Maid Insurance 2020: What to look out for and how to find the best plan
In Singapore, it’s mandatory for employers of foreign domestic helpers to buy maid insurance, which is an insurance policy which covers any work-related accidents and medical care charges sustained by the helper.
The Ministry of Manpower makes compulsory that each foreign domestic helper must have:
- S$60,000 per year in personal accident insurance coverage
- Hospitalisation coverage of at least S$15,000 per year (covers inpatient care and day surgery expenses)
- A security bond of S$5,000 for your foreign domestic helper
The insurance is meant to protect the helper and her family, with a lump sum compensation should she suffer from permanent disability or death due to an accident. This lump sum must be made payable to your helper or her beneficiaries.
General policy structure of maid insurance
In general, most insurance companies offer either a 14- or 26-month plan with options to purchase various add-ons or different tiers with varying price structures to choose from.
Why 14 and 26 months instead of 12 and 24 months? The extra two months of coverage (non-chargeable), as required by the MOM, is to insure your helper for an additional two months after the expiry of her work permit, in case her repatriation is not immediate.
Most plans will usually also offer a letter of guarantee for the mandatory S$5,000 security bond, as required by the MOM.
Is the compulsory coverage enough?
As it is compulsory to fulfil the basic requirements as mandated by the MOM, most employers assume this coverage is sufficient. However, this may not always be the case.
If you consider the following add-ons, which do not cost significantly more, you can save more of your own money, in the long run, should an accident befall your domestic helper.
On top of the pre-requisite requirements, most of the coverage offered by insurance companies usually include these seven key benefits.
Benefit 1: Domestic helper’s personal belonging
Theft or damages to your domestic helper’s personal belongings such as laptops, smartphones, jewellery will usually be covered.
Benefit 2: Replacement Maid Expenses
Covers the agency fees for a replacement should your domestic helper’s services be terminated due to death or permanent disability.
Benefit 3: Repatriation Expenses
If your domestic helper is permanently disabled or if she dies, she or her family will be provided with a repatriation payout which covers the trip back to her home country. The process can be rather costly, if uninsured.
Benefit 4: Wage Compensation
Covers your helper’s wages should she be hospitalised and is unable to work. It is paid daily for a certain amount of time, capped at a certain limit, depending on the policy.
Benefit 5: Outpatient Expenses
Outpatient expenses are not included in the basic policy as required by the MOM, so it is important to know how much is covered in the event that outpatient treatment is needed
Benefit 6: Third-Party Liability
This provides indemnity against any expenses incurred as a result of accidental bodily injury to any third parties as well as accidental damage to any third parties’ properties, as committed by your domestic helper.
Benefit 7: Theft
This protects your personal and family’s properties from theft perpetrated by your domestic helper.
Like all insurance plans, there are certain elements which most insurers will not cover. In general, your domestic helper will not be covered for any psychiatric, venereal diseases, pregnancy or suicide-related expenses.
Moreover, the coverage for permanent disability is also tied to a scale. The reimbursement depends on the severity of the disability, which can range from the loss of a hand to total body paralysis.
With most maid insurance policies priced reasonably, it’s worth getting one which you feel best meets your needs. If you buy the insurance with certain credit cards, you may also get to enjoy special rates.
What is a required security bond for foreign domestic helpers?
Unless your domestic helper is a Malaysian, an employer is required to get a bond for every foreign helper hired. This security bond is a binding pledge to pay the government a stipulated sum should the law or the conditions governing the employment of a helper is breached.
For instance, every employer is responsible for the repatriation of the domestic helper to her home country once her contract ends. A security deposit (bond) of $5,000 is to be paid to the Work Permit Department of the Ministry of Manpower (MOM) before she arrives in Singapore.
Suppose the domestic helper is not repatriated after her contract has expired, the employer will forfeit the $5,000 bond deposit. This puts the onus on the employer to ensure their helper gets back to their home country after their work stint is over and work permit cancelled.
If you’re hiring a Filipino domestic helper, you need to pay either a $2,000 or $7,000 bond deposit to the Embassy of The Philippines. If you hire a helper through an accredited agency, you pay $2,000. However, if you hire a helper yourself directly, you will have to pay $7,000.
In the process of hiring a foreign domestic helper, usually, the maid agency would have included the MOM’s security bond and maid insurance as a package which saves the employer the hassle of buying them separately.
When should you buy the bond?
The timing of getting this security bond is important if an employer wants to get the maid insurance without the agency’s help. The security bond is usually covered by the insurer in this case, which replaces the S$5,000 you are required to deposit with the Ministry of Manpower. The employer must ensure the insurance company sends the security bond details to the MOM before the foreign domestic helper arrives (processing takes up to 3 working days).
The bond takes effect on the exact date of her arrival, otherwise her entry into Singapore will be refused and the employer would have to pay to send her home.
When and how do you get your bond deposit back?
Upon completion of her services and cancellation of the work permit, provided that none of the conditions of the bond has been broken, you get your deposit back once your domestic helper has returned home successfully (or if your insurer covered this through their security bond, then you have nothing to worry about). The employer must also explain the work permit conditions clearly to the foreign domestic helper (preferably in the presence of an eye-witness such as the maid’s agent).
