, or events, which financial impact the insured is seeking 
protection from; and  
(ii) the nature of benefits payment that the policy owner is seeking, 
whether it is a lump sum payment or in periodical payments, and 
whether it relates to cost actually i ncurred by the policy owner or 
insured; and  
(iii) the class of hospital ward that the insured is seeking to stay in;  
 
(b) the employment status of the policy owner;  
 
(c) the financial situation of the policy owner, including assets, liabilities, cash 
flow and income;   
 
(d) the source and amount of the policy owner’s regular income;  
 
(e) the financial commitments of the policy owner;  
 
(f) any existing health policy of the insured, including any policy moneys 
arising from any insurance scheme established and maintained by the 
Central Provident Fund Board;  
 
(g) any medical conditions that the insured may have; and  
 
(h) for any recommendation made in respect of a health policy that intends to 
include the policy owner’s dependants as the insureds, the information 
listed in (a) to (e) for such dependants.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
36. In order for an A&H insurance intermediary to provide advice in relation to a 
group insurance policy that takes into account a policy owner’s investment objectives, 
financial situation and particular needs, the A&H insurance intermediary shall collect 
and document the following information from the policy owner:  
 
(a) the objectives of the policy owner, including  
 
(i) the financial impact of any event for which the policy owner is seeking 
protection for members of the group;  
 
(ii) the mode of policy moneys payment that the insured is seeking, 
whether it is a lump sum payment or in periodical payments, and 
whether it relates to cost actually incurred by the policy owner or 
insured; and  
 
(iii) the class of hospital ward that the insured is  seeking to stay in.  
 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   299  
(b) the size and composition of the group, including a breakdown by gender, 
age, income, occupation;  
 
(c) the claims history of the group; and  
 
(d) any medical conditions that members of the group may have.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
37.


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[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
37. An A&H insurance intermediary shall highlight the following in writing to its 
policy owner:  
 
(a) the information provided by the policy owner will be the basis on which 
the advice will be made; and  
(b) any inaccurate or incomplete information provided by the policy owner 
may affect the suitability of the advice.  
 
[MAS Notice 120 (Amendment) 2015, with e ffect from 1 November 2015]  
 
Needs Analysis  
 
38. An A&H insurance intermediary shall analyse the information provided by the 
policy owner and identify the type of policy that is suitable for the insured based on the 
information obtained from the policy owner.   
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
39. Where the A&H insurance intermediary is unable to identify a suitable policy, it 
shall inform the policy owner accordingly.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
40. An A&H insurance intermediary shall explain to its policy own er the basis for its 
advice. The basis on which the A&H insurance intermediary is providing the advice to 
the policy owner shall be documented.  
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
41. Where a policy owner does not want to:  
 
(a) provide any information requested by the A&H insurance intermediary in 
accordance with paragraph 35 or 36; or  
 
(b) accept the advice of the A&H insurance intermediary and chooses to 
purchase another health policy which is not advised by the A&H insurance 
inter mediary,  
 
the A&H insurance intermediary may proceed with the policy owner's request, but it 
shall document the decision of the policy owner and inform the policy owner that it is 
the policy owner’s responsibility to ensure the suitability of the type of policy selected.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
42. Where a policy owner chooses not to receive any advice from an A&H insurance 
intermediary, the A&H insurance intermediary shall properly document the policy 
owner’s decision.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 

 
Health Insurance   
300 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] Documentat ion and Record Keeping  
 
43. An A&H insurance intermediary shall furnish to its policy owner a document 
containing the following when providing an advice in respect of a health policy to the 
policy owner —  
 
(a) a summary of the information gathered by the A&H insu rance intermediary 
pursuant to paragraph 35 or 36; and  
 
(b) any advice provided to the policy owner by the A&H insurance 
intermediary and the basis for the advice,  
 
and, where applicable, a statement that the policy owner does not want to —  
 
(i) provide any information requested by the A&H insurance 
intermediary in accordance with paragraph 35 or 36;  
 
(ii) accept the advice of the A&H insurance intermediary and has chosen 
to purchase another health policy which is not that advised by the 
A&H insurance intermediary ; or  
 
(iii) receive any advice from the A&H insurance intermediary,  
 
before the policy owner signs on the application form for the purchase of a health policy 
or gives h is consent for the withdrawal or surrender of a health policy.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
Switching of Accident and Health Insurance Policies  
 
44. An A&H insurance intermediary shall not provide advice to a policy owner who 
is an individual to switch from one accident and health policy (referred to as “original 
policy”) to another accident and health policy (referred to as “replacement policy”) in 
a manner that would be detrimental to the insured.


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In considering whether a switch is 
detrimental, the Authority shall have regard to a number of factors, including —  
(a) whether the policy owner suffers any penalty for terminating the original 
policy;  
 
(b) whether  the policy owner will incur any transaction cost without gaining 
any real benefit from such a switch;  
 
(c) whether the replacement policy confers a lower level of benefit at a higher 
cost or same cost to the insured, or the same level of benefit at a higher 
cost; and  
 
(d) whether the replacement policy is less suitable for the insured.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
45. An A&H insurance intermediary that provides an advice to a policy owner to 
switch from one accident and heal th policy to another shall comply with the 
requirements in relation to provision of advice set out in this Division.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
46. An A&H insurance intermediary shall disclose, in writing, to a policy owner —  
 
(a) any fee or charge the policy owner would have to bear; and  

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   301  
(b) the changes in level of benefits,  
 
if he were to switch from one accident and health policy to another, in order to  ensure 
that the policy owner is able to make an informed decision on whether to switch.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
Division 5: Requirements on Provision of Advice Relating to Life Policies that Contain 
Accident and Health Benefits  
 
47. Any A&H insurance intermediary who is a licensed financial adviser or an 
exempt financial adviser and any A&H insurance representative who is a representative 
of such a licensed financial adviser or an exempt financial adviser, provid ing any 
financial advisory service in respect of life policies is to comply with requirements 
relating to recommendations and provision of advice set out in the FA Act and Notices 
issued thereunder.  
 
48. In addition to these requirements, an A&H insurance intermediary or A&H 
insurance representative shall comply (with necessary modifications) with paragraphs 
35(a), (f), (g), (h), 36 and 43 of this Notice when it provides advice in respect of life 
policies that contain accident and health benefits.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
Division 6: Offences relating to this Part  
 
49. [Deleted by MAS Notice 120 (Amendment) 2015, with effect from 1 November 
2015]  
 
50. [Deleted by MAS Notice 120 (Amendment) 2015, with effect from 1 November 
2015]  
 
51. Any person who fails to comply with any requirement under any paragraph in 
Part I of this Notice shall be guilty of an offence punishable under section 142(3)  of the 
Act.  
 
[MAS Notice 120 (Amendment) 2022, with effect from 1 June 2022]  
 
Part II – Non-mandatory Best Practice Standards  
 
Information Disclosure and Provision of Advice  
 
52. The best practice standards which an A&H insurance intermediary is expected 
to meet in all product informati on disclosures and information (including marketing 
materials) given to policy owners are as follows.  
(a) Information disclosed to policy owners in any advertisement or publicity 
material in any media should be presented in plain language, and in a 
manner tha t is easy for the policy owner to understand.  
 
(b) Jargon or technical terms used should be clearly explained to policy 
owners.  
 
(c) Information disclosed to policy owners should not be limited to seeking 
compliance with requirements the Act and this Notice, but should accord 
with industry best practices. In addition, the information provided should 
be sufficient to help policy owners m ake an informed decision.  
 

 
Health Insurance   
302 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] (d) Warning and important information such as the nature and objective of the 
product, risks of the product, fees and charges, and contractual  
rights and obligations of policy owners and the insurer, should be 
prominently presented  and clearly explained.  
 
(e) Information disclosed to policy owners should not be ambiguous in 
language or presentation.


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(e) Information disclosed to policy owners should not be ambiguous in 
language or presentation.  
 
(f) Information relating to accident and health insurance products should be 
disclosed in an objective and unbiased manner.  
 
(g) Where an opini on is expressed, there should be a reasonable basis for 
expressing the opinion and it should be unambiguously stated that it is a 
statement of opinion.  
 
(h) Documents to be given to policy owners should be kept up -to-date.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
53. Where an A&H insurance intermediary provides an advice on or arranges 
contracts of insurance in respect of accident and health policy, it is expected to comply 
with any industry standard and/or guideline  on needs -based sales process.  
 
Monitoring of switching for long -term accident and health policies  
 
54. To facilitate the monitoring of switching for long -term accident and health 
policies that may be detrimental to an insured’s interests by an A&H insurance  
representative, the A&H insurance intermediary should ensure that the policy owner 
declares in writing whether he had been advised by the A&H insurance representative 
to switch policy. For the avoidance of doubt, such a declaration should also be made in 
the following situations:  
 
(a) the switch is to another accident and health policy with different accident 
and health benefits as the policy that was terminated; and  
(b) the policy that was terminated was purchased from another A&H insurance 
intermediary.  
 
[MAS  Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
55. If the policy owner declares that he had been advised by an A&H insurance 
representative to switch, the A&H insurance intermediary should ensure that the policy 
owner makes a declaration on –  
 
(a) whether the representative has drawn his attention to the costs and 
possible disadvantages associated with the switch; and  
 
(b) whether he wishes to proceed with the switch notwithstanding that the 
fees, charges or disadvantages that may arise from the switch could 
outweigh any potential benefits.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
56. Where the poli cy owner declares that the A&H insurance representative has 
recommended a switch, the A&H insurance intermediary should ensure that the 
supervisor of the A&H insurance representative reviews the switching 
recommendation, and indicates in writing, whether h e agrees with the recommendation 
made and if not, the actions that have been taken to rectify the situation. In considering 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   303  
whether a switch is appropriate, the supervisor should take into account the factors 
stated in paragraph 44.  
 
[MAS Notice 120 (Amen dment) 2015, with effect from 1 November 2015]  
 
57. An A&H insurance intermediary should institute controls, processes and 
procedures to effectively monitor and track the switching of long -term accident and 
health plans, including but not limited to the follow ing –  
 
(a) tracking the volume of switches so as to identify any A&H insurance 
representatives with an unusually high volume of switching transactions;  
 
(b) putting in place procedures to ensure that each switch recommended by 
an A&H insurance representative is reviewed  by a supervisor from the A&H 
insurance intermediary for appropriateness; and  
 
(c) implementing procedures and controls to identify any unusual trends in 
switching transactions.  
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
58. Where an A&H insurance intermediary detects a switch that is not declared by 
the policy owner, the A&H insurance intermediary should ensure that the supervisor of 
the A&H insurance representative reviews the switch and indicates in writing whether 
he agree s with the recommendation made, if any, and if not, the actions that have been 
taken to rectify the situation. In considering whether a recommended switch is 
appropriate, the supervisor should take into account the factors stated in paragraph 44.  
 
[MAS No tice 120 (Amendment) 2015, with effect from 1 November 2015]  
 
59. An A&H insurance intermediary should ensure that the back -end controls, 
processes and procedures implemented are commensurate with the A&H insurance 
intermediary’s nature of business and risks.


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An A&H insurance intermediary should ensure that the back -end controls, 
processes and procedures implemented are commensurate with the A&H insurance 
intermediary’s nature of business and risks.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 

 
Health Insurance   
304 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] APPENDIX A: Information to be included in the respective documents for integrated 
shield plans and non -integrated shield plans  
 
A-1: Information to be disclosed in the product summary  
 
Comparison of Benefits  
1. The insurer shall –  
 
(a) disclose that an integr ated shield plan comprises a MediShield Life 
Component and the additional private insurance coverage;  
 
(b) disclose that the final payout, in the event of hospitalisation or medical 
treatment, will comprise both the MediShield Life Component payout and 
the integrated shield plan payout, where applicable; and  
 
(c) provide a comparison of the benefits provided by th e MediShield Life 
Scheme and the integrated shield plan.  
 
Breakdown of standard premium rates  
2. The insurer shall provide a breakdown of the premiums payable for all age bands 
on the basis that the insured does not have any pre -existing condition at the ti me that 
the product summary is prepared in respect of --  
 
(a) a citizen or permanent resident of Singapore insured under an integrated 
shield plan; and  
 
(b) a foreigner insured under a non -integrated shield plan.  
 
The insurer shall also include information on the applicable Medisave Withdrawal Limits 
and cash outlay. Where the plan is an integrated shield plan, the insurer shall ensure that 
the breakdown of premiums payable shows separately the premiums payable for the 
MediShield Life Component and the additional private insurance coverage.  
 
Risks and limitations of switching or upgrading  
3. The insurer shall highlight the risks and limitations of —  
 
(a) switching the integrated shield plan issued by the insurer to that i ssued by 
another insurer; and  
 
(b) upgrading the integrated shield plan.  
 
Option to downgrade an existing integrated shield plan  
4. The insurer shall highlight that, where the policy owner has concerns on 
affordability, the policy owner has the option to switch to another integrated shield plan 
with a lower coverage but more affordable plan or, terminate his integrated shield plan. 
Whe re the insured is a citizen or permanent resident of Singapore, the insurer shall 
inform the policy owner that the insured will continue to be covered by the MediShield 
Life Scheme, even if the policy owner terminates the insured’s existing integrated shie ld 
plan.  
 
 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   305  
A-2: Information to be disclosed in the proposal form  
Monies in Medisave account  
5. The insurer shall ensure that the policy owner declares, before he purchases any 
integrated shield plan issued by the insurer, that he has received advice from his A&H 
insurance representative to consider the policy owner’s long -term financial commitment 
to pay the premiums for an integrated shield plan and, that the policy owner should have 
sufficient monies in his Medisave account or sufficient means to pay the MediShield Life 
Scheme premiums on an ongoing basis.  
 
Risks and limitations of switching or up grading  
6. Where the policy owner has indicated to the insurer that he intends to switch or 
upgrade the policy owner’s existing integrated shield plan, the insurer shall ensure that 
the policy owner declares that the policy owner’s A&H insurance representati ve has 
highlighted to the policy owner the risks and limitations of —  
 
(a) switching the integrated shield plan issued by the insurer to that issued by 
another insurer; or  
 
(b) upgrading the integrated shield plan.  
 
A-3: Information to be disclosed in the accep tance letter  
 
Risks and limitations of switching or upgrading  
7. Where the policy owner has indicated to the insurer that he intends to switch or 
upgrade the policy owner’s existing integrated shield plan, the insurer shall highlight to 
the policy owner the risks and limitations of —  
 
(a) switching the integrated shield pla n issued by the insurer to that issued by 
another insurer; or  
 
(b) upgrading the integrated shield plan.  
 
Start of policy coverage  
8.


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Start of policy coverage  
8. Where the inception date of the policy is after the issuance of the acceptance letter, 
the insurer shall state that –  
 
(a) the policy commences on the inception date of the policy and not on the date 
of the acceptance letter;  
 
(b) the policy inception date will be reflected in the policy schedule, which will 
be sent to the policy owner after the issuance of the policy; and  
 
(c) where the inception date of the policy is dependent on the successful 
deduction of monies from the policy own er’s medisave account, the insurer 
shall also state that the policy schedule will be sent to the policy owner upon 
the successful deduction of monies from the policy owner’s medisave 
account.  
 
 
 
 

 
Health Insurance   
306 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] A-4: Information to be disclosed in the conditional letter of offer  
Breakdown of premiums payable for insured  
 
9. The insurer shall, in respect of any integrated shield plan --  
 
(a) provide a breakdown of the premiums payable for the MediShield Life 
Component and the additional private insurance coverage;  
 
(b) a further breakdown of the premiums payable for the MediShield Life 
Component to reflect any applicable government subsidy, any p remium 
rebate and any additional premiums for serious pre -existing conditions;  
 
(c) provide a further breakdown of the premiums for additional private 
insurance coverage to reflect any rebates or any loading imposed by the 
insurer; and  
 
(d) indicate the respecti ve amounts payable from the policy owner’s medisave 
account and cash outlay, where applicable.  
 
10. The insurer shall, in respect of any non -integrated shield plan, provide a 
breakdown of the premiums payable to reflect any rebates or any loading imposed by 
the insurer. The insurer shall indicate the respective amounts payable from the policy 
owner’s medisave account and cash outlay, where applicable.  
 
Medisave Withdrawal Limits  
11. The insurer shall provide information on the Medisave Withdrawal Limits 
applicab le for –  
 
(a) the MediShield Life Component of an integrated shield plan;  
 
(b) the additional private insurance coverage of an integrated shield plan, in the 
case where the insured is a citizen or permanent resident of Singapore; or  
 
(c) the non -integrated shield plan, in the case where the insured is a foreigner.  
 
Risk-loading factor and standard premium rates  
12. Where an insurer offers a policy which provides benefits for any medical 
conditions that would otherwise be excluded, for additional premiums, the insurer shall 
indicate the risk -loading factor to be applied to the premiums on t he basis that the policy 
owner does not have any pre -existing condition.  
 
13. The insurer shall provide a breakdown of the premiums payable for all age bands 
on the basis that the policy owner does not have any pre -existing condition at the time 
that the prod uct summary is prepared in respect of –  
 
(a) a citizen or permanent resident of Singapore insured under an integrated 
shield plan; and  
 
(b) a foreigner insured under a non -integrated shield plan.  
 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   307  
The insurer shall also include information on the applicable Medisave Withdrawal Limits 
and cash outlay. Where the plan is an integrated shield plan, the insurer shall ensure that 
the breakdown of premiums payable shows separately the premiums payable for the 
MediShield Life Component and the additional p rivate insurance coverage.  
 
Risks and limitations of switching or upgrading  
14. Where the policy owner has indicated to the insurer that he intends to switch or 
upgrade the policy owner’s existing integrated shield plan, the insurer shall highlight to 
the policy owner the risks and limitations of —  
 
(a) switching the integrated shield pla n issued by the insurer to that issued by 
another insurer; or  
 
(b) upgrading the integrated shield plan.  
 
