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MEDICAL INSURANCE

The Israeli Medical Fund system is really good when compared with other countries. However, I am sure many readers reacted in various ways when it became apparent that there was a large loophole in our medical fund cover. Many of us thought that we were basically covered for all medication, but were caught by surprise with the new expensive cancer medications that were not covered by the basket. There was a lot of publicity at the time and of course the private insurance companies climbed in during this panic period offering to cover all medication, transplants, overseas treatment, etc. Many people took the policies as they were not prepared to be at risk for sums that could cripple a family financially. Recently, Maccabi, and I believe other medical funds, have included a substantial additional amount for medication cover, obviously at an additional monthly cost to the members. They do not cover all the risks that the private policy covers but certainly the possible liability of the private insurers for medication has reduced considerably. We all know that even though we are paying two premiums we are unable to claim from both insurers unless, of course, we exceed the limit. I assume in the case of a claim, the private insurance company will insist that the first claim be with the medical funds (as that cover is required by law) and then only after we have exhausted the maximum limit will they come to the party. My point is, why do we all have to just accept the situation of allowing the private insurance companies having their total possible liability reduced while still claiming the same premium that they originally set? I accept that we are free to cancel the policy but nobody seems sure if the other risks are fully covered by the medical funds. So I say let’s get our insurance companies, through our agents, to explain it all: might be good for insurance company business but I believe we are being unreasonably taxed.

DIRECTOR’S INSURANCE

If you are fortunate enough to have a Director’s insurance policy through your employer and if you are concerned about knowing what will be available to your family on your death, I suggest you discuss this with your agent and ensure that he checks it out properly before giving his opinion. You do not want his off the cuff opinion; you want the actual facts that he will need to establish, or better still confirm in writing. For those who are unaware of this type of policy (it might vary but it usually includes life cover) your severance pay benefit and other forms of savings could be lump sum or monthly pension. At the end of each calendar year the insurance companies post out a summary of each policy holder’s position at the year end (it usually arrives four to five months thereafter). The summary has only recently become a standard printed form with the sums inserted for each policy holder. It is not easy to understand, particularly for immigrants with limited Hebrew but one can make out certain salient points like this example:

Death Cover Basic NIS 200,000.00

Death in Accident NIS 200,000.00

Disabled in Accident NIS 200,000.00

Severance Fund employment NIS 50,000.00 (accumulated and based on one month’s salary for each year of employment)

Savings (lump sum or pension) NIS 50,000.00

This is a simplified example because generally the figures reflected appear on the assumption that you work and continue to contribute until age 65 or longer and it all becomes very complicated. Now I and many others have always assumed the following:

1) If you live to policy retirement date you live to policy retirement date

The Life Cover is probably Term Insurance so once you

reach retirement age as per the policy, say 65 or 70, that falls away and there is no payout on eventual death thereafter.

You will be entitled to the value of your severance pay and the “Savings” at policy retirement date.

2) If you die before policy retirement date

Natural Death NIS 200,000.00

Death in Accident NIS 400,000.00

Plus the value of your Severance and Savings at date of

death.

Point for you to clarify: I have been told 2 above would  not apply with “old” policies and could vary according to what was recorded or marked in the small print of a recent  policy application form.   You need to establish what your actual policy covers and not just rely on the summary.   On death before Policy Retirement date with the “old’   policies and recent policies if so recorded, your estate would   only receive the Death Cover of NIS 200,000 and nothing   else or your estate might receive the NIS 200,000 Death Cover plus the other benetits (with recent policy if form was marked Death Cover PLUS Severance and Savings).   It appears, from what agents have told me, that on the   annual summary one cannot see any indication of policy  holders actual position because with both scenarios the figures are recorded identically as set out at the beginning of this section of the article - there is a massive difference and in my opinion it should be very clearly shown in the summary.   This is very strange and misleading and many professional employees that I have spoken to are completely unaware   of this situation and cannot accept that “your stated benefits  " - for Severance and Lump Sum Savings/Pension - suddenly   become part of what is stated separately as Life Cover.   Possibly, and I repeat possibly, if it is stated in the small print,  one could accept that the Savings/Pension portion could   be forfeited on death. The Severance however is due to the employee by Law so that, in my opinion, must be paid out separately and cannot be classified as part of the Death Cover payout.   Could be worthwhile following up because it’s rather important to clarify in writing before planning for the needs of your dependants and what will be available to them.