Lim Kopi Fridays Videos

00:00 :

I’m sure you have heard of financial independence, which refers to a state where an individual has achieved substantial accumulated savings or investments to fund for their living expenses. Now, have you heard of medical independence? Let’s dive right in.

00:22 :

Hello everybody, my name is Adrian and welcome to another episode of Lim Kopi Fridays with Adrian. In this episode we are going to dive deeper into medical independence, which is a term that I first heard from one of my clients over a decade ago. He was a fund manager back then, and he understood that in order for him to continue to invest, he needs to remove certain uncertainties in his life, which is the inability to work. Because for everyone of us, our ability to work is what bring us the capital for us to invest. So he wanted to reduce the possibility of him not having to work or if there’s an event that he has been exposed to where he’s unable to work, there is an income replacement kind of mechanism that kicks in, that allows him to invest or that allows him to continue to build his capital along the way.

01:18 :

So as I dive deeper into this medical independence, I realised that it is very much like financial independence. A lot of people, they have a misconception of financial independence where they feel that once I reach financial independence, I don’t have to work anymore. I can just throw my resignation letter, I can just do whatever I want. But in reality, for most people that have achieved financial independence, it’s about them having the option and the freedom to choose whether they want to work or not, so their living expenses is not tied to their employment. Similarly, by achieving medical independence, you are having the option and the freedom to choose whether you want to continue to work or not in a state where you are undergoing intensive treatment that have certain side effects in your life.

02:07 :

Because at that stage you wouldn’t want to diverge your attention to every other things. Because if you do not concentrate on your treatments, you do not concentrate on your recovery, and all you can think of is to juggle between work, family, life, treatment, then the recovery process may not be as smooth as how you want it to be. So medical independence allows you to have the freedom to choose whether or not you want to continue to work or if you can still continue to work,

02:41 :

you can be in a reduced capacity and not in the same capacity as before because a lot of times when we are in a situation where we are undergoing treatment intensive treatment, we may not have the time and energy to diverge our attention to different places and that could sometimes result in employer not renewing our contract. Or, they may ask us to go on no pay leave. And these are some of the common scenarios that have happened to people that I have known. So in order for us to plan for this, there are a few steps that you can consider in order to really plan for medical independence now.

03:25 :

Firstly is to have a very comprehensive hospitalisation plan because having a comprehensive coverage in for hospitalisation allows you to reduce the possibility of you having to fork out your own cash to pay for the medical bills. Now I know that for some of us who may have pre-existing medical conditions, that is impossible to achieve. So there are two ways that we can fall back on if you are under this situation. And the first one it would be to fall back on MediShield Life. Of course, the caveat is that for MediShield Life, it covers most of the bills for those that are under the subsidised route.

04:05 :

So in this case, you might have to go for the subsidised route in order for your bills to be covered or for most of the bills to be covered. And secondly, if you have more resources, you may want to consider options where that do what we call a moratorium underwriting where you can cover our pre-existing medical conditions provided that you know you have not been visiting or you have not had a follow up from the console or consultation with the doctor within the past two years and it doesn’t fall under one of the critical illnesses.

04:41 :

So these are some of the additional options that you might want to consider in order for you to achieve to have the more comprehensive medical insurance.

04:53 :

After having a comprehensive medical insurance, the next thing that you have to probably consider would be to look out for income replacement. So income replacement it is not a plan by itself, it is a portfolio of plans of insurance policies that you can configure that allows you to achieve medical independence. So what I mean by this now there are certain plans that covers for disability. There are certain plans that cover for critical illnesses. There are plans that provides you with your lump sum if you are detected with a form of critical illness. And there are plans that pays you on a monthly basis.

05:34 :

So it might be better for us to craft out a comprehensive plan itself. And sometimes comprehensive plan doesn’t mean you have to commit a lot of resources. There are options for us to really bring down the cost of these plans and to come up with something that is compatible with us, that suit us, and also to suit the nature of our job. Because some of us who are self-employed may want to consider different options as compared to someone who has a stable job because the commitment level is different and the stability of the income is different as well. So yeah, some of the things that I will discuss with my clients when we are talking about this, I would urge you to really have this kind of discussion to really look into what’s best for you.

06:20 :

Because at the end of the day what you want, the outcome that you really want is that when you are down with certain critical illnesses, then you might want to have a additional backup fund that comes in to help you tide the situation over. Sometimes this can be for a shorter term, it can be for a longer term, and in some instances it can even be permanent. So we may have to balance out what we really want in order to get this in place. And last but not the least is to apportion a part of our investments or our savings for situations that don’t fall within the first two umbrellas.

07:03 :

Because the human body is so complex and we are exposed to so many different kinds of threats every day. So it is unlikely that we might be able to cater for every single scenario in the world. So if we are not doing that then we might want to look at how we can minimise that and we are able to utilise the part of our savings or investments to really cater for this unforeseen circumstance where none of our plans actually react to it and we have the sufficient investments or savings to cater for that.

07:42 :

So to summarise, in your pursuit to financial independence, you might want to consider going for medical independence first. Where it helps to deal with your medical bills, it helps to deal with your living expenses, it helps you deal with situations where you are unable to work, and it helps you to cater for situations where none of the plans respond and you have substantial savings or investments to cater for that. I hope this helps us see you in the next episode.