MediShield Life coverage  
15. Where the insured is a citizen or permanent resident of Singapore, the insurer 
shall disclose that –  
 
(a) the integrated shield plan comprises a MediShield Life Component; and  
 
(b) if the policy owner does not purchase the integrated shield plan, the 
MediShield Life Scheme will continue to provide lifetime cover to the 
insured, without excluding any existing medi cal condition.  
 
Start of policy coverage  
16.


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Start of policy coverage  
16. Where the inception date of the policy is after the issuance of the acceptance letter, 
the insurer shall state that –  
 
(a) the policy commences on the inception date of the policy and not on the date 
of the acceptanc e letter;  
 
(b) the policy inception date will be reflected in the policy schedule, which will 
be sent to the policy owner after the issuance of the policy; and  
 
(c) where the inception date of the policy is dependent on the successful 
deduction of monies from th e policy owner’s medisave account, the insurer 
shall also state that the policy schedule will be sent to the policy owner upon 
the successful deduction of monies from the policy owner’s medisave 
account.  
 
A-5: Information to be disclosed in the premium no tification letter  
MediShield Life coverage  
17. Where the insured is a citizen or permanent resident of Singapore, the insurer 
shall disclose that –  
 
(a) the integrated shield plan comprises a MediShield Life Component; and  
(b) if the policy owner does not purchase the integrated shield plan, the 
MediShield Life Scheme will continue to provide lifetime cover to the 
insured, without excluding any existing medic al conditions.  
 

 
Health Insurance   
308 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] Option to downgrade an existing integrated shield plan  
18. The insurer shall highlight that, where the policy owner has concerns on 
affordability, the policy owner has the option to switch to another integrated shield plan 
with a lower covera ge but more affordable plan or, terminate his integrated shield plan. 
Where the insured is a citizen or permanent resident of Singapore, the insurer shall 
inform the policy owner that the insured will continue to be covered by the MediShield 
Life Scheme, e ven if the policy owner terminates the insured’s existing integrated shield 
plan.  
 
List of policies due for renewal  
19. The premium notification letter shall include a list of the policies issued by the 
insurer that are purchased by the policy owner, at leas t one month before the date of 
renewal of each policy. The insurer shall, in respect of any integrated shield plan –  
 
(a) provide a breakdown of the premiums payable for the MediShield Life 
Component and the additional private insurance coverage;  
 
(b) provide a further breakdown of the premiums payable for the MediShield 
Life Component to reflect any applicable government subsidy;  
 
(c) indicate where there are exclusions imposed on the insured in the policy; 
and  
 
(d) indicate the respective amounts payable fr om the policy owner’s medisave 
account and cash outlay, where applicable.  
 
The insurer shall, in respect of any non -integrated shield plan –  
 
(a) indicate where there are exclusions imposed on the insured in the policy; 
and  
 
(b) indicate the respective amounts payable from the policy owner’s medisave 
account and cash outlay, where applicable.  
 
Breakdown of premiums payable for insured  
20. The insurer shall, in respect of any integrated shield plan — 
 
(a) provide a breakdown of the premiums payable for the MediShield Life 
Component and the additional private insurance coverage;  
 
(b) a further breakdown of the premiums payable for the MediShield Life 
Component to reflect any applicable government subsidy, any p remium 
rebate and any additional premiums for serious pre -existing conditions;  
 
(c) provide a further breakdown of the premiums for additional private 
insurance coverage to reflect any rebates or any loading imposed by the 
insurer; and  
 
(d) indicate the respecti ve amounts payable from the policy owner’s medisave 
account and cash outlay, where applicable.  
 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   309  
21. The insurer shall, in respect of any non -integrated shield plan, provide a 
breakdown of the premiums payable to reflect any rebates or any loading imposed by 
the insurer. The insurer shall indicate the respective amounts payable from the policy 
owner’s medisave account and cash outlay, where applicable.  
 
Medisave Withdrawal Limits  
22. The insurer shall provide information on the Medisave Withdrawal Limits 
applicab le for -  
 
(a) the MediShield Life Component of an integrated shield plan;  
 
(b) the additional private insurance coverage of an integrated shield plan, in the 
case where the insured is a citizen or permanent resident of Singapore; or  
 
(c) the non -integrated shield plan, in the case where the insured is a foreigner.  
 
Breakdown of standar d premium rates  
23.


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Breakdown of standar d premium rates  
23. The insurer shall provide a breakdown of the premiums payable for all age bands 
on the basis that the policy owner does not have any pre -existing condition at the time 
that the product summary is prepared in respect of –  
 
(a) a citizen or per manent resident of Singapore insured under an integrated 
shield plan; and  
 
(b) a foreigner insured under a non -integrated shield plan.  
 
The insurer shall also include information on the applicable Medisave Withdrawal Limits 
and cash outlay. Where the plan is an integrated shield plan, the insurer shall ensure that 
the breakdown of premiums payable shows separately the premiums payable for the 
MediShield Life Component and the additional private insurance coverage.  
 
A-6: Information to be disclosed in the termination letter  
 
Risks and limitations of switching or upgrading  
24. The insurer shall highlight the risks and limitations of —  
 
(a) switchi ng the integrated shield plan issued by the insurer to that issued by 
another insurer; or  
 
(b) upgrading the integrated shield plan.  
 
MediShield Life coverage  
25. Where the insured is a citizen or permanent resident of Singapore and is not 
terminating this policy in order to switch to another integrated shield plan, the 
insurer shall inform the policy owner that the insured will continue to be covered 
by the MediShi eld Life Scheme, without excluding any existing medical condition, 
even if the policy owner terminates the insured’s existing integrated shield plan.  
 
 
 
 

 
Health Insurance   
310 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] Reinstatement period  
26. For cases where a policy owner terminates a policy with the intention to switch , 
the insurer shall highlight to the policy owner that the policy owner may reinstate the 
policy within 30 days of the date of notice of termination without the need for the insured 
to provide a health declaration.  
 
A-7: Information to be disclosed in the  claims settlement letter  
 
Breakdown of claims paid out  
27. In the event of a claims payment, the insurer shall provide the policy owner with 
a breakdown of the claims to be paid out under each of the following, where applicable 
–  
 
(a) the MediShield Life Component;  
 
(b) the additional private insurance coverage; and  
 
(c) integrated shield plan rider, if any.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 1 November 2015]  
 

13. Notice No: MAS 120 – Disclosure and Advisory Process Requirements  
for Accident and Health Insurance Products  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   311  
APPENDIX B: Standardised Disclosures for all Individual Medical Expense Policies  
 
Statement to be included in the Conditional Letter of Offer for the policy  
 
Statement to be included in the Termination Letter for the p olicy  
 
If you are a citizen or permanent resident of Singapore, you are covered by 
MediShield Life for life, for treatments in Singapore even though you have 
terminated the policy. The cover is provided regardless of pre -existing medical 
conditions or oth er circumstances that you face. For more details on your 
coverage, please visit www.medishieldlife.sg.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 30 June 2016]  If you are a citizen or permanent resident of Singapore, you are covered by 
MediShield Life for life, for treatments in Singapore, regardless of pre -existing 
medical conditions or other circumstances that you face. For more details on your 
coverage, please visit www.medishieldlife.sg.  
  
APPENDIX C: Standardised Disclosures for all accident and health policies which 
are not Medisave -approved policies  
 
Statement to be included in the product summary of the policy  
 
 
This policy is not a Medisave -approved policy and you may not use Medisave to 
pay the premium for this policy.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 30 June 2016]  
 

 
Health Insurance   
312 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] APPENDIX D: Standardised Disclosures for renewable Short -term Accident and 
Health Policies  
 
Statement to be included in the product summary of the policy  
 
This is a short -term accident and health policy1 and the insurer is not required to 
renew this policy. The insurer may terminate this policy by giving you ____2 notice 
in writing.  
*If you have any existing medical condition at the policy renewal d ate, you may 
not be covered under the renewed policy for such a medical condition.


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The insurer may terminate this policy by giving you ____2 notice 
in writing.  
*If you have any existing medical condition at the policy renewal d ate, you may 
not be covered under the renewed policy for such a medical condition. If such a 
medical condition is covered under the renewed policy, you may need to pay 
additional premiums.  
 
1The insurer shall use in the above statement the same term that is used in the 
product summary to refer to the short -term accident and health policy.  
2The insurer shall set out the relevant notice period, whether in days, weeks or 
months.  
* The insurer shall include this statement only if it imposes exclusions or req uire 
additional premiums to cover existing medical conditions under the short -term 
accident and health policy at renewal.  
 
[MAS Notice 120 (Amendment) 2015, with effect from 30 June 2016]  
 
 
*Endnotes of History of Amendments   
 
1. MAS Notice 120 (Amendment) 2015, dated 30 October 2015 with effect from 1 
November 2015, except paragraphs 2(z) and 4 which are effective from 30 June 
2016.  
2. MAS Notice 120 (Amendment) 2020 with effect from 13 April 2020.  
3. MAS Notice 120 (Amendmen t No. 2) 2020 with effect from 1 October 2020.  
4. MAS Notice 120 (Amendment) 2021  with effect from 1 October 2021.  
5. MAS Notice 120 (Amendment) 2022 with effect from 1 June 2022.  
 
Source: MAS Website   
 

46
NOTICE NO: MAS 120 – DISCLOSURE AND 
ADVISORY PROCESS REQUIREMENTS FOR 
ACCIDENT AND HEALTH INSURANCE PRODUCTSCHAPTER
13
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Objective of Notice No: 
MAS 120• Comprises both mandatory requirements and best practice standards on the 
disclosure of information and provision of advice to policy owners for A&H 
policies and life policies that provide A&H benefits.
General Requirements For 
A&H Policies• No direct insurer should use the word “Shield” when naming A&H policy, unless 
that policy is a Medisave-approved policy.
Types of products covered 
by this Notice and their 
definitions• “ElderShield policy” means a policy purchased under the ElderShield Scheme 
as defined in regulation 2 of the Central Provident Fund (Withdrawals for 
ElderShield Scheme) Regulations.
• “ElderShield Supplement policy” means a policy purchased under the 
ElderShield Supplement Scheme as defined under regulation 2 of the Central 
Provident Fund (Withdrawals for ElderShield Scheme) Regulations.
• “Health policy” means an accident and health policy that is not a personal 
accident policy.
• “Individual medical expense policy” means an accident and health policy, other 
than an integrated shield plan and a non-integrated shield plan.
• “Medisave-approved policy” means any CareShield Life Supplement policy, 
ElderShield policy, ElderShield Supplement policy, integrated shield plan or non-
integrated shield plan.
• “MediShield Life Component” has the same meaning as regulation 2 of the 
MediShield Life Scheme (Private Medical Insurance Scheme) Regulations.
• “MediShield Life Scheme” means the Scheme established under section 3 of the 
MediShield Life Scheme Act 2015 (No. 4 of 2015).
• “Non-integrated shield plan” has the same meaning as in regulation 2 of the 
MediShield Life Scheme (Private Medical Insurance Scheme) Regulations.
• “Personal accident policy” means an accident and health policy where accident 
and health benefits are paid out only— 
a. in the event of an injury to, or disability of, the insured as a result of 
accident; 
b. on the death by accident of the insured; or 
c. on the occurrence of a combination of (a) and (b).Please refer to the full notice for more details as not all information is detailed here.
• Except for the Notices which were extracted in full from the MAS website, amendments were only made to the title of the 
Acts in the relevant paragraphs of the study text. 
• As the respective notices are still pending release from MAS, they will be updated once MAS has published them.


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• As the respective notices are still pending release from MAS, they will be updated once MAS has published them.

47
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Disclosure requirements 
for sales of:•
 A&H policies•
 General information about the A&H insurance intermediary (including its business name under which it conducts its insurance business, its business address and its telephone number) and status of an A&H insurance representative (including his name, the A&H insurance intermediary or intermediaries for which he acts).
•
 Remuneration of the A&H insurance intermediary.
•
 Conflict of interest.
•
 Disclosure when providing advice, including: 
 »Nature and objective of the policy; 
 »Details of the insurer; 
 »Contractual rights and obligations.
 »Benefits of the policy.
 »Risks of the policy. 
 »Provision on free-look period of the policy. 
 »Claim on termination.
 »Warnings, exclusions and disclaimers.
 »Provisions and explanations of any benefit illustration, product summary, and group policy under A&H policies.
•
 Marketing material.
•
 Telemarking and direct marketing.
Disclosure requirements for sales of:•
 Life policies that contain A&H benefits•
 Regulatory requirements by an A&H insurance intermediary and an A&H insurance representative of a licensed or exempt financial adviser, when providing advice and/or arrange life policies containing A&H benefits.
•
 Please refer to the respective paragraphs of the Notice:
 »Paragraph 17(a), (c)(iv), (d)(i), (d)(ii), (e), (f), (g) and (h); 
 »Paragraph 20; 
 »Paragraph 21(b) and (c); 
 »Paragraph 22; and 
 »Paragraph 24.
Advisory process requirements in respect of:•
 Know-your-client (Individual)•
 Objectives of the policy owner, including— 
 »the event, or events, which financial impact the insured is seeking protection from; and 
 »the nature of benefits payment that the policy owner is seeking, whether it is a lump sum payment or in periodical payments, and whether it relates to cost actually incurred by the policy owner or insured; and 
 »the class of hospital ward that the insured is seeking to stay in; 
•
 Employment status of the policy owner; 
•
 Financial situation of the policy owner, including assets, liabilities, cash flow and income; 
•
 Source and amount of the policy owner’s regular income; 
•
 Financial commitments of the policy owner; 
•
 Any existing health policy of the insured, including any policy moneys arising from any insurance scheme established and maintained by the Central Provident Fund Board; 
•
 Any medical conditions that the insured may have; and 
•
 For any recommendation made in respect of a health policy that intends to include the policy owner’s dependants as the insureds and the required information for such dependants. 
Advisory process requirements in respect of:•
 Know-your-client (Group)•
 Objectives of the policy owner, including 
 »the financial impact of any event for which the policy owner is seeking protection for members of the group; 
 »the mode of policy moneys payment that the insured is seeking, whether it is a lump sum payment or in periodical payments, and whether it relates to cost actually incurred by the policy owner or insured; and 
 »the class of hospital ward that the insured is seeking to stay in. 
•
 Size and composition of the group, including a breakdown by gender, age, income, occupation; 
•
 Claims history of the group; and 
•
 Any medical conditions that members of the group may have. 

48
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Advisory process 
requirements in respect of:•
Needs analysis•Analyse the information provided by the policy owner and identify the type ofpolicy that is suitable for the insured based on the information obtained fromthe policy owner.
•
If unable to identify a suitable policy, it shall inform the policy owneraccordingly.
•
Explain to its policy owner the basis for its advice and the basis shall bedocumented.
•
Where a policy owner does not want to provide any information or  accept theadvice of the A&H insurance intermediary and chooses to purchase anotherhealth policy which is not advised by the A&H insurance intermediary,
»A&H insurance intermediary may proceed with the policy owner's request,but it shall document the decision of the policy owner and inform the policyowner that it is the policy owner’s responsibility to ensure the suitability ofthe type of policy selected.


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Advisory process requirements in respect of:•
Documentation andrecord keeping•
Furnish the policy owner a document containing the following when providingan advice in respect of a health policy to the policy owner
»Know-your-client (Individual); or
»Know-your-client (Group).
•Any advice provided to the policy owner by the A&H insurance intermediary andthe basis for the advice.
•
Where applicable, a statement that the policy owner does not want to:
»Provide any information requested by the A&H insurance intermediaryunder Know-your-client;
»Accept the advice of the A&H insurance intermediary and has chosento purchase another health policy which is not that advised by the A&Hinsurance intermediary; or
»Receive any advice from the A&H insurance intermediary
Advisory process requirements in respect of:•
Switching•An A&H insurance intermediary shall not provide advice to a policy ownerwho is an individual to switch from one accident and health policy (referredto as “original policy”) to another accident and health policy (referred to as“replacement policy”) in a manner that would be detrimental to the insured. Inconsidering whether a switch is detrimental, the Authority shall have regard to anumber of factors, including—
»Whether the policy owner suffers any penalty for terminating the originalpolicy;
»Whether the policy owner will incur any transaction cost without gainingany real benefit from such a switch;
»Whether the replacement policy confers a lower level of benefit at a highercost or same cost to the insured, or the same level of benefit at a highercost; and
»Whether the replacement policy is less suitable for the insured.
•An A&H insurance intermediary shall disclose, in writing, to a policy owner:
»Any fee or charge the policy owner would have to bear; and
»The changes in level of benefits.
Additional disclosure requirements being adhered to by direct insurers•
Meeting the industry standards on the preparation of a benefit illustration or aproduct summary in respect of a policy that the direct insurer underwrites.
•
Disclosure of relevant information in the respective documents for everyIntegrated Shield Plan (IP) or non-IP.
•
Required font size (Times New Roman 10-point or larger) for product summary,statement, conditional offer letter or termination letter with standardisedrelevant statement of disclosures for any individual Medical Expense Insurancepolicy, as well as any A&H policy not being Medisave-approved policy.
•
Disclosing and explaining the policy terms, including any addition, amendmentor variation to be made in writing to the policy owner, at least 30 days beforetaking effect.

