As you can see, cancer is the top cause of death in Singapore, accounting for 28.4% of all deaths. In addition to other health issues, they make up for the majority of cases.
According to research, 1 in four people may develop cancer in their lifetime, and aside from the excruciating pain you’ll experience, comes along with the devastating cost of hospitalization and treatment costs. Critical illness is definitely one thing we should always prepare for in all aspects (physically,mentally, emotionally, & financially) since it can happen to anyone at any time.
In recent years, the cost of healthcare in Singapore has significantly increased. Breast cancer and prostate cancer are two of Singapore’s most prevalent cancers, and their treatment costs have risen as well. Everyday, an average of 41 people are diagnosed with cancer and 15 people diagnosed with cancer die.
Although it is not possible to completely avoid cancer, it’s important to have a financial safety net in place to help you deal with the high cost of treatment. Singaporeans may have MediSave and MediShield Life to help pay for medical expenses, but they are often not enough to cover all of your needs. In fact, they may not even cover half of the treatment cost of critical illnesses. In order to protect yourself financially, you must invest in strategies to protect yourself from critical illnesses. We’ll teach you how in this article.
The financial safety net against the expensive costs that comes with it will help you to cope with the financial burden of medical expenses and help you to manage your finances more effectively.
What Does Critical Illness Mean?
Insurers may use the word “dread sickness” or “terminal illness” when referring to critical illness (CI). In addition to these are severe cancers, strokes that leave a persistent neurological disability, and coronary heart disease. The Life Insurance Association of Singapore (LIA Singapore) issued revised critical illness criteria last year, which took effect on August 26, 2020. In accordance with LIA, below are the 37 serious diseases that are covered by CI insurance:
How to Get Protected with Insurance
Once you’ve been diagnosed with a condition on the list, critical illness insurance would typically pay you a lump sum of money. Depending on your coverage, this may be restricted to a late-stage diagnosis only.
The payout you receive is commonly known as “sum assured,” which you can decide on upon your application.
To put this in context, let’s suppose you have a $300,000 sum assured that covers a major cancer. Then suddenly you were diagnosed with a major cancer.At this time, you will receive a lump sum payout of $300,000.
Some critical illness policies can also provide a tier of payments. In this way, you are able to receive multiple payments from your plan. For example, if you are diagnosed with an early or intermediate-stage illness, you may be entitled to a payout equal to a portion of your sum assured. If you are later diagnosed with late-stage illness, you may still be eligible for another payout.
If you are diagnosed with more than one severe illness, some insurance policies may allow you to submit multiple claims. If you have a recurring illness or relapse, you may be able to file many claims.
As you can see, there are a number of options available to you if you want to obtain your entire sum assured. You may be able to obtain more than 100% of your sum assured under some policies, where you’re allowed to make numerous claims. This means that when comparing different plans, it’s crucial to thoroughly review the inclusions of the document and understand how each one pays out benefits.
Having insurance can protect you and your loved ones financially if you become unable to work because of an illness. You can also use it to cover the additional expenditures associated with serious diseases for which your current health insurance does not provide coverage.
How Much “Sum Assured” Should I Have?
LIA advises that Singaporeans should have at least $316,000 in critical illness insurance, which is nearly 3.9 times the average yearly salary at the time of that study (Straitstimes, 2018).
To fit it to your actual situation, you can simply multiply your yearly salary by 3.9 to get the exact amount you need. However, for some, this may not be sufficient.
The LIA also said that people should make sure that their insurance can cover the demands of their families for a recovery period of five years. To be safe, it’s a good idea to make sure your insurance covers at least five years’ worth of your household’s expenses.
Keep in mind that these are only suggestions and that there is no specific rule for this. If you get severely ill, you may be able to find alternate means of supporting yourself and paying off your debts. Calculating how much money you would require in the event of a five-year disability is best done now.
Consider what you can afford at this time, rather than trying to purchase coverage you can’t afford. It’s better than having no protection at all.
A Few Notes To Consider
When it comes to critical illness insurance, it’s vital that you read the policy documentation, not simply the brochure, before signing up for critical illness insurance.
The exclusions list may include pre-existing diseases or hereditary risks, so be sure to read through it thoroughly to see whether you qualify for a payment. There’s nothing worse than learning you’re not eligible for a payment because of a specific exclusion.
There are a few things to keep in mind concerning CI insurance before signing up:
- Benefits are attainable only if the illness falls inside the policy’s criteria.
- Your medical bills won’t be the basis on the lump sum you receive.
- Certain medical conditions or surgical procedures may necessitate a waiting period. Your benefits may be forfeited if you experience any symptoms that have been investigated for any illness, or are diagnosed within the waiting time.
- A survival or waiting period (usually 7 to 30 days) must be met in order to receive a payout from the insurance policy. In the event that you die before the policy’s survival term has passed, your family may not get any compensation.