Breaking down the age-old dilemma: Do I need Critical Illness coverage?

In the event that you are diagnosed with a disease, hefty expenses are definitely unavoidable. To give some insights, it cost an average of S$12,500/month for cancer treatment and another S$2,150/month for additional expenses to cater for your condition which does not include cost of living. Here’s a breakdown of how you can ensure sufficient financial protection through the course of your treatment and recovery.

As a Singaporean or Permanent Resident (PR), you are automatically and mandatorily subscribed to MediShield Life – a basic health insurance plan, administered by the Central Provident Fund (CPF) Board. It provides coverage for hospitalization bills (B2/C ward) and helps defray the cost of selected outpatient treatments. You can choose to purchase Integrated Shield Plans, which has the MediShield Life component and additional benefits offered by private insurers. This upgrades you for additional benefits such as receiving treatments in private hospitals or A/B1-type wards.

But why do I still need Critical Illness Coverage?

While MediShield Life and its counterparts may help cover your hospitalisation bills, it lacks the component that provides significant amounts of cash payouts to tide you through the recovery period. With an individual usually taking a minimum of 60 months to recover, one is likely to face a significant loss of income due to the inability to work.

Your Critical Illness payout will go to covering costs such as bills, domestic help, supporting your dependants, and additional home amenities to aid your day to day life. This is especially important for self-employed personnel, breadwinners of the family, and people who are single as a loss of income due to critical illness would have a deeper impact on them.

What should I look out for when buying a Critical Illness Plan?

While it is easy to simply choose the cheapest Critical Illness plan, it is important to understand that not all of the plans are structured the same way. It is important to examine the features of the different policies and find one that is best suited for you. 

Here are some factors you can consider

1. How much coverage do you need?

The coverage amount should be based on your individual’s financial situation. As a general rule of thumb, the amount should be 5 times your annual expenses to ensure you are well covered during the 60 months recovery period.

2. What is covered?

While the LIA provides a standardised list of 37 critical illnesses and its definitions, different insurers also have their own list when it comes to the number, type, and even stage (early, intermediate or late) of critical illness.

3. How long are you covered? 

The coverage tenure can also differ across different Critical Illness Insurance Plans. While some plans provide coverage till the age of 100, others have shorter coverage tenure. It is important to choose one that provides the best fit for both your needs and financial ability. 

4. Family History

Before buying a Critical Illness Plans, it is important to consider your family’s medical history. If your family has a history of a certain critical illness, ensure that it is covered by the policy. For diseases with a high incidence of recurrence such as cancer, it might be good to consider multi-pay plans.

Below are some Critical Illness Plans you can consider

From 26th Aug 2020, the changes in definitions of Critical Illnesses by the Life Insurance Association (LIA) Singapore will take effect. Learn more about how it will affect the Critical Illnesses of your concern. Schedule an appointment with us below.

Submit your interest now!

From now till 31 August 2020, stand a chance to Scratch & Win up to $550 credits when you submit your interest for any life insurance.

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