49
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Non-mandatory best 
practice standards on information disclosure, provision of advice•
Information disclosed to policy owners in any advertisement or publicitymaterial in any media should be presented in plain language, and in a mannerthat is easy for the policy owner to understand.
•
Jargon or technical terms used should be clearly explained to policy owners.
•Information disclosed to policy owners should not be limited to seekingcompliance with requirements the Act and this Notice, but should accordwith industry best practices. In addition, the information provided should besufficient to help policy owners make an informed decision.
•
Warning and important information such as the nature and objective of theproduct, risks of the product, fees and charges, and contractual rights andobligations of policy owners and the insurer, should be prominently presentedand clearly explained.
•
Information disclosed to policy owners should not be ambiguous in language orpresentation.
•
Information relating to accident and health insurance products should bedisclosed in an objective and unbiased manner.
•
Where an opinion is expressed, there should be a reasonable basis forexpressing the opinion and it should be unambiguously stated that it is astatement of opinion.
•
Documents to be given to policy owners should be kept up-to-date.
Non-mandatory best practice standards on monitoring of switching for long-term A&H policies•
An A&H insurance intermediary should institute controls, processes andprocedures to effectively monitor and track the switching of long-term accidentand health plans, including but not limited to the following –
»Tracking the volume of switches so as to identify any A&H insurancerepresentatives with an unusually high volume of switching transactions;
»Putting in place procedures to ensure that each switch recommended byan A&H insurance representative is reviewed by a supervisor from the A&Hinsurance intermediary for appropriateness; and
»Implementing procedures and controls to identify any unusual trends inswitching transactions.

14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   313  
      CHAPTER 14  
FINANCIAL NEEDS ANALYSIS  
 
 
 
CHAPTER OUTLINE  
 
1. Introduction  
2. Needs Selling Versus Product Selling  
3. What Is Fact -Finding?  
4.


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Introduction  
2. Needs Selling Versus Product Selling  
3. What Is Fact -Finding?  
4. Identifying & Quantifying Needs   
5. Product Recommendations  
6. Presenting Your Recommendations  
7. Periodic  Client Review  
Appendix 1 4A – Top 10 Conditions Of Hospitalisation  
Appendix 1 4B – Hospital Bill Size By Conditions/Procedures  
 
 
LEARNING OUTCOMES  
 
After studying this chapter, you should be able to:  
▪ know how needs selling differs from product selling  
▪ explain what fact -finding  is 
▪ understand the purposes served by the various sections of the Fact-Find Document  
▪ know the answers to the quantification of needs  questions which must be taken into 
consideration , when going through the prospective client’s Fact-Find Document to 
identify his needs  
▪ understand the importance of an emergency fund  
▪ know at which stage of the prospective client’s life cycle , where  the need to protect 
one’s earnings against disability and  ill health , is critical  
▪ know what to do if the prospective client has the following existing policies:  
- Disability Income Insurance  
- Life Insurance with Total & Permanent Disability Benefit  
- Medical Expense Insurance  
- Critical Illness Insurance  
- Personal Accident Insurance  
- Long -Term Care Insurance  
- Managed Healthcare Insurance  
- Hospital Cash Insurance  
- Life Insurance Polic y & Work Injury Compensation  Insurance    
▪ know how to quantify the following:  
- disability income protection need s 

Health Insurance   
314 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] - medical and ancill ary costs  
- hospital cash income needs  
- Critical Illness Insurance  
▪ list the two basic principles that you should be aware of , before making any product 
recommendation  
▪ know the types of product knowledge that you must possess  
▪ understand why is affordability a n important factor when you are selecting a suitable 
product to recommend to the prospective client  
▪ know the important points that you must note on policy selection  
▪ know the systematic process of explaining your recommendations to the prospective 
client  
▪ know when  the reviews for prospective  client are necessary  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   315  
Contents  
CHAPTER OUTLINE  ................................ ................................ ................................ .........  313 
LEARNING OUTCOMES  ................................ ................................ ................................ .. 313 
1. INTRODUCTION  ................................ ................................ ................................ ..... 316 
2. NEEDS SELLING VERSUS PRODUCT SELLING  ................................ ...................  316 
3. WHAT IS FACT -FINDING?  ................................ ................................ ......................  317 
A. Common Sections Of The Fact -Find Document  ................................ ............  317 
4. IDENTIFYING & QUANTIFYING NEEDS  ................................ ................................  322 
A. Identifying Needs  ................................ ................................ ............................  322 
A1. Emergency Fund  ................................ ................................ .......................  322 
A2. Employment Status & Occupation  ................................ ..........................  323 
A3. Life Stages  ................................ ................................ ................................  323 
A4. Dependants  ................................ ................................ ...............................  323 
A5. Existing Insurance Policies  ................................ ................................ ...... 323 
A6. Need For Health Insurance  ................................ ................................ ...... 326 
B. Quantifying Needs  ................................ ................................ ..........................  326 
B1. Disability Income Protection Needs  ................................ ........................  326 
B2. Medical Costs  ................................ ................................ ...........................  328 
B3. Hospital Cash Insurance  ................................ ................................ ...........  329 
B4. Critical Illness Insurance  ................................ ................................ ..........  330 
5. PRODUCT RECOMMENDATIONS  ................................ ................................ .........  331 
A. Product Suitability  ................................ ................................ ...........................  331 
A1. Good Product Knowledge  ................................ ................................ ........  331 
B. Affordability  ................................ ................................ ................................ ..... 332 
C. Important Points To Note On Policy Selection  ................................ ..............  332 
6. PRESENTING YOUR RECOMMENDATIONS  ................................ ........................  333 
7. PERIODIC CLIENT REVIEW  ................................ ................................ ....................  334 
APPENDIX 14A  ................................ ................................ ................................ ................  335 
APPENDIX 1 4B ................................ ................................ ................................ ................  336 
 


Health Insurance   
316 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 1.


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Health Insurance   
316 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 1. INTRODUCTION  
 
1.1 In this chapter, we will bring you through the needs analysis process, namely 
fact-finding, identifying  and quantifying needs, product recommendations, 
presenting the recommendations and review.  You are reminded to keep 
yourself abreast of the LIA and GIA Guidelines On Disclosure Requirements and 
Needs -Based Sales Process for A&H Insurance Products.  Let us begin by 
looking at the differences between needs selling and product selling.  
 
 
2. NEEDS SELLING VERSUS PRODUCT SELLING  
 
2.1 Needs selling  differs from product selling in the following ways:  
 
TYPES  NEEDS SELLING  PRODUCT SELLING  
(a) Service  
Orientation  You help to discover the 
prospect ive client’s  needs 
and advise on the most 
suitable product , and how 
much to buy. You spend 
more time on the 
prospect ive client’s  
situation than you do on 
your product. You are not 
pushing a product, you are 
providing a serv ice through 
a proper needs -based 
advisory process . 
 You assume that the 
prospect ive client  needs 
your product  and that 
you go straight into it . 
However,  making such 
assumptions can give  the 
prospect ive client  the 
impression  that your 
main concern is just to 
sell your product and 
close a sale.  
 
 
(b) Pressure To 
Buy You help the prospect ive 
client  to uncover  his needs 
and recommend suitable 
solutions  for him. His 
concerns are already  there 
before you r arrival,  and will 
remain after you go , unless 
the prospect ive client  takes 
action. You are not there to 
pressure him to buy your 
products , but to offer 
solutions to his needs.   
 You create pressure to 
buy and the prospective 
client may not know why 
he needs the product . 
People will resist 
pressure , even if they like 
your product.  
 
(c) Long -Term 
Relationships  The focus is on the 
prospect ive client’s  
situation , rather than the 
product. You show that : 
▪ you care his particular 
situation , rather than 
about selling your 
products ; Your relationship with  the 
prospect ive client  
depend s on how well he 
likes your product. Just 
as you would like to shop 
around before deciding 
on a purchase, so would 
the prospect ive client .  

14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   317  
TYPES  NEEDS SELLING  PRODUCT SELLING  
▪ you have the knowledge 
to help him to identify his 
needs and can be trusted 
to help him to find 
relevant solutions.  
 
Based on your 
understanding of the 
prospective client , you 
propose solutions that meet 
his budget  and needs.  
 
You return to review his 
needs periodically , hence, 
establishing an ongoing 
relationship with him.  The prospective client 
may become product 
conscious , and expect 
you to always provide the 
best-priced solution. Even 
if you make the sale,  the 
next sale to your new 
client is not necessarily 
going to be easier than 
the first one.  
 
 
2.2 In short, needs selling is more desirable than product selling because it is:  
▪ service -oriented;  
▪ not pressure selling; and  
▪ relationship based.  
 
2.3 In order to  carry out needs selling, you need to know the prospective  client (a 
requirement under the Notice No: MAS 120 ). This can be achieved by way of  
completing  a fact -find using a Fact-Find Document . There is also Group Fact 
Find, but we will not be touching on the details in this chapter.  
 
 
3. WHAT IS FACT -FINDING?  
 
3.1 Fact-finding is the process of obtaining answers to a series of questions about 
a prospective client’s personal circumstances, finance and ambitions, etc. for 
the future. This information will enable y ou to have a better understanding of 
the prospective client’s objectives, needs and personal profile which will enable 
you to have a proper basis to recommend suitable Accident and Health ( A&H ) 
Insurance  products to the prospective client.


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A.  Common  Sections Of The Fact-Find Document  
 
3.2 You should  note that the format of the Fact -Find Document may vary from one 
insurer to another.  
 
3.3 Each section of the Fact-Find Document  serves a different purpose.  
 
(a)   Important Notice to Client  
This section provides general information on the financial adviser and 
representative and serves two purposes:  
 

Health Insurance   
318 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] ▪ Firstly, it gives the prospective  client  information on who  the insurance 
representative is, which insurers he represent s and what product 
classes he can provide advice on.  
 
▪ Secondly, it highlights to the  prospective  client the importance of 
providing accurate information on the Fact-Find Document . This is 
because a policy purchased with partial completion or inaccurate 
completion of a Fact-Find Document may be inappropriate to his needs.  
 
(b)  Application Type  
 The prospective client can choose one of three types of disclosure he wish 
to share with the adviser . 
 
Application Type 1 . “I/We wish to disclose all information requested for in 
this Form. ” This is meant for those who wish to complete the fact find in 
full, so as to receive rec ommendations on product suitability.  
 
The prospective  client has to complete and sign “Know Your Client” and 
“Our Advice and Reasons Why” Forms.  
 
Application Type 2 . “I/We wish to receive product advice only. ” This is 
meant for people who do not wish to,  or are unable to provide all 
information requested in the form. It is suitable for those who wish to 
receive recommendation on product suitability . 
 
The prospective client has to complete Section 2 – “Our Advice and 
Reasons Why”, sign Section 3 – Acknowledgement . 
 
Application Type 3.  “I/We do not wish to receive any advice from my/our 
advis er.” This is only suitable for people who already know which Medical 
Insurance product and amount of coverage that they want to pu rchase. 
For example, a prospective client wants to purchase “lump sum Health 
Insurance plan1”. The representative takes the prospective client’s 
instructions and assists the prospective client in his completion of the 
proposal form, as well as understanding of the benefit illustration.   
 
At the end of this section, the  prospective client has to sign and confirm 
on the chosen  application type  before moving on to the other parts of the 
fact-find form.  
 
(c) Personal Information : Information  on per sonal details like  the name, 
salutation, identity card/passport number, date of birth, marital status and 
gender , serves the following purposes:  
▪ it is essential for administrative purposes on the part of the company;  
 
▪ it provides you with a preliminary assessment of the types of products 
that will likely be needed. For example, if the prospective client is a 
 
1  It refers to a specific Health Insurance plan  that is without sub -limits and it is payable on a lump sum 
basis.  

14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   319  
single working individual, he may need a Disability Income Insurance 
policy to protect his earnings in the event of his disability; and  
 
▪ information pertaining to age is essential for underwriting and 
premium determination.  
 
As you can see, the information is important and you need to ensure that 
the prospective client completes the section correctly.  
 
(d)  Information on employment details  asks for the  prospective  client’s 
current occupation , as well as the monthly income range. The prospective 
client’s current occupation will provide you with the following information:  
▪ whether the prospective client is eligible for Disability Income 
Insurance (DII). DII is not issued to any unemployed  person,  nor anyone 
who do es not have a stable job (e.g. an odd job labourer);  
 
▪ enables you to determine the deferred period for a DII policy. A self -
employed pers on will need the insurance cover as soon as possible , 
whereas for an employee, he may be able to afford a longer deferred 
period , as he may continue to receive his pay from his company for a 
period of time (e.g. six months) while he is disabled;  
 
▪ enables y ou to know whether the prospective client is exposed to any 
occupational hazards (e.g. radiographers may be exposed to ionising 
radiation) and accidents (e.g. construction workers have a high chance 
of getting injured at the worksite).


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radiographers may be exposed to ionising 
radiation) and accidents (e.g. construction workers have a high chance 
of getting injured at the worksite). If so, you have to a sk for more 
information to assist the underwriter in assessing the risk.  
 
 
 
 
 
 
 
 
The monthly income range will enable you to know roughly whether the 
prospective  client can afford to purchase any insurance policy from you. 
Do not stop using the fact -find just because you think that the prospective 
client is not likely to be able to afford the premium.  
 
If the prospective  client has a need for one of the A&H Insur ance policies , 
but is not able to afford the premium, what you can do is to look at his 
expenses to see if you can help him to review and prioritise his expenses , 
so as to  release the necessary funds to purchase the policy that he needs. 
If the prospective client really cannot afford to purchase any polic y at this 
time, what you can do is to point out the needs that you have uncovered 
for him. Inform him that you can meet u p with him again when his 
financial situation improves , and highlight the importance of being 
financially protected.  
 

Health Insurance   
320 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] (e)  Information on details of spouse and dependants  is necessary for the 
following purposes:  
▪ identification in the event of a claim;  
▪ premium determination;  
▪ any occupational hazards (in respect of the 
spouse);  
▪ eligibility to be covered as a dependant (this is because A&H Insurance 
policies that provide coverage for any dependant has an age limit t o 
qualify as a dependant);  and 
▪ determine whether there is a need to provide A&H Insurance cover for 
the dependants.  
 
Note that even if family coverage is not required, it will be good to find 
out about the spouse and details of the dependants . This is because a 
prospective client who has dependants has an even greater need for 
Health Insurance protection, especially the need to cover for loss of 
income resulting from  illness or sickness. You may also check whether the 
other categories of people , besides those who are married , have any 
dependants. This is because they may have aged parents or handicapped 
siblings to take c are of , and the dependants will have an effect on the 
prospective client’s needs.  
 
By understanding more about the prospective client, you will obtain useful 
information , when you are analysing the prospective client’s needs to 
provide more accurate advice. However, do note that this is not 
compulsory , unless the prospective client is intending to apply for family 
coverage. Some prospective clients may not wish to disclose such 
information.  
 
The Fact-Find Document may also ask for additional information on the 
prospective client’s language proficiency , educational level and 
accompaniment. The information is useful to establish if the prospective 
client is considered vulnerable. For example, a prospective client  who is 
not pr oficient in written and spoken English and/or possess  primary 
school education  may be considered as vulnerable , and the supervisor of 
the insurance representative will make a call -back to the prospective client , 
to ensure that he has understood the recom mendations and products  for 
which  he has applied . 
 
(f)  Existing Health Insurance Policies /Existing Insurance Portfolio : This 
information will indicate how far the prospective clients’ existing plan(s) 
will go towards meeting their needs in the event of ill health or disability. 
In other words, they serve as a starting or reference point for any further 
A&H Insurance recommendations.  
 
Note that the policy  or policies  that you are recommending should 
complement those that the prospective client already has. You should 
avoid asking the prospective client to replace his existing policies with 
new ones or cause him to be over -insured, especially for those A&H 
policies (e. g. Medical Expense Insurance) that are subject to the Co-
ordination of Benefit Clause.  

14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   321  
As most prospective clients do not really know what policies they have 
purchased, it is good that you ask for the policy documents to extract the 
information that you ne ed.  
 
(g)  Personal Priorities  and Objectives : This information will enable you to tell 
what the prospective client’s priorities are with regard to the type of A&H 
policies that he may need. However, it does not mean that you must follow 
strictly what the prospective client has indicated.


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However, it does not mean that you must follow 
strictly what the prospective client has indicated. As a professional 
insurance representative,  you should consider the overall profile of the 
client and help him to re -prioritise the needs that he has s pecified.  
 
(h)  Health Condition : If this information is required to be completed in the 
Fact-Find Document , it will help to determine whether the prospective  
client is insurable and , if so, on what terms.   
 
If the prospective client answered “ Yes” to this question, find out the 
following information from him , so that you can help to expedite the 
underwriting process:  
▪ the medical term of the illness (if the client knows. If not, ask him to 
give a description of it) ; 
▪ the date of onset of the medical condition ; 
▪ the type of medical treatment received ; 
▪ is he still undergoing medical treatment?  
▪ is there any hospitalisation? If so, to find out when  is the hospitalisation , 
and what type of medical treatment is being received ; 
▪ is there any recurrence?  
▪ whether he has fully recovered and if so, when?  and 
▪ does he have any medical report on his condition? If so, you must 
obtain a copy from him for submission to the underwriter. You will 
need to inform the prospective client that the i nformation will form part 
of the insurer ’s risk assessment process. Note that you must not keep 
any copy of the report , and that you must treat the information with 
strict confidentiality.  
 
(i) Replacement of Policy : If the prospective  client’s answer is “Yes”, you 
have to:  
▪ explain to the prospective client the consequences of replacing policies , 
by highlighting the following disadvantages to him:  
- that he may not be insurable at standard terms , if there is any 
deterioration in his health , or if he has changed to a risky occupation, 
etc.; 
- that he may have to pay a higher premium; and  
- that the terms and conditions may be less advantageous  or 
beneficial , especially if there are any changes to his h ealth.  
 
 


Health Insurance   
322 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] (j) Customer’s Financials:  The Life Insurance Fact-Find Document has a 
section to gather information , such as customer’s investment profile, cash 
flow and budget , as well as assets and liabilities . Information gathered 
here serves to ascertain the affordability of the recommendation and plans , 
and facilitate s the planning  of financial needs.  
 
(k) Representative’s Declaration : Before you sign this section, reiterate to the 
prospective client that you will treat the information given in the Fact-Find 
Document with strict confidentiality , and that you will use it  only for the 
purpose of determining suitable insurance products for him , and not for 
any other purposes , bearing in mind the requirements under the Personal 
Data Protection Act 2012.  This will help to establish trust between you 
and the prospective client.  
 
