Obtaining a critical illness insurance policy in Singapore is a significant step in filling in any gaps in your current insurance coverage.
The Life Insurance Association of Singapore (LIA) reports an 80% critical illness protection gap and a 23% mortality protection gap among economically active Singaporeans and Permanent Residents (PRs).
This suggests that many people in Singapore may be unprotected against the financial consequences of a serious illness. Even though critical illness plans have been around for a while, there could be a number of reasons why they are not as popular as life insurance.
Here are 5 things to consider before purchasing critical illness insurance:
1. In the event of a severe illness, what does your policy cover?
Coverage for critical illnesses can be more complicated than life insurance. If you die or become totally and permanently disabled (TPD), your life insurance policy will pay out to the people you’ve designated as beneficiaries.
Depending on the insurer, critical illness coverage may vary in terms of the number of covered critical diseases, the categories of critical illnesses covered, and/or the phases of critical illness covered (e.g., early, intermediate, or a major stage). The medical language typically used to define coverage levels is another deterrent to people learning more about critical illness insurance.
If you’re interested in finding the best critical illness plan for your needs, you shouldn’t try to avoid learning as much as possible about the subject.
The LIA has a critical illness framework that includes a standard list of 37 major stage critical illnesses and their definitions; using this list, you may see if your critical illness insurance plan covers everything you need it to. Statistics on the leading causes of death in Singapore are accessible from the Ministry of Health (MOH).
2. How long does your critical illness insurance cover you for?
Everyone has different priorities when it comes to critical illness coverage. There are critical illness insurance policies that protect us until we’re 100 years old, and there are others that don’t.
As the retirement age and consequently the economic activity and life expectancy of Singaporeans rise, the value of long-term critical illness coverage rises as well. You may still require a critical illness payment after retirement or if you no longer have any dependents if you want to maintain your present standard of living or pay for assistance in caring for yourself. As people live longer, you may find yourself responsible for the care of elderly relatives long after you’ve left the workforce.
3. How much critical illness insurance coverage do you require?
The LIA’s standard 5-year recovery period for critical illnesses can be used as a guide for calculating the amount of coverage you’ll need.
When you’re trying to get better from a serious illness, the last thing you want to worry about is how you’re going to pay for the life you’re used to leading. However, living expenses such as mortgages, utilities, transportation, child support, etc. must be maintained.
To cover these costs, you could use money from your savings, but doing so could put your family’s financial security at danger, especially if you don’t get better.
A critical illness insurance payout would be helpful now. This money can be used for medical care in addition to relieving the financial burden of day-to-day living.
If you want to be on the safe side when estimating how much insurance you’ll need, you should aim for a figure that’s higher than five times your annual spending. This is because you may have to spend more money in the future to acquire the therapies you desire and because you may need to pay for assistance at home or in a care facility.
4. How much does critical illness coverage typically cost?
A critical illness plan’s benefits may not be worth the expense. We need to think about how feasible the plan is in light of our other, equally weighted financial commitments, such as meeting our basic needs, saving for retirement, and funding our children’s college educations.
If you can’t afford insurance that covers you for the whole five years of the necessary recovery period, try buying some coverage at a lower level.
There are certain plans that can cover for 150 different types of critical illness throughout multiple stages. This may include critical illnesses such as thyroid disorders, sleep apnea, Benign Prostatic Hyperplasia (requiring surgery), and glaucoma (requiring surgery).
5. What additional benefits does your critical illness insurance provide?
Some health insurance companies offer extra wellness programs to its policyholders.
For instance, some companies offer some health benefits where you’ll have access to a certain health and wellness program that incentivizes and rewards you for leading a healthy lifestyle. There can be additional benefits offered such as coverage for hospitalization expenses, and access to specialized care and treatments.
If you can’t afford insurance that covers you for the whole five years of the necessary recovery period, try buying some coverage at a lower level.
There are certain plans that can cover for 150 different types of critical illness throughout multiple stages. This may include critical illnesses such as thyroid disorders, sleep apnea, Benign Prostatic Hyperplasia (requiring surgery), and glaucoma (requiring surgery).
Conclusion
Before you make the important decision to purchase critical illness insurance, it is important to take the time to consider all of your options. Researching the different coverage plans and understanding what works best for your individual needs is key to finding the right policy for you. Don’t forget to also think about the long-term impact of any policy you choose and how it could affect your future financial security. Taking the time to make an informed decision now can help ensure that you have the protection you need to face any unexpected medical expenses.