With about 250,000 foreign domestic workers (FDWs) working in Singapore, buying the right maid insurance policies is definitely one area of finance that Singapore employees should not be neglecting.
As discussed in a previous article, maid insurance is compulsory for all maids working in Singapore. This has to be bought for the maid by their employer for the duration of their employment contract, plus an additional two months.
Many employers simply get the maid insurance policies which is sold to them by the maid agencies which they have engaged with. However, it’s worth knowing that as employers of foreign domestic workers, we are entitled to choose which insurance policies we want to buy for our FDW, instead of just getting the default policy offered by maid agencies.
Mandatory Coverage Requirement
The first thing to note is that all maid insurance policies offered by insurer in Singapore would already meet the minimum requirements set by the Ministry of Manpower (MOM). These include a medical insurance coverage of at least $15,000 per year for inpatient care and day surgery, and a sum assured of at least $60,000 per year for personal accidents coverage.
Beyond this, maid insurance policies may also offer additional coverage and benefits for your FDW. Here are some additional benefits that you may want to consider when buying a maid insurance policy.
# 1 Waiver of indemnity
Most maid insurance policies in Singapore sold in Singapore will cover the security bond of $5,000 that is required by MOM prior to the commencement of their employment. However, while the insurer may cover this bond for the time being, the liability is yours to bear if your FDW violates any of the conditions of her work permit. In these situations, your security bond may be forfeited.
To cover yourself against the risk of having to pay the security bond in the event that MOM calls for it, you can purchase a waiver of indemnity through your maid insurance policy.
In the event of a claim by MOM, you will only need to pay a small fee (the excess) with the insurer paying for the rest of the security bond.
Opting for the waiver of indemnity will increase the cost of your premium. Based on the various maid insurance policies that we compare on Insurance Market, this would typically costs you about $53.50 more. However, it’s a small fee to be paying for the assurance that you will not be liable for the full $5,000 sum should your maid violate the conditions set in her work permit.
# 2 Third-Party Liability
Your FDW is technically under your charge (since you are the employer) and this means you may potentially be liable for any legal or third-party liability resulting from any accidental negligence on her part. Some maid insurance policies do cover this, up to a certain amount.
# 3 Replacement Benefit
Some maid agencies will charge you a fee if you need a replacement for your maid. This replacement could be due to poor health, which makes it impossible for a maid to continue working. In such events, your policy could pay you a replacement benefit to help cover the cost incurred to find a replacement maid.
# 4 Critical Illness
Some maid insurance policies also offer a small coverage amount in the unfortunate event that your FDW is diagnosed with a critical illness. This can be used to offset the cost of seeking the treatments as certified necessary by a registered medical practitioner.
Do note that unlike the critical illness plans that most of us are more familiar with, where coverage starts from at least $50,000, most critical illness coverage offered through maid insurance policies tend to be much lower. You should definitely not expect the same kind of coverage level that you are getting from your own standalone critical illness plans.
# 5 Refund for early termination
Maid insurance policies is typically either for 14 months or 26 months long. This is to cover your maid for the duration of their employment contract, which is either 12-month or 24-month, plus an extra two months.
However, it’s common for employment contracts to be terminated earlier, as a result of misaligned expectations. When this occurs, you may or may not receive a refund for the unused duration of your maid insurance policy.
Check your policy to see if you will get a refund for early termination of your FDW.
Filter, compare and buy maid insurance policies through Insurance Market
If you think there are too many areas of maid insurance policies that you need to consider thus making it difficult for you to compare the various policies, Insurance Market is here to help. Over at Insurance Market, we help you compare 13 maid insurance policies offered by 6 different insurers.
Besides comparing the premiums that you have to pay, we also help you filter the right insurance policies to consider based on the specific requirements that you may have. Simply tell us what some of the must-have that you are looking for in your policy and we will show you the policies that you should consider.
We can also help you compare policies based on the overall coverage that you are getting, and whether you are getting the best value-for-money buy based on the premiums that you are paying.