3.4 Having  completed the Fact-Find Document , you will then move on to  the next 
step to help the prospective client , to identify and quantify his needs.  
 
 
4. IDENTIFYING & QUANTIFYING NEEDS   
 
A. Identifying Needs  
 
4.1 You begin by analysing  the information which you have gathered during the 
fact-find stage. You should ask yourself the following questions as you go 
through the Fact-Find Document : 
▪ Does he have an emergency fund in place?  
▪ What is his employment status and occupation?  
▪ Which life stage is he in?  
▪ Does he have any dependants?  
▪ Does he or his dependants (if a ny) have any I ndividual Life or Health 
Insurance , or Group Medical Insurance (such as Group Critical Illness 
Insurance, Group Hospital & Surgical Insurance) in place?  
▪ Does he or his dependants have a need for  Life or  Health Insurance?  
▪ Can he afford to purchase any insurance policy that you are going to 
propose to him?   
▪ Has he stated his priorities correctly?  
 
A1. Emergency Fund  
 
4.2 An emergency  fund is useful to guard aga inst the breadwinner’s loss of a job 
or a short -term disability that interrupts the  financial  flow of income to the 
family. It also provides for certain expenses not covered by insurance, such as 
the costs of a child’s tuition .


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It also provides for certain expenses not covered by insurance, such as 
the costs of a child’s tuition . 
 
4.3 If the prospective client does not have an emergency fund in place, it may affect 
his ability to service any policies that he may purchase from you.  
 

14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   323  
A2. Employment Status & Occupation   
 
4.4 See information on employment details under Section 3. 3(d) of this chapter.  
 
A3. Life Stage s 
 
4.5 Most people will go through the following life  stages:  
▪ childhood;  
▪ young unmarried;  
▪ young married;  
▪ married with  young  children;  
▪ married with older children;  
▪ pre-retirement; and  
▪ retirement.  
 
4.6 During his active employment years, it is crucial to ensure  that one protect s his 
earnings against disability resulting from  injury or long -term sickness . 
 
4.7 The need for protection against ill health applies to everyone at any stage  in his 
life. For older  people , they  will have a greater need for Critical Illness Insurance, 
Medical Expense Insurance and Long -Term Care Insurance , as there is a higher 
chance of them falling sick or getting injured.  
 
A4. Dependants  
 
4.8 If the prospective  client has dependants, provision should be made for their 
medical expenses  to avoid any financial burden , in case any of the dependants 
contract s a major illness or become s disabled .  
 
A5. Existing Insurance Policies  
 
4.9 If the prospective  client and his dependants have any  Life and  Health Insurance, 
you need to compare the benefits under his existing policy with his current 
needs , to see if the  prospective  client is sufficiently covered. Let us look at how 
this can be done.  
 
(i) Disability Income Insurance  
For a prospective client who already has a Disability Income Insurance 
policy, compare the level of cover with his current income level to see if 
the cover is sufficient. Check if the policy covers up to the target retirement 
age, the length of the deferred period , and whet her the prospective client’s 
employer provides him with any disability income benefit. Remind the 
prospective client not to over -insure because of  the Limitation Clause 
under the Disability Income Insurance policy.  
 
(ii) Life Insurance with Total & Permanent Di sability Benefit  
The p rospective client (or his spouse) who may not be actively employed 
(e.g. housewife) can consider to get protection for disability with the TPD 


Health Insurance   
324 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] benefits under Life Insurance. You can check for any TPD benefits that the 
prospective client already has by reviewing the existing life insurance 
policies.  
 
(iii) Medical Expense Insurance  
If the prospective client has a Medical Expense Insurance policy , including 
the Medisave -approved Integrated Plan , you need to find out the exact 
coverage , such as the hospital and ward entitlement of the plan, the 
annual and lifetime limits, and  the policy  co-insurance and deductible , if 
any. Also  look at the expiry ag e and the renewability condition.  You must 
ensure that the prospective client will be adequately covered  in his 
preferred hospital and ward type  in the event of hospitalisation , and that 
he will enjoy the coverage for as long as possible  and will not  risk losing 
his coverage at a time when he needs it most.   
 
In addition , you also need to keep in mind  the Co-ordination of Benefit 
Clause.  Example 1 4.1 gives an illustration of how this C lause works.  
 
Example 1 4.1: Illustration Of  The Working Of The Co -ordination Of Benefit Clause  
 
Allison has been recently hospitalised for eight (8) days for an operation to 
remove her womb. Her total hospital bill comes out to be  S$22,400. She has 
received S$11,000 reimbursement under her company’s Group Medical Expense 
Insurance policy and is now waiting for the reimbursement from her own Private 
Medical Insurance (PMI).


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She has 
received S$11,000 reimbursement under her company’s Group Medical Expense 
Insurance policy and is now waiting for the reimbursement from her own Private 
Medical Insurance (PMI).  
 
Details of her hospital bills and PMI (no deductible nor c o-insurance) are 
as follows:  
 
Description  Hospital Bills  Limits Under 
PMI Amount  
Covered Under 
PMI 
Room & Board  S$300 x 8 = 
S$2,400  S$250 per day  S$250 x 8 = 
S$2,000  
Surgery  S$20,000  S$10,000  S$10 ,000 
Total  S$22,400   S$12,000  
 
Applying the Co-ordination of Benefit Clause, since the Group Medical Expense 
Insurance policy has already paid her S$11,000, the amount which she can claim 
from her PMI will be the minimum of the:  
▪ balance bill i.e. S$22 ,400 - S$11,000 = S$11,400 or  
▪ amount covered unde r PMI i.e. S$12,000  
 
In this instance, she will claim S$11,400  from her PMI , even though the above 
table shows a slighter higher amount. Hence, the total amount which she will 
receive from all her health policies is S$22,400 which does not exceed the actual 
hospital expenses incurred.  
*Note: The above  example  is only an illustration and that the sub -benefits of the group 
medical expenses are more or less in sync to her PMI.  
 
With the illustration  in Example 1 4.1, you will appreciat e the importance 
of knowing the prospective client’s current insurance benefits, his 
personal expectation of the types of medical care , and his ability  to pay 

14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   325  
the premium s. Over -purchase of Medical Insur ance is not necessary , but 
under -insurance risk is equa lly disastrous.  
 
(iv) Critical Illness Insurance  
For Critical Illness Insurance, review  whether it is a stand -alone policy or 
a rider attached to a n ILP, Term, Endowment or  Whole Life Insurance 
policy. It is good to ensure that the prospective  client will have the Critical 
Illness Insurance cover even in his old age . For example, if the prospective 
client has an Endowment type of Critical Illness Insurance policy, his CI 
Insurance cover will terminate once the policy matures. Usually, this will 
happen at a time when he needs the cover most. Also  find out the 
percentage of the sum insured that will be payable in the event that your 
client suffers a critical illness , since you know that this policy can be issued 
as a 100% or 50% acceleration (Note: Accelerated Benefits accelerate the 
lump sum benefit of the basic plan upon diagnosis of a covered critical 
illness  as defined in the policy ).  
 
For CI with less than 100%  Acceleration, you may wish to recommend him 
to add o n the Critical Illness Waiver of Premium rider to the policy , For 
clients with life policies, they may also wish to consider adding the CI 
Waiver of Premium rider . In doing  so, future premiums can be waived in 
the event of a critical illness , so that any premium payable for the  balance 
coverage  will be waived  and the coverage can continue  should he be 
diagnosed to be suffering from a critical illness. In this way, the balance 
of the sum assured can then be preserved for his dependants upon his 
death.  
 
You should also take note of the maximum aggregate sum assured that 
each client is entit led to , if the insurer  that you are selling for has such a 
practice.  
 
(v) Personal Accident Insurance  
For this class of policy, you need to find out the extent of its cover age, 
including the details of its exclusion s and limitations . This will enable you 
to assess whether the prospective client is adequately covered.  
 
(vi) Long -Term Care Insurance  
Review the benefits that are payable and the benefit trigger point , the 
definitions used for the Activities of Daily Living (ADLs) and the num ber 
of ADLs needed before the benefits are payable. In addition, you need to 
find out if it is a reimbursement type of benefit , where the 
payment is based on the actual amount of expenses 
incurred.  
 
(vii) Managed Healthcare Insurance  
Find out the exact amount s of deductible and co -insurance that the 
prospective  client has to bear.


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(vii) Managed Healthcare Insurance  
Find out the exact amount s of deductible and co -insurance that the 
prospective  client has to bear. In addition, do bear in mind the Co-
ordination of Benefi t Clause.  
 
 

Health Insurance   
326 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] (viii) Hospital Cash Insurance  
Hospital Cash Insurance  pays  on top of all other Health Insurance plans. 
You need to find out the daily benefit and the maximum number of days 
that the benefit is payable.  
 
(ix) Life Insurance & Work  Injury  Compensation Insurance  
Find out if the prospective client is covered under the statutory Work  Injury  
Compensation Insurance policy and whether he has any Life Insurance 
polic y.  
 
Work  Injury  Compensation Insurance policy pays in the event of any 
accident resulting in hospitalisation, permanent incapacity and/or death  
while arising out of and in the course of employment  and its payment will 
affect how the other policies (with Co-ordination of Benefit  Clause ) pay . 
The total and permanent disability benefit under the Life Insurance polic y 
can be used to help the  prospective  client, to overcome his financial 
difficulties in the event  that he is totally and permanently disabled.  
 
A6. Need For Health Insurance  
 
4.10 Having gone through the list of questions  in the Fact -Find Document , you are 
now in a position  to tell whether the prospective client has a need for Health 
Insurance  and, if so, whether he can afford it. If the client does not have any 
need for more Health Insurance  coverage , you should not persuade him to 
purchase any such polic y. Instead, you should do a review with him when his 
circumstances change (e.g. having a newborn child). On the other hand, if the 
prospective client does have a need for Health Insurance , and he has the means 
to pay for it, the next step that you have to carry out is to quantify the 
prospective client’s Health Insurance needs.  
 
B. Quantifying Needs  
 
4.11 Needs quantification  is not mandatory , but a n industry  “best practice”. For the 
purpose of  quantifying Health Insurance needs, we will focus on the Protection 
and Accident & Health sections of the Form. Here is how the quantification of 
the prospective client’s needs is done.  
 
B1. Disability Income Protection Needs  
 
4.12 Disability  Income Protection Needs is also known as Maintenance Costs. This is 
the amount that is required to meet the ongoing maintenance of the prospective 
client and his dependants, i.e. their daily living expenses.  
 
4.13 There are commonly three  methods  (as described below)  to quantify this.  
 
 
 
 
 
 
 

14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   327  
Method 1  
Using the monthly salary, 75% of it is his income protection need in the event 
of his disability.  
 
Disability Income Protection = 75% x monthly income  : S$X 
Less  
Existing disability benefit per month  : (S$X)  
Estimated level of disability income protection needed  : S$XX  
 
Method 2  
This method uses monthly expenses instead of income to determine the 
coverage needed.  
 
Total monthly expenses  : S$X 
Less  
Existing disability benefit per month  : (S$X)  
Estimated level of income protection needed  : S$XX  
 
Monthly expenses should include the amount that the prospective client spends 
on himself , as well as  on his family. This is because when a person is disabled, 
the usual expenses will continue , and on top of that, the prospective client also 
has to take care of his medical expenses. This method provides  the minimum 
amount that is required to sustain the prospective client’s living expenses in the 
event of a disability. Example 1 4.2 shows you how to compute the amount of 
income protection needed in the event of a disability using Method 2 . 
 
Example 1 4.2: Computing The  Amount Of Disability Income Protection Needs  
 
Ben, age d 35  years , has indicated in his Fact-Find Document that his family’s living 
expenses (inclusive of that of his own) is S$3,000 per month. He has also indicated 
that he wishes to have an income in the event that he is disabled and is not able to 
work.


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He has also indicated 
that he wishes to have an income in the event that he is disabled and is not able to 
work. So far, he does not have any insurance coverage other than the Central 
Provident Fund  (CPF)  Board’s Dependant s’ Protection Scheme (DPS)2, Home 
Protection Scheme and IncomeShield Plan MA, as well as his em ployer’s Group Term 
Life Insurance of S$100,000  sum assured , and Hospital and Surgical Insurance 
coverage of up to S$50,000 without any sub -limits. The amount of disability income 
protection that he needs is:  
 
Total monthly expenses  : S$3,000  
Less    
Existing disability benefit per month   : S$       0  
Existing hospital cash benefit per month  : S$       0  
  ________  
 
Estimated level of income protection needed  : S$3,000  
 
 
 
 
 
2  DPS is a low cost  term -life, opt -out insurance scheme that provides a basic coverage of up to S$46,000 
to the family of  insured in the event of his death or total and permanent  disablement . 

Health Insurance   
328 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] Method 3  
There may be circumstances under which the prospective client may not want , 
is not able to afford a Disability Income Insurance  (DII) policy  or simply does 
not have an income to be eligible for a DII policy . For such a prospective client, 
you can help to p rovide him with total and permanent disability benefits usually 
incorporated into a Life Insurance policy.  
 
This method provides a lump sum benefit should a person become totally and 
permanently disabled.  
 
Example 1 4.3 illustrates how you can compute the amount of total and 
permanent disability benefits which the prospective client will need.  
 
Example 1 4.3: Computing The Amount Of Total And Permanent Disability (TPD) 
Benefit  
 
Following Example 1 4.2, the amount of TPD benefit that Ben needs per year is as 
follows:  
 
Yearly income needed = family’s average living expenses x 12  
                                = S$3,000 x 12  
                                = S$36,000  
 
Assuming that the annual inflation rate and expected rate of return from investments 
remain constant at 2% and 4% respectively, the expected rate of return from fun ds 
(adjusted for inflation) = 4% - 2% =2%  
 
If the number of years that the income is needed is 25 (to be determined by the 
client), then the estimated funds required to provide income  is: 
=S$36,000 x 19.9139  (refer to Table A2 at the end of this Study Guide ) 
=S$716, 900 
 
Less  
Funds available + Existing Insurance *  
= S$(46,000 + 100,000)  
= S$146,000 
 
Additional amount of total and permanent disability benefit required  
= S$(716,900 – 146,000)  
= S$570,900    
 
*only consider those existing insurance policies which ha ve a TPD benefit.  Group 
Term Life and DPS both have TPD benefit s. 
 
4.14 Having learnt how to determine the maintenance cost, let us now learn how to 
determine the medical costs.  
 
B2. Medical Costs   
 
4.15 Medical costs  refer to the immediate hospital and medical expenses associated 
with an injury or illness resulting in the prospective client being hospitalised  for 
treatment or surgery.


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B2. Medical Costs   
 
4.15 Medical costs  refer to the immediate hospital and medical expenses associated 
with an injury or illness resulting in the prospective client being hospitalised  for 
treatment or surgery.  
 


14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   329  
4.16 To quantify medical cost needs, you need to  discuss and make some 
assumptions  with the prospective clients  as follow s: 
▪ the most common conditions for a person to be hospitalised;  
▪ the cost of treatment  for any one particular illness , such as a heart conditio n; 
▪ The hospital type and ward the client would opt for in the event of 
hospitalization;  
▪ The need to provide coverage for medical cost from the first dollar or can 
he accept a co -payment;  
▪ The continuous affordability of medical insurance premiums when he is  no 
longer working  
 
4.17 The data are available from the Ministry of Health (MOH) Website at: 
www.moh.gov.sg . Examples of the two sets of data are given in Appendices  
14A and 14B. As they change over time, it is advisable for you to refer to the 
MOH Website every time when you need information on such data.  
 
4.18 In addition, the following factors should be considered and discussed with the 
prospective client, with appropriate  adjustme nts made, if necessary : 
▪ as Group Insurance is not portable , that is  the prospective client may lose his 
Group Insurance cover age when he leaves the organis ation later, he may 
wish to consider removing his Group Insurance coverage from any 
computation;  
▪ the prospective  client may be concerned with  the treatment cost of more 
than one medical condition in a year.  
 
B3. Hospital Cash Insurance  
 
4.19 The way to compute the amount of Hospital Cash Insurance required is as 
follows:  
 
Total monthly expenses  S$ X 
Less  
Existing hospital cash benefit per month   (S$ X) 
Estimated level of income protection needed  S$XX 
 
Assuming Eugene ’s monthly expenses is S$2,500;  the amount of Hospital Cash 
Income required is as follows:  
 
Monthly expenses                             S$ 2,500  
Less  
Existing hospital cash benefit per month                                    (S$     0)               
                                
Estimated level of income protection needed  _S$ 2,500  
 
Therefore, the amount of Hospital Cash income required is:  
= S$2,500  30 days  
= S$83.33 per day  
  


Health Insurance   
330 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] B4. Critical Illness Insurance  
 
4.20 Besides taking care of hospitalisation expenses and disability income, the  
prospective  client may also want a lump sum payment for his rehabilitation 
expenses , to defray expenses not covered by other Health Insurance policies , 
and to maintain his family living expenses,  as well as to handle any emergency 
expenses , if he contracts a dread disease  or critical illness.  A Critical Illness  (CI) 
Insurance policy is suitable for these purpose s. You will need to calculate the 
amount of CI Insurance cover  that is required.  
 
4.21 The calculation is really more of an art than a science , since there are many 
uncertainties. Some factors to consider for the prospective client are described 
below : 
(a) Which dread disease is  he most susceptible to? His family medical hist ory 
may shed some light on this answer. Therefore, medical costs can be 
approximated.  
 
(b) His family’s needs and expenses . 
 
(c) His family’s level of dependence on  him. 
 
(d) Does he already have  sufficient Medical Expense Insurance and/or 
Disability Income Insurance?  
 
(e) His desired level of medical treatment , e.g. private or public hospital.  
 