In the case of the helper’s failure to show up for work or if she gets pregnant, the employer has to prove the helper was aware of her obligations. The employers will also have to report such incidents when they first discover it. Only then will they be able to recover the $5,000 bond deposit.
If all the stipulated conditions are met, the bond deposit will usually be discharged 7 days after the foreign domestic helper has left Singapore.
Under what circumstances will the bond deposit be forfeited?
The bond deposit may be forfeited if:
- The foreign domestic helper’s salary is not paid on time
- Failure to provide medical coverage for the helper
- Failure to repatriate the helper back to her home country once her work permit has been cancelled, revoked or expired
- If the helper goes missing, you only get back half of the bond deposit ($2,500) provided a police report has been filed and reasonable effort has been made to locate her
- If any other conditions of the work permit have been broken by the employer or helper
How can employers protect their bond deposit?
Consider taking up the “Waiver of Counter Indemnity”, which can be priced as low as $53.50 This option will greatly limit your liability on the $5,000 bond deposit to just $250 instead, on condition that the breach on the deposit is not due to the negligence or fault of the employer.
This simply means the employer will forfeit $250 as the remaining $4,750 will be paid by the insurer. It does not seem like such a huge price to pay, considering that losing $5,000 will burn a much bigger hole in your wallet.
In case the employer or the foreign domestic helper breaches MOM’s rules, the MOM will first claim the bond from the insurer who will then recover the $5,000 from the employer.
How do you find the best Maid Insurance policy?
For any employer hiring a foreign domestic helper for the first time, buying maid insurance through a maid agency is the easiest solution. However, the insurance scheme recommended by the agency may not always be the best one for you.
Going online to search and compare the best maid insurance policies – and eventually applying – can you save a lot of time and money, since getting maid insurance often requires you to make a trip to the agency to sign some papers and you are also paying for middlemen fees and commissions.
Getting the best maid insurance can be confusing, especially for first-timers. Not only are you dealing with a total stranger living in your home at first, the stakes are higher if young children or elderly parents are left in her care while you’re at work or overseas. On top of that, the wide range of maid insurance plans makes picking the right one a headache.
There are basically 2 durations for maid insurance schemes in the market – 14 and 26 months. If you’re not sure what is best for you and your foreign domestic helper, opt to buy a 14-month insurance plan first. That said, buying a 26-month plan may be cheaper and you can even get further discounts.
If cost is a major factor for you, here are some guidelines which you can follow. Most maid insurance plans are classified into 3 tiers (basic, mid and top tiers), based on price and coverage level. In general, the higher the tier, the more coverage it provides.
Basic Tier: Recommended if you are budget-conscious and are willing to forego the extra coverage provided by more expensive insurance plans. Most basic plans cost around $260 for a 26-month policy, which works out to be about $10/month.
Mid-Tier: Mid-tier plans often offer the best value for money because they offer wider coverage at an affordable rate. Average premiums for a mid-tier plan cost around $320 for a 26-month policy, which works out to be around $12.30/month. If the foreign domestic helper falls sick, ends up in a hospital and is not able to work, you’ll be covered for up to $30/day in wage compensation. On top of that, her medical bills will also be taken care of by the insurance.
Top-Tier: Top-tier maid insurance policies generally have the widest coverage and higher payouts. Most top-tier plans are priced around $360 for a 26-month policy, which works out to be about $14.40/month. If coverage for theft is also a prime concern, look for a top-tier insurance policy with a generous payout.
One way to help you decide which plan offers the best value is to do some simple math:
|Plan A||Plan B|
|Insurance payout for outpatient expenses||S$1,500||S$2,000|
|1-4 month premium||S$180||S$220|
|Sum insured per premium dollar||S$8.33 insured per premium dollar||S$9.09 insured per premium dollar|
Based on the table above, Plan B is the policy with a higher payout vs premium paid, even though the premium is $40 more expensive. It will naturally be the better choice provided that all the other conditions of the insurance plan meet your needs.
Should you find a policy which you like but does not cover all your needs, you can opt for an add-on. Some insurance companies allow flexibility in customising your insurance plan.
When should you start buying a maid insurance policy?
The start date of the policy is 5 days from the date of purchase and within 14 days from the date of application. Start dates are sorted into three categories:
- New maids: policy start date is the date when your maid arrives in Singapore
- Renewal maids: policy start date is one day after your maid’s current work permit expires.
- Transferred maids: policy start date is on or before the date you apply for a transfer with MOM.
Final tips before buying a maid insurance policy
Tip 1: Does your helper have any pre-existing conditions? Knowing whether the plan covers your helper’s pre-existing conditions would be crucial as you would be more aware of what’s not covered by the policy.
Tip 2: Check if the policy you are getting specifically covers dengue fever and malaria as some insurers actually do not cover these conditions.
Tip 3: Pay special attention to the outpatient benefit of a maid insurance policy. This covers the cost of medical treatment for your domestic helper due to accidents (such as cuts, bruises, and falls), which is a likely scenario during the course of her employment. Therefore, it would benefit you to consider a plan with higher outpatient coverage.
Tip 4: Consider the optional waiver of counter indemnity as it limits your liability on the $5,000 security bond to $250.
A version of this article first appeared on SingSaver.
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