Do you really need the insurance?

A very wealthy person told me that all the members of her family has just bought a Shield plan. She was very glad that they are insured.

I told her that this is not really necessary. They are able to pay for the medical expenses out of pocket. They do not really need insurance.

She was surprised. She never thought about it in this perspective.

Here are my reasons.

The chance of incurring a very big hospital bill is quite small. Only a few people are likely to likely to be hit. Even if the bill is $100,000, it should not pose a big problem to a person who has several million dollars of assets.

There is a choice to go for treatment in the restructured hospitals in Singapore. The charges are modest, even in the class A wards.

Buying insurance requires a rational decision.

Do I need it?
What does it pay?
What is the chance of making a claim of this magnitured?
How much does it cost?
Can I afford to self-insure?