(f) Whether he wants to buy an Additional Benefit Type or Acceleration 
Benefit Type of CI Insurance . If he decides on the Additional Benefit  Type, 
then he must be informed that the coverage will normally cease at the age 
of 65 years , unlike the Acceleration Benefit Type. Since the Acceleration 
Benefit Type is usually attached to a Whole Life Insurance polic y, this type 
of benefit will last the whole of life.  
 
(g) Does he want a benefit on early diagnosis of a critical illness, does he want 
to be able to make multiple critical illness claims, does he want to cover 
other conditions such as diabetes or mental illnes s?  
 
(h) His preference and comfort level.


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(h) His preference and comfort level. Some prospective clients w ill require  
only S$50,000 CI Insurance cover, while others will feel that even 
S$500,000 cover is insufficient.  
 
4.22 After an agreement has been reached with him as to the CI Insurance cover 
required, you will be able to calculate the shortfall in cover by deducting away 
the current CI Insurance cover that he already has.  
 
4.23 Having seen how a prospective client’s needs for  Health Insurance are 
quantified, we now move on to see how to go about recommending the most 
suitable products to meet the prospective client’s needs.  
 
 

14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   331  
5. PRODUCT RECOMMENDATIONS   
 
5.1 There are three basic principles that you should be aware of , before you start 
making any product recommendations  to the prospective client . They are:  
▪ recommend products only if he needs them; and  
▪ recommend products which are only the most suitable for him, given his  
existing  circumstances.  
▪ if he needs a product that the company you represent does not carry, let him 
know , so that he can find alternatives.  
 
A. Product Suitability  
 
5.2 In order for you to determine if a product is suitable for the prospective  
client, you need to have a good understanding of the pr oducts 
available.  
 
A1. Good Product Knowledge  
 
5.3 You should be familiar with the following aspects of your  company’s  products:  
▪ What is the product range?  
▪ What does the product serve to do? For example, reimbursement of 
expenses or replacement of income?  
▪ What are the eligibility criteria for making a claim under the policy?  
▪ Does the policy have any waiting period? If so, find out the duration and 
effective date of the waiting period.  
▪ Is the policy guaranteed renewable, optionally renewable, conditi onally 
renewable or cancellable?  
▪ What are the exclusions and limitations under the policy?  
▪ Does the policy have any special feature s, such as the survival period under 
a Critical Illness Insurance policy , and the requirement to inform the insurer 
of any change in occupation under a Disability Income Insurance policy?  
▪ Is the policy subject to any C o-ordination of Benefit  Clause ? 
▪ Does the policy have any deductible or co -insurance  feature ? 
▪ Is there any per d ay, per year or per lifetime limit under the policy?  How 
much are the limits?  
▪ When and how are the benefits payable? For example, a Hospital Cash 
(Income) policy pays a flat amount for each day of hospitalisation  capped at 
a certain number of days.  
▪ What ar e the distribution costs, charges and expenses levied on the products?  
▪ What is the duration of cover under the policy?  
▪ What are the premium s and the frequency  modes for premium payments , 
and are they subject to change s? 
▪ Is there a grace period allowed for the payment of premium due and, if so, 
what is the time frame?  

Health Insurance   
332 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] ▪ What is the implication of non -payment of premium?  
▪ What are the medical and non -medical limits (i.e. the underwriting guideline s 
on when a medical test is required for the assessment of an app lication) of 
the products?  
▪ Which types of policies have n on-forfeiture options?  
▪ Is there any geographical limit imposed on the policy?  
 
B. Affordability  
 
5.4 Affordability is an important factor when selecting the most suitable product to 
recommend to the prospective client. Most policies require regular premiums 
to be paid . Being able to afford the initial premium does not mean that he will 
be able to sustain the regular payments. For policies paid with Medisave, you 
have ensure d that his Medisave is enough to support continuity of the policy, 
either with his current balance or his future regular contribution to his Medisave 
Account.  A prospective client who cannot afford the premiums in the longer 
term will allow his policy to lapse. The insurer, the insurance representative and 
the prospective client do not benefit from early  policy  lapses. From the 
prospective client’s standpoint, he loses the co verage. The insurance 
representative loses the prospective client’s goodwill and the commission 
payable under the policy. The insurer has to absorb the high initial cost of 
underwriting the policy.


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The insurance 
representative loses the prospective client’s goodwill and the commission 
payable under the policy. The insurer has to absorb the high initial cost of 
underwriting the policy.  
 
C. Important Points To Note On Policy Selection  
 
5.5 When  decidi ng on which policy is most suitable for the prospective client, you 
will have to consider all the factors which we have gone through in this chapter. 
In addition, it is important that you should also consider the points as listed in 
Table 1 4.1 below . 
  
Table 1 4.1: Important Points To  Note On Policy Selection  
 
 
▪ Ensure that the new  recommended  policy provides cover  only for his 
coverage shortfall  to minimi se over -insurance . 
▪ Ensure that the prospective client has the longest coverage possible , as 
Health Insurance is needed most when one is old.  
▪ Ensure that the prospective client can afford the premium  in the long term . 
▪ Ensure that the prospective client is not over -insured.  
▪ Ensure that the policy insures  the right life (e.g. if the husband is the sole 
breadwinner, then you should ensure that he is properly covered first , 
before you recommend any products to his dependants).  
▪ Ensure that the prospective client with dependants  has sufficient death 
protection  in place.  
▪ Recommend a rider if it can help to save premium s (provided that the 
expiry age of the rider will not be shortened by the term of the basic policy).  
▪ For Critical Illness  (CI) Insurance , take note of the two type s of cover - 
Additional Benefit Type and Acceleration Benefit Type . Discuss the  

14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   333  
following with the client - expiry age, premium difference, whether he 
should take up a CI rider if he has existing life policies . 
▪ Consider to attach the CI W aiver of Premium rider for the client who  has 
other life insurance protection.  
▪ For the prospective client who is covered under his employer -sponsored 
Medical Expense Insurance (MEI) and has a need for additional MEI cover, 
ensure that the  proposed  plan complement the one provided by the 
employer. For example, most employer -sponsored MEI policies provide 
cover from the first dollar onward s, but the coverage is low. In such a case, 
you can propose a Major MEI to your client.   
▪ Always check for altern ative policies to the one that you are recommending 
to give the prospective client more choices. This gives the prospective 
client more flexibility in terms of the premium s and benefits that meet his 
needs.   
 
 
6. PRESENTING YOUR RECOMMENDATIONS    
 
6.1 To ensure  that the prospective client understands the products recommended 
and the reasons for your recommendations, you should explain the features 
and benefits of the recommended products , and how these fit into his situation.  
 
6.2 Before meeting  the prospective client to go through your recommendation , 
plan how you would like to present to him . It is advisable that you follow a 
systematic process.  
 
6.3 An example below  shows a systematic process  to explain your 
recommendations to the prospective client in a sequen tial order.  
 
 
1. State the purpose of the product (i.e. the need which is actually being met by 
this product) . 
 
2. Give a description of the nature of the product . 
 
3. Brief the prospective client on the benefits and limitations of the product . 
 
4. Give a detailed explanation on the options within the product . 
 
5. Give a summary of the reasons why the product is being recommended . 
 
6. Explain the benefit illustration and highli ght the guaranteed and non -
guaranteed benefits (if applicable) .  
 
7. Disclose any distribution costs, charges and expenses under the policy.  
 
 
 
6.4 During the meeting, communicate clearly and simply. Avoid using technical 
jargon. If the prospective client accepts your recommendations, you have to 
ensure that all relevant forms required by your principal (insurer) are properly 
completed. In the case wh ere the prospective client decides not to take up any 
of your recommendations, you may seek to clarify his reasons for not accepting 
your recommendations. However, you should not insist if the prospective client 
refuses to explain. Thank the prospective  client for his time before leaving.  

Health Insurance   
334 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  
 
7.


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Thank the prospective  client for his time before leaving.  

Health Insurance   
334 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  
 
7. PERIODIC CLIENT REVIEW  
 
7.1 The process of identifying and satisfying your client’s needs does not stop with 
the implementation of the initial recommendations. Your client’s personal 
circumstances are likely to change and n ew needs may surface  over time . Such 
changes may affect the initial product recommendations , as they may no longer 
be adequate. Regular reviews will ensure that your existing client continues to 
receive quality service from you , and also reinforces your re lationship  with your 
existing client .  
 
7.2 The question of when and how often the existing client’s position should be 
reviewed depends on some extent of the initial advice provided by you , and 
also on the  existing client’s own wishes for a review. Generally, you should do 
a review with your existing client under the following circumstances:  
▪ a change in the client’s personal circumstances, such as the birth of a child;  
▪ external developments , such as changes in the CP F ruling which can have an 
impact on the client’s financial position and/or the appropriateness of 
products already held;  
▪ the original products purchased by the client are not adequate to cover all 
his needs; and  
▪ the launching of new products in the fina ncial services market.  
 
7.3 Regular reviews benefit both you and your client. As a professional insurance 
representative, you should ensure that the products recommended meet with 
the client’s current needs . You should also seek to arrange regular meetings 
with him to address his future needs.  
 
7.4 The long -term needs of the client should be a principal concern , and your 
relationship with him should also be a n ongoing one.  
 
 
Do not recommend 
any further Health 
Insurance policies to 
the prospective client 
if he has adequate 
medical cover, as he 
may not be able to 
claim under all the 
insurance policies.  
 

14. Financial Needs Analysis  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   335  
APPENDIX  14A 
 
Top 10 Conditions of Hospitalisation  
 
 
 
Total  No. of Discharges  ('000)   2016  
 2017  2018  
 569.2   593.8   611.9  
% of Total  Discharges     
1. Accident,  poisoning  & violence   8.3  8.4  8.6 
2. Cancer   5.9  5.9  5.8 
3. Pneumonia   3.2  3.3  3.2 
4. Ischaemic  heart  diseases   3.1  3.2  3.1 
5. Intestinal  infectious  diseases   2.8  2.6  2.7 
6. Other  heart  diseases   2.5  2.5  2.5  
7. Infections  of the skin and 
subcutaneous  tissue   2.1  2.1  2.3 
8.  
Diabetes  mellitus   1.7  1.8  2.1 
9. Cerebrovascular  diseases  (including  
stroke)   1.8  1.9  2.0 
10. Accute  upper  respiratory  infections   1.9  2.1  1.9 
 
Source: MOH Website – “Top 10 Conditions of Hospitalisation ” 
 
https://www.moh.gov.sg/resources -statistics/singapore -health -facts/top -10-conditions -of-
hospitalisation  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Health Insurance   
336 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] APPENDIX  14B 
 
HOSPITAL BILL SIZE BY CONDITIONS/PROCEDURES  
 
Heart Coronary Disease, Coronary Artery Bypass Graft (Open)  
 
Private Hospital  
 
Inpatient  25% of patients are 
charged  
below:  50% of patients are 
charged  
below:  75% of patients are 
charged  
below:  
Total Bill Amount  $67.272  $75,398  $88,942  
Operation Fee  
 
i. Surgeon Fee  
ii. Anaesthetist Fee  
iii.


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Anaesthetist Fee  
iii. Facility Fee  $43,195  
 
$24,557  
$3,500  
$15,611  $50,874  
 
$27,820  
$4,815  
$19,093  $57,724  
 
$30,495  
$5,350  
$24,158  
Implant  n/a n/a n/a 
Other Fee  $20,451  $25,533  $33,216  
 
 
Public Hospital (Ward A)  
 
Ward A  25% of patients are 
charged  
below:  50% of patients are 
charged  
below:  75% of patients are 
charged  
below:  
Total Bill Amount  $36,091  $38,485  $42,876  
Operation Fee  $16,877  $18,019  $19,012  
Implant  n/a n/a n/a 
Other Fee  $17,931  $20,576  $23,183  
 
 
Public Hospital (Ward B2)  
 
Ward B2  25% of patients are 
charged  
below:  50% of patients are 
charged  
below:  75% of patients are 
charged  
below:  
Total Bill Amount  $7,266  $8,006  $9,016  
Operation Fee  $1,287  $1,287  $2,061  
Implant  $0 $0 $9 
Other Fee  $5,724  $6,387  $7,556  
 
 
Source : https://www.moh.gov.sg/cost -financing/fee -benchmarks -and-bill-amount -
information/Details/SD812H --1 
 
 
 
 
 
 
 

50
FINANCIAL NEEDS ANALYSISCHAPTER
14
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Needs selling versus 
product sellingNeeds selling is more desirable than product selling because it is:
• Service-oriented.
• Not pressure selling.
• Relationship based.
What is fact-finding? • Fact-finding is the process of obtaining answers to a series of questions about a 
prospective client’s personal circumstances, finance and ambitions, etc. for the 
future.
Purposes served by the 
various sections of the 
Fact-Find Document• Important notice to client
 »Gives the prospective client information on who the insurance 
representative is, which insurers he represents and what product classes he 
can provide advice on.
 »Highlights to the prospective client the importance of providing accurate 
information on the Fact-Find Document.
• Application type
 »Types of disclosure.
 »Application type 1,2 or 3.
• Personal information
 »Essential for administrative purposes on the part of the company.
 »Preliminary assessment of the types of products that will likely be needed.
 »Information pertaining to age is essential for underwriting and premium 
determination.
• Information on employment details
 »Eligibility for Disability Income Insurance (DII).
 »Determine the deferred period for a DII policy.
 »Know whether the prospective client is exposed to any occupational 
hazards.
 »Affordability.
• Information on details of spouse and dependants
 »Identification in the event of a claim; 
 »Premium determination;
 »Any occupational hazards (in respect of the spouse);
 »Eligibility to be covered as a dependant (this is because A&H Insurance 
policies that provide coverage for any dependant has an age limit to qualify 
as a dependant); and
 »Determine whether there is a need to provide A&H Insurance cover for the 
dependants.
• Existing health insurance policies / existing insurance portfolio
 »Indicate how far the prospective clients’ existing plan(s) will go towards 
meeting their needs in the event of ill health or disability.
• Personal Priorities and Objectives
 »Enable the representative to tell what the prospective client’s priorities are 
with regard to the type of A&H policies that he may need.

51
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Purposes served by the 
various sections of the 
Fact-Find Document• Health condition
 »Help to determine whether the prospective client is insurable and, if so, on 
what terms.
• Replacement of policy
 »If prospective client’s answer is “yes”, the representative is required to 
explain to the prospective client the consequences of replacing policies.
• Customer’s financials
 »Ascertain the affordability of the recommendation and plans, and facilitates 
the planning of financial needs.


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• Customer’s financials
 »Ascertain the affordability of the recommendation and plans, and facilitates 
the planning of financial needs.
• Representative’s declaration
 »Declaration on treating the information given in the Fact-Find Document 
with strict confidentiality and use it only for the purpose of determining 
suitable insurance products, and not for any other purposes, bearing in 
mind the requirements under the Personal Data Protection Act 2012
 »Establish trust between the representative and the prospective client.
Sample questions to be 
taken into consideration 
when going through the 
prospective client’s Fact-
Find Document to identify 
his needs• Does he have an emergency fund in place?
• What is his employment status and occupation?
• Which life stage is he in?
• Does he have any dependants?
• Does he or his dependants (if any) have any Individual Life or Health Insurance, 
or Group Medical Insurance (such as Group Critical Illness Insurance, Group 
Hospital & Surgical Insurance) in place?
• Does he or his dependants have a need for Life or Health Insurance?
• Can he afford to purchase any insurance policy that you are going to propose to 
him? 
• Has he stated his priorities correctly?
Importance of an 
emergency fundGuard against the breadwinner’s loss of a job or a short-term disability that 
interrupts the financial flow of income to the family.
Which stage of the 
prospective client’s life 
cycle versus where the 
need to protect one’s 
earnings against disability 
and ill health, is critical• During active employment years, it is crucial to ensure that one protects his 
earnings against disability resulting from injury or long-term sickness.
• Need for protection against ill health applies to everyone at any stage in his life.
• For older people, they will have a greater need for Critical Illness Insurance, 
Medical Expense Insurance and Long-Term Care Insurance, as there is a higher 
chance of them falling sick or getting injured.
• If there are dependants, provision should be made for their medical expenses 
to avoid any financial burden, in case any of the dependants contracts a major 
illness or becomes disabled.
Know what to do if the 
prospective client has a:
• Disability Income 
Insurance• Compare the level of cover with his current income level to see if the cover is 
sufficient.
• Check if the policy covers up to the target retirement age, the length of the 
deferred period, and whether the prospective client’s employer provides him 
with any disability income benefit.
• Remind the prospective client not to over-insure because of the Limitation 
Clause under the Disability Income Insurance policy.
Know what to do if the 
prospective client has a:
• Life Insurance with 
Total & Permanent 
Disability BenefitCheck for any TPD benefits that the prospective client already has by reviewing the 
existing life insurance policies.
Know what to do if the 
prospective client has a:
• Medical Expense 
Insurance• Find out the exact coverage, such as the hospital and ward entitlement of the 
plan, the annual and lifetime limits, and the policy co-insurance and deductible, 
if any.
• Look at the expiry age and the renewability condition.
• Ensure that the prospective client will be adequately covered in his preferred 
hospital and ward type in the event of hospitalisation, and that he will enjoy the 
coverage for as long as possible and will not risk losing his coverage at a time 
when he needs it most.
• Keep in mind the Co-ordination of Benefit Clause.

52
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Know what to do if the 
prospective client has a:
• Critical Illness 
Insurance• Review whether it is a stand-alone policy or a rider attached to an ILP, Term, 
Endowment or Whole Life Insurance policy.
• Take note of the maximum aggregate sum assured that each client is entitled 
to, if the insurer has such a practice.
Know what to do if the 
prospective client has a:
• Personal Accident 
InsuranceFind out the extent of its coverage, including the details of its exclusions and 
limitations to assess whether the prospective client is adequately covered.
Know what to do if the 
prospective client has a::
• Long-Term Care 
Insurance• Review the benefits that are payable and the benefit trigger point, the 
definitions used for the Activities of Daily Living (ADLs) and the number of ADLs 
needed before the benefits are payable.
• Find out if it is a reimbursement type of benefit, where the payment is based on 
the actual amount of expenses incurred.
Know what to do if the 
prospective client has a:
• Managed Healthcare 
Insurance• Exact amounts of deductible and co-insurance that the prospective client has to 
bear. 
• Bear in mind the Co-ordination of Benefit Clause.


