Is Critical Illness Coverage Necessary?

The thought of critical illnesses is probably not something that crosses your mind frequently – and that’s a good thing. If you’re relatively young and healthy, there’s really not much reason for you to be thinking about it, apart from when your insurance agent is explaining policy coverage to you.
However, with critical illness definitions changing with effect from August 2020, you might want to think about reviewing your insurance portfolio or apply for critical illness coverage if you haven’t already.

What a critical illness coverage does for you

Let’s first look at why it is important to have critical illness coverage. While most of us have a standard health insurance plan, this might not be enough to help you defray the costs that come with a critical illness. Yes, you do have MediShield and MediSave that you can tap into, but treatments for critical illnesses are often long-drawn and costly which means that you probably would still need to fork out a good amount from your pocket to pay for treatment. Furthermore, not all medical expenses are covered by MediShield or MediSave. For example, any hospital stay in wards above class B2 will barely be covered.
Most critical illnesses plans in Singapore cover you for 37 critical illnesses. If you have dependents such as children or elderly parents, not having coverage when an unprecedented illness strikes could spell financial trouble for you.
A critical illness plan comes into play when you are diagnosed with a critical illness such as cancer or a heart attack where you are usually given a lump sum to use however you wish. This sum will be especially useful should you lose your ability to work – you could use to sum to help with bills and childcare services.
Although you might feel fit as a fiddle now, it’s good to consider getting critical illness coverage while you are healthy, as the premiums are generally more affordable. Also, while Singaporeans tops the world in life expectancy at 84.8 years, there have been an increasing number of years spent in ill health. This means that our quality of life deteriorates significantly in our later years. Statistics from the National Registry of Diseases also show that 1 in every 4-5 Singaporeans are at risk of developing cancer. In addition, the Life Insurance Association reported in 2018 that economically active Singaporeans and permanent residents are only covered for a year of their expenses – or 20 per cent of what is needed should they be out of the workforce for five years. This means a good percentage fo the population are leaving their future up to chance. These grim figures are not to scare you, but it’s best to face reality head-on.

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How the new critical illness definitions might affect you

Now back to the changing definitions of critical illness. The Life Insurance Association has said that all critical illness products based on definitions used from 2014 may no longer be sold in Singapore from August 26 2020. However, this will not affect those who have applied for critical illness coverage before then. To help you make a more informed choice on whether you should apply for coverage before August, here are some of the changes: Deafness (Loss of Hearing)” has been amended to “Deafness (Irreversible Loss of Hearing)”, with the term “irreversible” defined to recognise the possibility of future medical treatments that can restore hearing to some level as medical advances are made. There are also stricter, more exclusions for Benign Brain Tumor, Coma, Stroke, Aplastic Anaemia, Heart Attack. More requirements will be set up for claims to be made. This means that it would be harder to claim as you would have to prove your illness is both chronic and irreversible. Click to find the full list of changes .
It’s worth to take a look to decide which set of critical illness coverage would be best for you and your loved ones. It is particularly important to have critical illness protection as the payout can be used to support your dependents. There’s a Chinese saying that says one should leave behind love, not debt – this sums up perfectly why critical illness coverage is so necessary.
It’s a lot to take in, but if you need any form of guidance in choosing critical illness plans, leave your contact below and our preferred advisors will contact you shortly!

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