Better insurance cover for the low-income

NTUC Income chief executive Ken Ng said the new payout structure also aims to highlight the importance of savings.
NTUC Income chief executive Ken Ng said the new payout structure also aims to highlight the importance of savings.

To provide a fillip to underprivileged families, insurance cooperative NTUC Income has rolled out a programme that combines a free insurance cash payout and a matched savings incentive for the needy.

Income Family Micro-Insurance and Savings Scheme (Ifmiss)

Launched on Jan 1 this year, Ifmiss is part of Income's continual efforts to support the lower-income community here.

It replaced the previous Income Family Micro-Insurance Scheme (Ifmis), which was rolled out in April 2010. The latter offered a payout of $5,000 in the event that the insured died or suffered total and permanent disability (TPD).

Besides providing the same payout, the new Ifmiss offers a dollar-for-dollar payout that matches the collective bank balances of the insured's family unit, capped at $5,000. The family unit may comprise the insured's surviving spouse, parents, siblings, children or ward.

The additional benefit is payable only if the claim for death or TPD is approved. This means that the maximum benefit payout under the new scheme is $10,000.

As of April, both Ifmis and Ifmiss have disbursed close to $800,000 in claims to 152 families.

One of the scheme's beneficiaries is Madam Siti Zubaydah Mohd Hamzah, 33, whose husband died of pancreatic cancer in 2015. She recalled that the $5,000 payout from Ifmis helped with an urgent housing situation she faced after her husband died.

"My husband was the sole breadwinner and, with four young children to raise, the payout helped to cover our immediate basic expenses during a difficult time. We are thankful to Income for being prompt in extending help to us," she said.

She has started to look for a job as she wants to be financially independent and be able to support her family on her own.

"With this new savings enhancement in Ifmiss, I will definitely start putting money aside so I know that I am able to give my family the best protection should something happen to me," said Madam Zubaydah.

Objectives of the scheme: The scheme dovetails with the insurer's mandate to make insurance accessible to all in Singapore, including the unserved and underserved.

Mr Ken Ng, chief executive of Income, said that it serves to help the most vulnerable (lower-income households) at their most dire time of need - in the event of death or a parent/guardian suffering TPD.

"When death or disability occurs to a parent or guardian of young children, especially to those who are sole breadwinners of their families, those from disadvantaged backgrounds are often the hardest hit. We know that low-income families face real challenges in setting aside savings and, in a family crisis, every dollar counts," he said.

Another objective is to highlight the importance of savings and financial planning. Mr Ng noted that schools are teaching children about saving for a rainy day.

Income aims to highlight the importance of savings and hopes that the additional dollar-for-dollar benefit will encourage low-income families to try to save, and be more "future ready".

Mr Ng said: "Our intention to offer the micro-insurance scheme is to help pre-school and primary school children from low-income families cope financially in times of need. We believe that families in vulnerable circumstances learn quickly that self-reliance is important in the face of difficulty, and Ifmiss is our way of extending more tangible support to them."

How the scheme works: Ifmiss automatically covers, free of charge, qualified individuals,who are parents and guardians of a child or ward studying in a local primary school and are recipients of the Ministry of Education's Financial Assistance Scheme.

Also covered are those enrolled in NTUC's My First Skool and have a gross household income that does not exceed $3,500 a month, or per capita income that does not exceed $875 a month. The insured must be aged between 16 and 65.

The scheme does not require underwriting and has no exclusion of pre-existing illnesses. When an unfortunate event happens (a parent or guardian dies or has TPD), the school administrators are notified by the family and will activate the claim process. Each family is allowed to submit one claim per calendar year.

Other Income programmes that help low-income families

Besides Ifmiss, which supports lower-income households with young children during times of crisis, other initiatives such as the OrangeAid MediCard are on offer.

This is a fixed-value co-pay card and, according to Income, is the first by an insurer here.

It aims to further reduce the treatment cost at general practitioner clinics for low-income families.

OrangeAid's new Future Development Programme is another scheme that supports tertiary students from the lowest-income households.

Income said: "By investing in these youth, we aim to enable them to be in the position to help their family get out of the poverty cycle. Beyond bursary support, we equip them with financial literacy skills, personalised career guidance and internship opportunities."

To ensure that insurance is accessible to all, including the unserved and underserved, Income says that its financial planners are professionally trained to tailor financial plans for individuals with a smaller budget, such as those earning $1,200 a month.

Income said: "For someone earning $1,200 a month who does not have any insurance plans, his top insurance priority should be health insurance. Life insurance is another key priority, followed by the building of assets through a savings plan."

The insurer added that the key to financial planning, whether you have $1,000 or $1 million, involves five main things: cash flow, protection/risk management, debt management, long-term/retirement planning and estate planning.

A version of this article appeared in the print edition of The Sunday Times on June 04, 2017, with the headline 'Better insurance cover for the low-income'. Print Edition | Subscribe