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Know what to do if the 
prospective client has a:
• Managed Healthcare 
Insurance• Exact amounts of deductible and co-insurance that the prospective client has to 
bear. 
• Bear in mind the Co-ordination of Benefit Clause.
Know what to do if the 
prospective client has a:
• Hospital Cash 
InsuranceFind out the daily benefit and the maximum number of days that the benefit is 
payable.
Know what to do if the 
prospective client has a:
• Life Insurance 
Policy & Work Injury 
Compensation 
InsuranceFind out if the prospective client is covered under the statutory Work Injury 
Compensation Insurance policy and whether he has any Life Insurance policy.
Quantify disability income 
protection needs• Method 1
 »Using the monthly salary, 75% of it is his income protection need in the 
event of his disability.
• Method 2
 »This method uses monthly expenses instead of income to determine the 
coverage needed.
• Method 3
 »This method provides a lump sum benefit should a person become totally 
and permanently disabled.
Quantify medical and 
ancillary costsTo quantify medical cost needs, the representative needs to discuss and make 
some assumptions with the prospective clients as follows:
• The most common conditions for a person to be hospitalised; 
• The cost of treatment for any one particular illness, such as a heart condition;
• The hospital type and ward the client would opt for in the event of 
hospitalisation;
• The need to provide coverage for medical cost from the first dollar or can he 
accept a co-payment;
• The continuous affordability of medical insurance premiums when he is no 
longer working.
Quantify hospital cash 
income needsEstimated level of protection needed = 
Total monthly expense 
Less 
Existing hospital cash benefit per month

53
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Quantify Critical Illness 
InsuranceCalculation is really more of an art than a science, since there are many 
uncertainties. Some factors to consider for the prospective client are described 
below:
• Which dread disease is he most susceptible to? His family medical history may 
shed some light on this answer. Therefore, medical costs can be approximated.
• His family’s needs and expenses.
• His family’s level of dependence on him.
• Does he already have sufficient Medical Expense Insurance and/or Disability 
Income Insurance?
• His desired level of medical treatment, e.g. private or public hospital.
• Whether he wants to buy an Additional Benefit Type or Acceleration Benefit 
Type of CI Insurance. If he decides on the Additional Benefit Type, then he must 
be informed that the coverage will normally cease at the age of 65 years, unlike 
the Acceleration Benefit Type. Since the Acceleration Benefit Type is usually 
attached to a Whole Life Insurance policy, this type of benefit will last the whole 
of life.
• Does he want a benefit on early diagnosis of a critical illness, does he want to 
be able to make multiple critical illness claims, does he want to cover other 
conditions such as diabetes or mental illness? 
• His preference and comfort level. Some prospective clients will require only 
S$50,000 CI Insurance cover, while others will feel that even S$500,000 cover is 
insufficient.
Basic principles before 
making any product 
recommendation• Recommend products only if the prospective client needs them.
• Recommend products which are only the most suitable for the prospective 
client, given his existing circumstances.
• If prospective client needs a product that the company you represent does not 
carry, let him know, so that he can find alternatives.
Sample questions to ask 
for better understanding 
of the product• What is the product range?
• What does the product serve to do? For example, reimbursement of expenses 
or replacement of income?
• What are the eligibility criteria for making a claim under the policy?
• Does the policy have any waiting period? If so, find out the duration and 
effective date of the waiting period.
• Is the policy guaranteed renewable, optionally renewable, conditionally 
renewable or cancellable?
• What are the exclusions and limitations under the policy?
• Does the policy have any special features, such as the survival period under a 
Critical Illness Insurance policy, and the requirement to inform the insurer of 
any change in occupation under a Disability Income Insurance policy?
• Is the policy subject to any Co-ordination of Benefit Clause?
• Does the policy have any deductible or co-insurance feature?
• Is there any per day, per year or per lifetime limit under the policy? How much 
are the limits?
• When and how are the benefits payable? For example, a Hospital Cash (Income) 
policy pays a flat amount for each day of hospitalisation capped at a certain 
number of days.
• What are the distribution costs, charges and expenses levied on the products?


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For example, a Hospital Cash (Income) 
policy pays a flat amount for each day of hospitalisation capped at a certain 
number of days.
• What are the distribution costs, charges and expenses levied on the products?
• What is the duration of cover under the policy?
• What are the premiums and the frequency modes for premium payments, and 
are they subject to changes?
• Is there a grace period allowed for the payment of premium due and, if so, what 
is the time frame?
• What is the implication of non-payment of premium?
• What are the medical and non-medical limits (i.e. the underwriting guidelines 
on when a medical test is required for the assessment of an application) of the 
products?
• Which types of policies have non-forfeiture options?
• Is there any geographical limit imposed on the policy?

54
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Why is affordability an 
important factor when 
selecting a suitable 
product to recommend to 
the prospective client?• Affordability is an important factor when selecting the most suitable product to 
recommend to the prospective client. 
• Most policies require regular premiums to be paid. Being able to afford the 
initial premium does not mean that he will be able to sustain the regular 
payments.
• The insurer, the insurance representative and the prospective client do not 
benefit from early policy lapses. 
 »The prospective client loses the coverage. 
 »The insurance representative loses the prospective client’s goodwill and the 
commission payable under the policy. 
 »The insurer has to absorb the high initial cost of underwriting the policy.
Important points on policy 
selection• Ensure that the new recommended policy provides cover only for his coverage 
shortfall to minimise over-insurance.
• Ensure that the prospective client has the longest coverage possible.
• Ensure that the prospective client can afford the premium in the long term.
• Ensure that the prospective client is not over-insured.
• Ensure that the policy insures the right life.
• Ensure that the prospective client with dependants has sufficient death 
protection in place.
• Recommend a rider if it can help to save premiums.
• For Critical Illness (CI) Insurance, take note of the two types of cover - Additional 
Benefit Type and Acceleration Benefit Type.
• Discuss the following with the client - expiry age, premium difference, whether 
he should take up a CI rider if he has existing life policies.
• Consider to attach the CI Waiver of Premium rider for the client who has other 
life insurance protection. 
• For the prospective client who is covered under his employer-sponsored 
Medical Expense Insurance (MEI) and has a need for additional MEI cover, 
ensure that the proposed plan complement the one provided by the employer.   
• Always check for alternative policies to the one that you are recommending.
Example of a systematic 
process of explaining 
recommendations to the 
prospective client• State the purpose of the product (i.e. the need which is actually being met by 
this product).
• Give a description of the nature of the product.
• Brief the prospective client on the benefits and limitations of the product.
• Give a detailed explanation on the options within the product.
• Give a summary of the reasons why the product is being recommended.
• Explain the benefit illustration and highlight the guaranteed and non-
guaranteed benefits (if applicable). 
• Disclose any distribution costs, charges and expenses under the policy.
When the reviews for 
prospective client are 
necessary?• A change in the client’s personal circumstances, such as the birth of a child.
• External developments, such as changes in the CPF ruling which can have an 
impact on the client’s financial position and/or the appropriateness of products 
already held. 
• Original products purchased by the client are not adequate to cover all his need.
• Launching of new products in the financial services market.

15. Case Studies  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   337  
 
      CHAPTER 15  
CASE STUDIES  
 
 
 
 
CHAPTER OUTLINE  
 
1. Introduction  
2. Case Study 1 – Individual Health Insurance  
3. Case Study 2 – Group Health Insurance  
Appendi ces 15A & 15B – Mr Tang’s Existing Health Insurance Policies  
 
 
LEARNING OUTCOMES  
 
After studying this chapter, you should be able to:  
▪ know how to apply the principles that you have learnt from the 
previous chapters to carry out a proper needs -based sale s advisory 
process through looking at two case scenarios  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Health Insurance   
338 Copyright reserved by the Singapore College of Insurance Limited [Version 1.


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4] Contents  
CHAPTER OUTLINE  ................................ ................................ ................................ .........  337 
LEARNING OUTCOMES  ................................ ................................ ................................ .. 337 
1. INTRODUCTION  ................................ ................................ ................................ ....... 339 
2. CASE STUDY 1 – INDIVIDUAL HEALTH INSURANCE  ................................ ............  339 
A. Maintenance Costs  ................................ ................................ ..............................  340 
B. Medical Costs  ................................ ................................ ................................ ....... 341 
3. CASE STUDY 2 – GROUP HEALTH INSURANCE  ................................ ....................  347 
APPENDIX 15A  ................................ ................................ ................................ ................  350 
APPENDIX 15B  ................................ ................................ ................................ ................  351 
 
 


15. Case Studies  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   339  
1. INTRODUCTION  
 
1.1 In this chapter, we bring you through two case studies to show you how the 
whole needs -based sales process may be carried out.  
 
1.2 Note that the case studies given in this chapter are meant only to provide you 
with an illustration of how needs -based selling is done for Health Insurance. 
The circumstances can differ across time and across individuals , as well as 
corporations. Hence, the examples given here cannot be used as a 
comprehensive guide for every situation. You should also keep abreast of the 
LIA and GIA Guidelines On Disclosure Requirements and Needs -Based Sales 
Process for A&H Insurance Products.  
 
1.3 Let us begin by looking at a case study on an individual client.  
  
 
2. CASE STUDY 1 – INDIVIDUAL HEALTH INSURANCE  
 
2.1 Angela  has done  a fact -find with  Tommy Tang, her new client who is a 
Singapore Citizen.  Below is a summary of the data that she has extracted from 
the Fact-Find Document :  
 
Mr Tang  : 38 years old  
Mrs Tang  : 37 years old , housewife  
Son  : 5 years old  
Daughter  : 1 year old  
 
2.2 Existing  Health Insurance Policies:   
▪ Group Hospital & Surgical (H &  S) Insurance (Plan A) (See Appendix 1 5A) 
 
2.3 Angela has also obtained the following information from Tommy : 
▪ Mr and Mrs Tang have sufficient cover for death protection.  
▪ His family’s average monthly expenditure is S$3,000 and his income is 
S$4,000.  
▪ He has not set aside any funds for protection planning , other than his savings 
which is intended to meet any emergency needs, such as hospitalisation.  
▪ He likes to have  a Critica l Illness Insurance policy of S$200,000 for himself 
and S$100,000 for his wife.  
▪ He thinks that he will need maintenance cost for 21 years for his wife in the 
event of his disability , as the youngest child should be independent by then.  
▪ The estimated expenses required for the children in the event of Mrs Tang’s 
disability are S$1,500  per month . 
▪ He and his family would stay in the A ward of a public  hospital should they 
be hospitalised.  
▪ His budget for Health Insurance cover is S$700 per month.  
 
2.4 Having gathered the necessary information, Angela  then proceeds to analyse 
the insurance needs of Tommy  and his family members . 

Health Insurance   
340 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] A. Maintenance Costs  
 
2.5 The most  suitable policy for maintenance cost is Disability Income Insurance .  
 
2.6 Tommy does not have a  Disability Income Insurance policy. He has indicated in 
his Fact-Find Document that he has a n urgent  need for cover for loss of income 
resulting from accident or sickness , as he is the sole breadwinner in his family .  
 
2.7 As such, Angela  propose s a Disability Income Insurance policy with benefit at  
75% of Tommy ’s monthly salary, i.e. S$3,000. This will ensure that the family is 
adequately provided for in the event of Tommy ’s disability. The deferred period 
will be six months , as the employer will continue to pay Tommy ’s salary up to 
six months in the event that he is disabled. Mrs Tang , a housewife, is not eligible 
for Disability Income Insurance. In her case, there are two possible ways to 
provide her with protection against disability, i.e. through the Total and 
Permanent Disability (TPD) Benefit under the  Life Insurance policies , or thro ugh 
a Personal Accident Insurance policy.


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through the Total and 
Permanent Disability (TPD) Benefit under the  Life Insurance policies , or thro ugh 
a Personal Accident Insurance policy.  
 
2.8 The amount  of TPD cover which she requires is as follows:  
 
Maintenance Costs Required On Mrs Tang’s Disablement  
Yearly income needed  
 
 
Number of years income 
is needed  
 
Expected annual rate of 
return from funds 
(adjusted for inflation)  
 
Estimated funds required 
to provide income  
 
Less  Funds available  
Existing Insurance  
 
Funds required  : S$1,500 (current monthly expenditure) x 12  
 = S$18,000  
 
: 21 years  
 
 
: 3% (assume that rate of return is 5% , and 
inflation rate  is 2%)  
 
 
: S$18,000 x 15.8775  (refer to Table A2 at end of 
this Study Guide ) = S$285,79 5 
 
: S$0 
 
 
: S$285,79 5 
 
2.9 Having determined the maintenance costs for the Tangs, Angela then goes on 
to determine whether the Tangs’ current Medical Expense Insurance policies 
are sufficient to meet their needs.  

15. Case Studies  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   341  
B. Medical Costs  
 
2.10 The policies that may be used to meet medical costs are:  
▪ Medical Expense Insurance ; 
▪ Managed Healthcare Insuranc e;  
▪ Long -Term Care Insurance ; 
▪ Critical Illness Insurance ;  
▪ Hospital Cash Insurance ; and  
▪ Personal Accident policy with medical expense benefit . 
 
2.11 According to the fact -find results, Tommy  only has Medical Expense Insurance  
coverage  under his employer’s insurance . Angela  informed Tommy that Group 
H&S is not portable and that he may lose it later or the coverage may change if 
he moves into a different job  or retire . They agreed to consider Group H&S as 
a temporary  (not lifetime)  benef it instead. She then proceeds to determine the 
coverage he requires for Medical Expense Insurance policies to meet the Tangs’ 
needs in the event of hospitalisation.  
 
2.12 These  were  steps taken  by Angela  to review  and recommend  a suitable  Medical 
Expense Insur ance:  
▪ Confirm his preference of stay in the event of hospitalisation  then  discuss 
the top 10 condition s of hospitalisation with Tommy to give him an 
indication  of the total hospital bill amount of a medical condition he wish 
to know . 
▪ Briefly compute what his Group H&S would have covered him in that 
medical condition  to provide  a view if it can cover a portion of co-insurance 
and deductible  of a hospitalisation  for as long as the GHS is valid.  
▪ Present  a medical expense insurance plan that will provide cover for Public 
Ward A hospitalisation, showing the current  and future annual premium s 
of the proposed p lan.  Tommy  should be informed  that the premium rate is 
non-guaranteed and in view of medical inflation, it  is likely that premiums 
seen in current premium table will  change and get even more expensive  in 
the future . This is to give a practical view of the future affordability of 
premium on the chosen plan.  
 
2.13 Step  1 
Tommy has indicated preference to stay in Ward A of Public Hospital, and 
having gone through the top 10 conditions of hospitalisation, Tommy wanted 
to know the average cost of Heart Bypass. Angela has found out from the MOH 
Website  that for a heart coronary disease (coronary artery bypass graft) in an A 
ward in public hospital, the total bill amount  is in the range of S$36,091 and 
S$42,8761 and average length of stay for this condition is 10 days.  This gave 
Tommy an indication of the average total amount required today for a Heart 
Bypass surgery.  
 
 
 
1 Source: MOH Website – www.moh.gov.sg   


Health Insurance   
342 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 2.14 Step 2  
Angela computes the amount payable under Tommy’s existing Group H&S  
should he be hospitalised for Heart Bypass Surgery .


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4] 2.14 Step 2  
Angela computes the amount payable under Tommy’s existing Group H&S  
should he be hospitalised for Heart Bypass Surgery . 
 
Amount payable under Group H & S p olicy2 
 
Inpatient Benefit3 (S$360 x 10 days)  S$ 3,600  
Surgical Benefit  S$15,000  
Total Amount Payable  S$18,600  
  
2.15 Subject  to the Co -ordination of Benefits Clause  and policy terms and conditions, 
the benefits payable under Group H&S can be used to cover part of co -
insurance and deductible of the average bill size of the medical condition.  Hence 
it may not be necessary to have fi rst dollar cover for his individual medical 
expense insurance. This way, he can save some premiums to fund for future 
premiums. However, Angela highlighted to Tommy that once he lose the Group 
H&S, his co -payments for any hospitalisation has to be out -of-pocket.   Tommy 
acknowledged this and agreed to go with a plan that has deductible and co -
insurance in order to lower the premiums.  
 
2.16 Step 3  
Next, Angela presented the recommended plan and premium table to Tommy 
for his consideration.  
  
2.17 The discussion with Tommy on affordability should not just be on current, but 
also on future sustainability to pay premiums, whether with Medisave or cash.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 Please refer to Appendix 1 5A for coverage details of Tommy’s Group H & S policy.  
3 Please refer to Appendix 1 5B for average length of stay for Heart Surgery.  

