Rethink 'two premiums for one risk' practice

In its reply to concerns raised since the release of the Health Insurance Task Force's report, the Life Insurance Association, Singapore asserted that "policyholders can make only a single claim under one plan" ("Managing claims costs can keep health insurance sustainable"; yesterday).

However, this does not address the issue of "two premiums for one risk" - a concern raised by Mr Patrick Tan Siong Kuan ("Deal with inefficiency in health insurance industry"; last Wednesday).

Insurers have long benefited from their practice of collecting "two premiums for one risk" - a situation where a company pays for healthcare insurance for an employee under a group plan, and the employee purchases his own healthcare plan, for uninterrupted protection in the event of a change of employment.

Is it fair trading practice for insurers to collect two premiums for the same risk?

With the impending insurance premium hike, such a practice should be reviewed for the sake of ensuring fair practices.

Given that two parties (the company and the employee) pay premiums for the same risk, yet only one claim is allowed, perhaps a discount on the two parties' premiums should be given.

Alternatively, companies can, as part of their staff benefits programme, reimburse employees who have bought their own healthcare insurance plan which is similar to the one the company has on offer. This latter initiative means only one premium for the same risk is paid.

Fong Hang Yin (Ms)

A version of this article appeared in the print edition of The Straits Times on October 26, 2016, with the headline 'Rethink 'two premiums for one risk' practice'. Print Edition | Subscribe