Paying ahead for insurance premiums is a more inclusive and collective approach to boost the support for each generation’s future old-age premiums. Under this approach, everyone pools some monies during working ages which are set aside to help support the old-age premiums of those of the same generation. Doing so gives policyholders a pool of pre-paid premiums to tap on in future, to cushion the impact of future increases during the retirement years.

In contrast, while MediSave is useful to help with healthcare costs, including insurance premiums, there are also many competing demands for it such as hospitalisation bills and outpatient treatment for chronic diseases, which all add to pressure on MediSave balances.