15. Case Studies  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   343  
Table of Premium Rates  
Enhanced IncomeShield Yearly Premium Rate for insured person who is a Singapore Citizen or 
Permanent Resident  
 
Age  
Next 
birthday^  MediShield 
Life 
Premiums 
(Fully 
Payable by 
MediSave)~  Additional 
Withdrawal 
Limits 
(AWLs)  Additional private insurance coverage  
Enhanced IncomeShield  
Preferred  Advantage  Basic – SG Basic – PR 
Premiums  Cash 
Outlay  Premiums  Cash 
outlay  Premiums  Cash 
outlay  Premiums  Cash 
outlay  
1 to 18  $130   
 
 
 
 
$300  $205  - $69 - S49 - $56 - 
19 to 20  $130  $252  - $87 - $73 - $78 - 
21 to 30  $195  $255  - $71 - $57 - $62 - 
31 to 35  $310  $375  $75 $104  - $71 - $81 - 
36 to 40  $310  $392  $92 $128  - $81 - $99 - 
41 to 45  $435   
 
 
 
 
$600  $648  $48 $212  - $123  - $151  - 
46 to 50  $435  $766  $166  $224  - $140 - $170  - 
51 to 55  $630  $888  $288  $343  - $154  - $185  - 
56 to 60  $630  $1,162  $562  $379  - $166  - $198  - 
61 to 65  $755  $1,592  $992  $603  $3 $308  - $367  - 
66 to 70  $815  $2,250  $1,650  $912  $312  $477  - $578  - 
71 to 73  $885   
 
 
 
 
 
 
 
 
 
 
 
 
$900  $3,113  $2,213  $1,299  $399  $725  - $871  - 
74 to 75  $975  $3,553  $2,653  $1,544  $644  $859  - $1,031  $131  
76 to 78  $1,130  $3,994  $3,094  $1,877  $977  $1,026  $126  $1,238  $338  
79 to 80  $1,175  $4,506  $3,606  $2,169  $1,269  $1,162  $262  $1,398  $498  
81 to 83  $1,250  $4,726  $3,826  $2,242  $1,342  $1,275  $375  $1,


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398  $498  
81 to 83  $1,250  $4,726  $3,826  $2,242  $1,342  $1,275  $375  $1,508  $608  
84 to 85 $1,430  $5,270  $4,370  $2,561  $1,661  $1,502  $602  $1,775  $875  
86 to 88  $1,500  $5,890  $4,990  $2,849  $1,949  $1,656  $756  $2,169  $1,269  
89 to 90  $1,500  $6,455  $5,555  $3,152  $2,252  $1,929  $1,029  $2,491  $1,591  
91 to 93  $1,530  $6,414  $5,714  $3,487  $2,587  $2,308  $1,408  $2,939  $2,039  
94 to 95  $1,530  $7,143  $6,243  $3,878  $2,978  $2,573  $1,673  $3,250  $2,350  
96 to 98  $1,530  $7,641  $6,741  $4,249  $3,349  $2,836  $1,936  $3,560  $2,660  
99 to 100  $1,530  $8,117  $7,217  $4,609  $3,709  $3,108  $2,208  $3,881  $2,981  
Over 100  $1,530  $8,289  $7,389  $4,985  $4,085  $3,395  $2,495  $4,221  $3,321  
SG: Singapore Citizen        PR: Singapore Permanent Resident  
^ The last entry age is 75, based on the insured’s age next birthday.  
~ Your MediShield Life premiums may differ depending on your premium subsidies, premium rebates and whether you need to 
pay for the Additional Premiums. The net MediShield Life premium payable after accounting for these is fully payable by 
MediSave.  
# This refers to the cash outlay if you ar e paying by MediSave (assuming you have sufficient monies in your MediSave account). 
If you are not paying by MediSave, your total cash outlay will be equal to MediShield Life Premiums + Premiums for Additional  
private insurance coverage. For example, for an insured aged 30 (at next birthday) buying Enhanced IncomeShield Preferred 
plan, the total premium = $195 +$255 = $450  
 
Source: https://www.income.com.sg/health -insurance/enhanced -incomeshield/citizen -pr-premium -table  
 
 
 
 


Health Insurance   
344 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 2.18 The Tangs  also require Critical Illness Insurance cover , as the medical expenses 
incurred in the event of a critical illness may not be fully covered by Tommy’s 
policies. They will also need Long -Term Care Insurance cover (under 
ElderShield) if they can afford the premiu m, as the cover is not insured  by his 
two existing policies.   
 
2.19 As the Tangs already have policies for protection against premature death, 
Angela  propose d a 100% Acceleration Benefit type of Critical Illness Insurance 
policy packaged with a Whole Life Insurance policy , so that they can have the 
cover for life. This policy will also take care of Mrs Tang’s TPD needs.


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This policy will also take care of Mrs Tang’s TPD needs.  To 
summarise, the package for Mr and Mrs Tang is shown in Table 1 5.1 below : 
 
Table 1 5.1: Summary Of Insurance Package For Mr & Mrs Tang  
  
 Mr Tang  (Tommy ) 
Type Of Plan & Sum Assured  Monthly  
Premium  
Enhance Income Shield Advantage Plan  $438/year and 
Fully funded by 
Medisave  
100% Acceleration Benefit Type of Critical Illness 
Insurance policy packaged with Whole Life Insurance 
policy - S$200,000  S$480.80  
Disability Income Insurance of S$3,000 with six months ’ 
deferred period up to the age of 65 years  S$38.45  
Total Monthly Premium  with cash   S$519.25  
  
 Mrs Tang  
Type Of Plan & Sum Assured  Monthly  
Premium  
Enhance Income Shield Advantage Plan  $438/year and 
Fully funded by 
Medisave  
100% Acceleration Benefit Type of Critical Illness 
Insurance policy packaged with Whole Life Insurance 
policy - S$100,000  S$160.00  
Personal Accident (PA) Insurance policy - S$50,000  S$5.00  
Total Monthly Premium with cash  S$165.00  
 
Two Children  
Type Of Plan & Sum Assured  Monthly 
Premium  
Enhance Income Shield Advantage Plan  $199/year  per 
child  and Fully 
funded by 
Medisave  
 

15. Case Studies  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   345  
2.20 The total premium payable with cash works out to be S$684.25 (i.e. S$519.25  + 
S$165.00) and is within Tommy ’s budget. As there is no excess premium for the 
Long -Term Care Insurance cover, Angela  has decided not to propose it at this 
moment.  
 
2.21 Having decided on the types of policies that are suitable to Tommy , Angela  next 
proceeds to complete the “Representative Recommendations” section of the 
Fact-Find Document .  
 
REPRESENTATIVE’S RECOMMEND ATIONS 
Please  note that the  information  that you provide will be the basis  on which advice 
will be given. Plea se also note that a ny inaccurate or incomplete information 
provided may affect the suitability of the rec ommen dations presented to you. 
Client’s Objective(s) 
Client’s concern, investment 
objectives, shortfall  amount  ($), 
time horizon,  investment risk 
profile, where applicable He likes to have a Critical Illness Insurance 
policy of S$200,000 for himself and 
S$100,000 for his wife.  
Plan(s) Recommendation 
Full name  of plan and rider, 
duration,  sum assured ($), 
premium ($)/frequency, fund 
nam e(s), investment amount  and 
respective risk classification,  
where applicable 
 
 
Reason(s) for Recommendations 
▪ State  how the plan meets the 
Client’s need(s). 
▪ State  and explain  features and 
benefits relating  to the product  
sold. 
 
Risk / Limitation(s) of Plan 
▪ State  any possible risks 
relating  to the product  sold. 
▪ State  possible disadvantage(s) 
based on circumstances of the 
Client. ▪ Medical Expense  Insurance  
Proposed Enhanced IncomeShield 
Advantage Plan for the entire family 
which are fully payable with Medisave. 
This plan provide s cover for up to 
Public Hospital Ward A in the event of 
hospitalisation. There is co -insurance 
and deductible on this po licy to make 
the premium affordable.  
 
▪ Critical  Illness Insurance Policy  
Tommy  
Proposed a 100% Acceleration Benefit 
Type of Critical Illness Insurance cover 
packaged with a Whole Life Insurance 
policy – sum assured of S$200,000 as 
specified  by Tommy.  
This policy is suitable for Tommy’s 
budget. It will provide him with death, 
disability and critical illness coverage. 
It serves to supplement the Whole Life 
Insurance policy in providing for the 
family, in the event of his early 
demise.  

Health Insurance   
346 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] REPRESENTATIVE’S RECOMMEND ATIONS 
Reason(s) for Deviation(s) 
Reasons for any deviation  from 
client’s profile, objectives and/or  
representati ve’s recommendatio ns 
(where applicable) 
 
▪ Premiums are more  than  Client’s 
budget 
▪ Funds  recommended (e.g.


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ILP 
sub-fund,  par fund)  are of a 
higher  risk than client’s risk 
preference 
 
Client’s choice of product/ funds 
differs from representati ve’s 
recommended plan/funds  Besides, it provides life cover for him. In 
other words, it ensures that he is covered 
in his old age.  
 
     Mrs Tang  
Proposed a 100% Acceleration Benefit 
Type of Critical Illness Insurance cover 
packaged with a Whole Life Insurance 
policy – sum assured of S$100,000 as 
specified by Mr Tang.  
 
This policy will give Mrs Tang the 
additional TPD cover that she needs. It 
will also provide her with life cover, thus 
ensuring that she will be covered in her 
old age when her need is the greatest.  
 ▪ Disability Expense Protection  
Tommy  
Propose d a Disability Income Insurance 
policy of S$3,000 (75% of salary) with a six 
months’ deferred period up to the age of 
65 years  
  
This policy is considered suitable for 
Tommy, because it will provide his family 
with a monthly income in the event that 
he is t otally or partially disabled.  
 
Mrs Tang  
Has not proposed Disability Income 
Insurance policy, as she is not working 
and, hence, not eligible.  
 
Has proposed a PA Insurance policy of 
S$50,000 to make up the shortfall for TPD 
cover after she takes up the S$100,000 
Critical Illness Insurance policy. This 
policy is recommended, as it will provide 
her with cover for death, TPD and 
medical expenses at a  very low cost. This 
means to say that this policy may also 
help to take care of the shortfall in 
Medical Expense Insurance cover.   
 
 
 
  
2.22 Having  finalised  the insurance package to be recommended to the client, 
Angela  then arranges to meet up with his client , and present s the package to 
him.  
 
2.23 Note that it is worthwhile to repeat that the case study illustrates a possible set 
of recommendations among others. As a result, certain plausible suggestions 
have not been discussed , such as Outpatient cover , or extending the client’s 
coverage to include accidental loss of limbs , or medical expenses arising from 
accidents.  

15. Case Studies  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   347  
2.24 As an insurance  representative, you should also be thoroughly aware of “Your 
Guide To Health Insurance”, as well as the “Evaluating My Health Insurance 
Coverage” sheet issued by LIA in conjunction with the MoneySENSE national 
financial education programme. You can view an d download them from the LIA 
Website at: www.lia.org.sg   
 
2.25 You should bring these documents to the attention of your prospective client 
and discuss them with him.  
 
 
3. CASE STUDY 2 – GROUP HEALTH INSURANCE  
 
3.1 We will now look at another case study focusing on a prospective client’s need 
for Group Health Insurance. Apex Services Company  Private Limited  has 
approached you for quotations on Group Term Life and Health Insurance 
policies  to cover  its employees as part of its employee benefit package. As the 
Company wants the policies to be tailored to their needs, you will have to get 
the Company to complete the Group  Insurance  Fact-Finding (GIFF) Form.  Note 
that the format of the Form may vary for dif ferent insurers.  
 
3.2 Before proceeding further, you need to find out whether the Company (i.e. the 
prospective client) meets your  insurer ’s underwriting requirements in terms of 
group size and group stability, etc.  
 
3.3 Once you have established that the prospective client is eligible for the group 
coverage, you may then proceed to explain to your prospective client the 
following:  
▪ the types of  policies available and the benefits offered;  
▪ the advantages of joining the Portable Medical Benefits Scheme or 
Transferable  Medical Insurance Scheme , as well as how these schemes 
work; and  
▪ the differences between compulsory and voluntary participation , as well as 
their advantages.  
 
3.4 In addition, you will need to help your prospective client to determine the 
amount of sum assured for each category of employee s. If your prospective 
client has an existing plan , they  may wish to stick to the same amount of benefit , 
or make some minor adjustments to it. For a prospective client buying the 
Group Term Life I nsurance for the first time, it is your responsibility to help the  
prospective  client  to determine the sum assured.


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For a prospective client buying the 
Group Term Life I nsurance for the first time, it is your responsibility to help the  
prospective  client  to determine the sum assured. There are two common 
methods which can be used, i.e.:  
▪ according to rank; or  
▪ number of times of the employee’s basic salary.  
 
3.5 The first method is easier to manage , as it goes according to the rank of the 
employee. However, it does not take into account the length of service of the 
staff concerned .  
 
 


Health Insurance   
348 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 3.6 For example, a new staff joining as an executive will get the same amount of 
benefit , as one who has been with the company for two years , although his pay 
may be lower than the more experienced staff. The second method, on the other 
hand, takes into account the length of service , as the salary of a  more 
experienced  staff is likely to be hi gher than that of a new staff . Hence , this 
method may be more equitable as compared to the former method. You may 
also ask for the client’s budget , as this will also help to determine the sum 
assured to be  covered .  
 
3.7 For instance, in this case, your prospe ctive client has told you that the Company 
prefers to go by the ranking method. Based on the budget given, you can then 
design a plan , such as the one below:  
 
Category  Sum Assured Per Person  
Term Assurance  Living Assurance  
Senior Management  S$200,000  S$100,000  
Managers/Executives  S$100,000  S$  50,000  
Assistant Executives  S$  50,000  S$  25,000  
Clerks  S$  20,000  S$  10,000  
 
3.8 By attaching the 50% Acceleration Critical Illness Insurance cover as a rider to 
the Group Term Life Insurance policy, it will help your prospective client to 
provide the benefit at an affordable amount (if there is a constraint in the 
amount that the Company can spend).  
 
3.9 For the Group Hospital & Surgical Insurance  policy, you can also plan according 
to the ranking method as follows:  
 
Category  Plan 
Senior Management  Plan 1 – Room & Board SS$250 
Managers/Executives  Plan 2 – Room & Board SS$150 
Others  Plan 3 – Room & Board SS$100 
 
3.10 Next, obtain the Company’s past three  years  of claims history. The claims 
history is very important , as this will determine the premium to be charged.  
 
3.11 Note also that your  prospective  client must duly complete and sign the GIFF 
Form. It is important that you sign th is Form too . The insurer is not allowed to 
give any quotation , unless this Form has been duly completed and signed.  
 
3.12 Having completed the GIFF Form, submit it to the insurer to work out a 
quotation for your presentation to the prospective client.  
 
3.13 The sales quotation will include the coverage, underwriting guidelines, 
premium chargeable, exclusions and waiting periods, etc. You have to go 
through the quotation and high light the important points that your prospective 

15. Case Studies  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   349  
client needs to be aware of, e.g. exclusions , limitations, restricted provisions 
and conditions , as well as no free -look period applicable to any Group Insurance 
policy.  
 
3.14 Once your prospective client accepts the quotation, you need to assist in the 
completion of the  proposal and health declaration forms , if necessary , and 
submit them together with the  premium  payment to the insurer. You need to 
arrange for the medical examination , if any of the employees ’ coverage  falls 
outside the free cover limit . 
 
 

Health Insurance   
350 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] APPENDIX  15A 
 
ABC INSURANCE COMPANY (SINGAPORE) LIMITED  
 
Group Hospital & Surgical Insurance  
 
Schedule Of Benefits  
(Maximum Per Any One Disability)  Plan A  
(S$) Plan B  
(S$) Plan C  
(S$) 
Daily Room & Board (Max. 120 days)  360 280 220 
Intensive Care Unit (Max.


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120 days)  360 280 220 
Intensive Care Unit (Max. 30 days)  1,035  840 600 
Other Hospital Services ( Including 
Implants)  4,500  4,000  3,500  
Surgical Benefit  15,000  15,000  10,000  
In-Hospital Doctor’s Consultation (Max. 
120 Days) 100 90 75 
Emergency Out -Patient Treatment 
(Accident)  2,500  2,000  1,750  
Pre - & Post -Hospitalisation Specialists’ 
Consultation, Diagnostic X -ray & 
Laboratory Test  1,700  1,500  1,400  
Hospitalisation in Singapore Government 
Hospital or Singapore Government 
Restructured Hospital (Overall Maximum 
Limit Per Disability)  17,250  14,000  10,000  
Death Benefit  3,000  3,000  3,000  
Outpatient Kidney Dialysis/Cancer 
Treatment  10,000  10,000  10,000  
 
 
 
 
 
 
 
 
 
 
  


15. Case Studies  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   351  
APPENDIX 15B  
 
 
Benefits  Enhanced IncomeShield  
(Payout includes MediShield Life 
payout)  
Preferred  Advantage  Basic  
 
Ward entitlement  Standard room in 
private hospital  
or private  medical 
institution  Restructured 
hospital for 
ward class  A and 
below  Restructured 
hospital  for 
ward class B1 
and below  
Inpatient hospital treatment  Limits of compensation  
Daily ward and treatment 
charges (each day)  
- Normal ward  
- Intensive care unit ward   
As charged  
Surgical benefits (including 
day surgery)  
Organ  transplant  benefit  
(including  stem -cell 
transplant)  
Surgical implants  
Radiosurgery  
Accident inpatient dental 
treatment  
 As charged   
 
Pre-hospitalisation treatment  Not provided by 
our panel:  up to 
100 days before 
admission  
Provided  by our 
panel: Up to 180  
days  before 
admission¹²   
As charged  
Up to 100 days before 
admission  
 As charged   
 
Post-hospitalisation 
treatment  Not provided by 
our panel:  up to 
100 days after 
discharge  
Provided  by our 
panel: Up to 365 
days after 
discharge   
As charged  
Up to 100 days after 
discharge  
Community hospital 
(Rehabilitative) As charged  
(up to 90 days for each admission)  
Community hospital  
(Sub -acute) 
Inpatient palliative care 
service (General)   
As charged  
Inpatient palliative care 
service (Specialised)


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Health Insurance   
352 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  
Benefits  Enhanced IncomeShield  
(Payout includes MediShield Life 
payout)  
Preferred  Advantage  Basic  
Outpatient hospital 
treatment  Limits of compensation  
Radiotherapy for cancer  
- External (except Hemi -
body)  
- Brachytherapy  
- Hemi -body  
- Stereotactic   
As charged  
Chemotherapy for cancer  
Immunotherapy for cancer  
Kidney dialysis  
Erythropoietin for chronic 
kidney failure  
Immunosuppressants for 
organ transplant  
Long -term parenteral nutrition  
Special benefits  Limits on special benefits  
Breast Reconstruction after 
Mastectomy  As charged  
Congenital abnormalities 
benefit  As charged  
(with 12 months’ waiting period)  
Pregnancy  and delivery -
related  complications benefit  As charged  
(with 10 months’ waiting period)  
 
Living organ donor (insured) 
transplant benefit  – insured  as 
the living  donor  donating an 
organ  As charged, up to 
$60,000 (each  
transplant with  24 
months’ waiting 
period for the 
person receiving  
the organ)  As charged, up to 
$40,000 (each  
transplant with  24 
months’ waiting 
period for the 
person receiving  
the organ)  As charged, up 
to $20,000 (each  
transplant with  
24 months’ 
waiting period 
for the person 
receiving  the 
organ)  
Living  organ  donor  (non -
insured)  transplant benefit 
(each transplant) – insured as 
the recipient of organ  As charged, 
up to $60,000  Covered  up to MediShield  Life 
benefits only  
Cell, tissue  and gene  therapy  
benefit  (each policy year)  As charged, 
up to $250,000  As charged, up  
to $150,000  
Proton beam therapy  
(each policy year)  As charged, 
up to $100,000  As charged, up  
to $70,000  
Continuation of autologous 
bone marrow transplant  
treatment  for multiple  
myeloma (each policy year)  As charged, 
up to $25,000  As charged, up  
to $10,000  
Inpatient  psychiatric  
treatment  benefit  
(each policy year)  
 
 As charged, 
up to $7,000  As charged, 
up to $5,000  


15. Case Studies  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   353  
 
Benefits  Enhanced IncomeShield  
(Payout includes MediShield Life 
payout)  
Preferred  Advantage  Basic  
Special benefits  Limits on special benefits  
Prosthesis benefit (each 
policy year)  As charged, up  to 
$10,000  As charged, up  to $6,000  
 Emergency overseas 
treatment  As charged but 
limited to costs of 
Singapore private 
hospitals  As charged but 
limited to costs of 
ward class A in 
Singapore 
restructured 
hospitals  As charged but 
limited to costs 
of ward class B1 
in Singapore 
restructured 
hospitals  
Waiver  of pro-ration  factor  for 
outpatient kidney dialysis   
Does not apply  Waive  pro-ration  factor  for applicable 
treatment provided by our preferred 
partner  
Final  expenses  benefit  
(waiver  of co -insurance and 
deductible)  $5,000  $3,000  
Pro-ration factor  SG/PR/FR  
Inpatient  
− Restructured hospital     
- Ward class C, B2 or B2+   Does not apply  Does not apply  
- Ward class B1   Does not apply  Does not apply  
- Ward class A   Does not apply  85% 
− Private hospital or private 
medical institution or 
emergency overseas 
treatment  Does not apply  65% 50% 
− Community hospital     
- Ward class C, B2 or B2+   Does not apply  Does not apply  
- Ward class B1   Does not apply  Does not apply  
- Ward class A   Does not apply  85% 
  Day surgery or short -stay ward  
− Restructured hospital 
subsidised  
 
− Restructured hospital non -
subsidised  
 
−  Private hospital or private 
medical institution or 
emergency overseas 
treatment  
 
 
 
 
 
  
 
 
 
 
 
Does not apply  Does  not apply  
 
 
Does  not apply  
 
 
 
65% Does  not apply  
 
 
Does  not apply  
 
 
 
50%


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Health Insurance   
354 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  
Benefits  Enhanced IncomeShield  
(Payout includes MediShield Life 
payout)  
Preferred  Advantage  Basic  
  Outpatient hospital treatment  
− Restructured hospital 
subsidised  
− Restructured  hospital  non-
subsidised  
– Private hospital or private 
medical institution   
 
 
Does not apply  Does  not apply  
 
Does  not apply  
 
65% Does  not apply  
 
Does  not apply  
 
50% 
SG: Singapore Citizen  | PR: Singapore Permanent Resident  | FR: Foreigner  
 
 
Benefits  Preferred  Advantage  Basic  
Deductible for each policy year for an insured aged 80 years or below next birthday  
Inpatient  
– Restructured hospital     
- Ward class C  $1,500  $1,500  $1,500  
- Ward class B2 or B2+  $2,000  $2,000  $2,000  
- Ward class B1  $2,500  $2,500  $2,500  
- Ward class A  $3,500  $3,500  $2,500  
– Private hospital or private 
medical institution or 
emergency overseas 
treatment   
$3,500   
$3,500   
$2,500  
– Community hospital     
- Ward class C  $1,500  $1,500  $1,500  
- Ward class B2 or B2+  $2,000  $2,000  $2,000  
- Ward class B1  $2,500  $2,500  $2,500  
- Ward class A  $3,500  $3,500  $2,500  
Day surgery or short -stay ward  
− Subsidised  $2,000  $2,000  $2,000  
− Non-subsidised  $3,500  $3,500  $2,500  
Deductible for each policy year for an insured aged over 80 years at next birthday  
Inpatient  
– Restructured hospital     
- Ward class C  $2,250  $2,250  $2,250  
- Ward class B2 or B2+  $3,000  $3,000  $3,000  
- Ward class B1  $3,750  $3,750  $3,750  
- Ward class A  $5,250  $5,250  $3,750  
– Private hospital or private 
medical institution or 
emergency overseas 
treatment   
$5,250   
$5,250   
$3,750  
– Community hospital     
- Ward class C  $2,250  $2,250  $2,250  
- Ward class B2 or B2+  $3,000  $3,000  $3,000  
- Ward class B1  $3,750  $3,750  $3,750  


15. Case Studies  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   355  
Benefits  Preferred  Advantage  Basic  
- Ward class A  $5,250  $5,250  $3,750  
Day surgery or short -stay ward  
− Subsidised  $3,000  $3,000  $3,000  
− Non-subsidised  $5,250  $5,250  $3,750  
    
    
Co-insurance  10% 
Limit in each policy year  $1,500,000  $500,000  $250,000  
Limit in each lifetime  Unlimited  
Last entry age (age next 
birthday)  75 
Maximum coverage age  Lifetime  
 
Source:  https://www.income.com.sg/kcassets/78476c34 -20c6 -4a95 -a9e5 -
6a5a14dc6ab3/Enhanced%20IncomeShield%20Brochure_Website.pdf


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55
CASE STUDIES
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Case Study 1
Individual Health 
Insurance• Information collected from client.
• Complete fact find form.
• What policy is suitable for maintenance cost?
1. Review and recommend.
• What policy is suitable for medical costs?
1. Review and recommend.
• Representative’s Recommendations
• Disclosures and documentations.
Case Study 2
Group Health Insurance• Assess if the prospective client meets the insurer’s underwriting requirements 
in terms of group size and group stability, etc.
• Explain to the prospective client the following:
1. The types of policies available and the benefits offered;
2. The advantages of joining the Portable Medical Benefits Scheme or 
Transferable Medical Insurance Scheme, as well as how these schemes 
work; and
3. The differences between compulsory and voluntary participation, as well as 
their advantages.
• Determine the amount of sum assured for each category of employees.
• Complete GIFF form.
• Sales quotations and documentations.CHAPTER
15
Below are just some of the pointers to take for Individual Health Insurance and Group Health Insurance. This chapter 
requires candidates to apply the principles learnt from the previous chapters to carry out a proper needs-based sales 
advisory process.


Tables  
356 Copyright reserved by the Singapore College of Insurance Limited  [V1.4]  
 
 
  
 
   
 
 
 
 
 
Table A 1 FUTURE VALUE OF ANNUITY FACTORS  
 
 
Table A 2 PRESENT VALUE OF AN ANNUITY DUE OF ONE DOLLAR  
 
 
    
 
       
 
  
 
                                                                                  
  
 
  


                Tables   
Copyright reserved by the Singapore College of Insurance Limited  [Version 1.4] 357 Time Value Of Money Tables  
 
TABLE A 1 
FUTURE VALUE OF ANNUITY FACTORS  
FVA Factor = [(1+i)n−1] / i where i = rate and n = periods  
i = 0.5%  1% 1.5%  2% 2.5%  3% 3.5%  4% 4.5%  5% 
n=1 1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  
2 2.0050  2.0100  2.0150  2.0200  2.0250  2.0300  2.0350  2.0400  2.0450  2.0500  
3 3.0150  3.0301  3.0452  3.0604  3.0756  3.0909  3.1062  3.1216  3.1370  3.1525  
4 4.0301  4.0604  4.0909  4.1216  4.1525  4.1836  4.2149  4.2465  4.2782  4.3101  
5 5.0503  5.1010  5.1523  5.2040  5.2563  5.3091  5.3625  5.4163  5.4707  5.5256  
            
6 6.0755  6.1520  6.2296  6.3081  6.3877  6.4684  6.5502  6.6330  6.7169  6.8019  
7 7.1059  7.2135  7.3230  7.4343  7.5474  7.6625  7.7794  7.8983  8.0192  8.1420  
8 8.1414  8.2857  8.4328  8.5830  8.7361  8.8923  9.0517  9.2142  9.3800  9.5491  
9 9.1821  9.3685  9.5593  9.7546  9.9545  10.1591  10.3685  10.5828  10.8021  11.0266  
10 10.2280  10.4622  10.7027  10.


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10 10.2280  10.4622  10.7027  10.9497  11.2034  11.4639  11.7314  12.0061  12.2882  12.5779  
            
11 11.2792  11.5668  11.8633  12.1687  12.4835  12.8078  13.1420  13.4864  13.8412  14.2068  
12 12.3356  12.6825  13.0412  13.4121  13.7956  14.1920  14.6020  15.0258  15.4640  15.9171  
13 13.3972  13.8093  14.2368  14.6803  15.1404  15.6178  16.1130  16.6268  17.1599  17.7130  
14 14.4642  14.9474  15.4504  15.9739  16.5190  17.0863  17.6770  18.2919  18.9321  19.5986  
15 15.5365  16.0969  16.6821  17.2934  17.9319  18.5989  19.2957  20.0236  20.7841  21.5786  
            
16 16.6142  17.2579  17.9324  18.6393  19.3802  20.1569  20.9710  21.8245  22.7193  23.6575  
17 17.6973  18.4304  19.2014  20.0121  20.8647  21.7616  22.7050  23.6975  24.7417  25.8404  
18 18.7858  19.6147  20.4894  21.4123  22.3863  23.4144  24.4997  25.6454  26.8551  28.1324  
19 19.8797  20.8109  21.7967  22.8406  23.9460  25.1169  26.3572  27.6712  29.0636  30.5390  
20 20.9791  22.0190  23.1237  24.2974  25.5447  26.8704  28.2797  29.7781  31.3714  33.0660  
            
21 22.0840  23.2392  24.4705  25.7833  27.1833  28.6765  30.2695  31.9692  33.7831  35.7193  
22 23.1944  24.4716  25.8376  27.2990  28.8629  30.5368  32.3289  34.2480  36.3034  38.5052  
23 24.3104  25.7163  27.2251  28.8450  30.5844  32.4529  34.4604  36.6179  38.9370  41.4305  
24 25.4320  26.9735  28.6335  30.4219  32.3490  34.4265  36.6665  39.0826  41.6892  44.5020  
25 26.5591  28.2432  30.0630  32.0303  34.1578  36.4593  38.9499  41.6459  44.5652  47.7271  
            
26 27.6919  29.5256  31.


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26 27.6919  29.5256  31.5140  33.6709  36.0117  38.5530  41.3131  44.3117  47.5706  51.1135  
27 28.8304  30.8209  32.9867  35.3443  37.9120  40.7096  43.7591  47.0842  50.7113  54.6691  
28 29.9745  32.1291  34.4815  37.0512  39.8598  42.9309  46.2906  49.9676  53.9933  58.4026  
29 31.1244  33.4504  35.9987  38.7922  41.8563  45.2189  48.9108  52.9663  57.4230  62.3227  
30 32.2800  34.7849  37.5387  40.5681  43.9027  47.5754  51.6227  56.0849  61.0071  66.4388  
            
35 38.1454  41.6603  45.5921  49.9945  54.9282  60.4621  66.6740  73.6522  81.4966  90.3203  
40 44.1588  48.8864  54.2679  60.4020  67.4026  75.4013  84.5503  95.0255  107.030  120.800  
45 50.3242  56.4811  63.6142  71.8927  81.5161  92.7199  105.782  121.029  138.850  159.700  
50 56.6452  64.4632  73.6828  84.5794  97.4843  112.797  130.998  152.667  178.503  209.348  

Tables  
358 Copyright reserved by the Singapore College of Insurance Limited  [V1.4] Time Value Of Money Tables  
 
TABLE A 1 (CONTINUED)  
FUTURE VALUE OF ANNUITY FACTORS  
FVA Factor = [(1+i)n−1] / i where i = rate and n = periods  
i = 5.5%  6% 6.5%  7% 7.5%  8% 8.5%  9% 9.5%  10% 
n=1 1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  
2 2.0550  2.0600  2.0650  2.0700  2.0750  2.0800  2.0850  2.0900  2.0950  2.1000  
3 3.1680  3.1836  3.1992  3.2149  3.2306  3.2464  3.2622  3.2781  3.2940  3.3100  
4 4.3423  4.3746  4.4072  4.4399  4.4729  4.5061  4.5395  4.5731  4.6070  4.6410  
5 5.5811  5.6371  5.6936  5.7507  5.8084  5.8666  5.9254  5.9847  6.0446  6.1051  
            
6 6.8881  6.9753  7.0637  7.


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6 6.8881  6.9753  7.0637  7.1533  7.2440  7.3359  7.4290  7.5233  7.6189  7.7156  
7 8.2669  8.3938  8.5229  8.6540  8.7873  8.9228  9.0605  9.2004  9.3426  9.4872  
8 9.7216  9.8975  10.0769  10.2598  10.4464  10.6366  10.8306  11.0285  11.2302  11.4359  
9 11.2563  11.4913  11.7319  11.9780  12.2298  12.4876  12.7512  13.0210  13.2971  13.5795  
10 12.8754  13.1808  13.4944  13.8164  14.1471  14.4866  14.8351  15.1929  15.5603  15.9374  
            
11 14.5835  14.9716  15.3716  15.7836  16.2081  16.6455  17.0961  17.5603  18.0385  18.5312  
12 16.3856  16.8699  17.3707  17.8885  18.4237  18.9771  19.5492  20.1407  20.7522  21.3843  
13 18.2868  18.8821  19.4998  20.1406  20.8055  21.4953  22.2109  22.9534  23.7236  24.5227  
14 20.2926  21.0151  21.7673  22.5505  23.3659  24.2149  25.0989  26.0192  26.9774  27.9750  
15 22.4087  23.2760  24.1822  25.1290  26.1184  27.1521  28.2323  29.3609  30.5402  31.7725  
            
16 24.6411  25.6725  26.7540  27.8881  29.0772  30.3243  31.6320  33.0034  34.4416  35.9497  
17 26.9964  28.2129  29.4930  30.8402  32.2580  33.7502  35.3207  36.9737  38.7135  40.5447  
18 29.4812  30.9057  32.4101  33.9990  35.6774  37.4502  39.3230  41.3013  43.3913  45.5992  
19 32.1027  33.7600  35.5167  37.3790  39.3532  41.4463  43.6654  46.0185  48.5135  51.1591  
20 34.8683  36.7856  38.8253  40.9955  43.3047  45.7620  48.3770  51.1601  54.1222  57.2750  
            
21 37.7861  39.9927  42.3490  44.8652  47.5525  50.4229  53.4891  56.7645  60.2638  64.0025  
22 40.8643  43.3923  46.


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22 40.8643  43.3923  46.1016  49.0057  52.1190  55.4568  59.0356  62.8733  66.9889  71.4027  
23 44.1118  46.9958  50.0982  53.4361  57.0279  60.8933  65.0537  69.5319  74.3529  79.5430  
24 47.5380  50.8156  54.3546  58.1767  62.3050  66.7648  71.5832  76.7898  82.4164  88.4973  
25 51.1526  54.8645  58.8877  63.2490  67.9779  73.1059  78.6678  84.7009  91.2459  98.3741  
            
26 54.9660  59.1564  63.7154  68.6765  74.0762  79.9544  86.3456  93.3240  100.914  109.182  
27 58.9891  63.7058  68.8569  74.4838  80.6319  87.3508  94.6947  102.723  111.501  121.100  
28 63.2335  68.5281  74.3326  80.6977  87.6793  95.3388  103.744  112.968  123.094  134.210  
29 67.7114  73.6398  80.1642  87.3465  95.2553  103.966  113.562  124.135  135.788  148.631  
30 72.4355  79.0582  86.3749  94.4608  103.399  113.283  124.215  136.308  149.688  164.494  
            
35 100.251  111.435  124.035  138.237  154.252  172.317  192.702  215.711  241.688  271.024  
40 136.606  154.762  175.632  199.635  227.257  259.057  295.683  337.882  386.520  442.593  
45 184.119  212.744  246.325  285.749  332.065  386.506  450.530  525.859  614.519  718.905  
50 246.217  290.336  343.180  406.529  482.530  573.770  683.368  815.084  973.445  1163.91  

                Tables   
Copyright reserved by the Singapore College of Insurance Limited  [Version 1.4] 359 Time Value Of Money Tables  
 
TABLE A 1 (CONTINUED)  
FUTURE VALUE OF ANNUITY FACTORS  
FVA Factor = [(1+i)n−1] / i where i = rate and n = periods  
i = 10.5%  11% 11.5%  12% 12.5%  13% 13.5%  14% 14.5%  15% 
n=1 1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  1.0000  
2 2.1050  2.1100  2.1150  2.1200  2.1250  2.1300  2.1350  2.1400  2.1450  2.1500  
3 3.3260  3.


