Pills and medication for illnesses

What You Have to Know About Critical Illness (CI) Plans.

At some point in your life, either you, your family members, or your peers will experience illnesses that will be highly detrimental to your or their lives. According to the Singapore Cancer Society, cancer treatment is estimated to be between $8,000 to $17,000 every month! 


Covering healthcare costs to mitigate the severity of critical illnesses can be emotionally and financially stressful for you and your family members. It is vital to get a critical illness plan.


I’m Still Young. Do I need to think about critical illness plans?


Many of us feel that we are still young and that CI will not strike us anytime soon. While statistically, that is true, we can never predict the future. In fact, according to the Life Insurance Association (LIA) of Singapore Protection Gap Report of 2017, it takes an average of 5 years to recover from a CI.


Getting a critical illness at a young age will dampen and impact your career progression and income. It is also crucial that you get yourself insured when you are healthy, as you are uninsurable once you are hit with any critical conditions.


What is a Critical Illness Policy?


In general, Critical Illness Insurance provides coverage for severe illnesses such as Stroke, Cancer, Heart Attacks, Kidney Failure etc. Upon diagnosis of any early CI or CI conditions, you will be covered up to your insured amount. This sum will help you pay off a significant portion of your hospitalisation expenses and protect your financial situation as you are out of work without a regular income.


Kinds of Critical Illness coverage:


There are three kinds of CI coverage currently available:


  1. An additional rider with the primary Term & Whole Life Plan.
  2. A additional rider with the Endowment or Investment-Linked Policy Plan
  3. A standalone policy that is usually more comprehensive.


How much coverage do I require?


There are two important factors to consider when choosing sufficient coverage: One being your age and the other being your income. You do not want to get over-insured if you cannot pay a steep premium. Premiums will get more expensive as you grow older, and if your sum assured is higher.


A rough guide from the LIA recommends the sum assured for every age group. 


Age    Sum Assured
0-29 $300,000
30-39 $800,000
40-59 $1,300,000
>60 Onwards $200,000


Early Critical illness Plans VS Critical Illness Plans


Some insurance companies provide a plan for both Early Stage Critical Illness (ECI) and Critical Illnesses. Do note that the Life Insurance Association recognises 37 conditions labelled as ‘Critical Illness’. The pros of CI Plans are that the Payout can help defray both medical and non-medical expenses such as loss of income and lifestyle expenses; premiums are more affordable than ECI plans, and there is a possibility of free health checks included.


However, CI plans will usually provide a one-time payout during late stages when the chance of recovery is lower, which means CI Plans cannot be claimed for any detection of early signs of CI. 


Early Critical Illness Plans offer more comprehensive coverage for various severity of the condition. The payout will be given upon diagnosis of the early-stage illness, and multiple claims can be made depending on cases such as a relapse or another critical illness diagnosis. 


However, ECI plans are costlier than CI plans. ECI plans allow multiple claims and a higher incidence of people diagnosed with early-stage illnesses than late stages.


Want to know more about what ECI and Ci plans are suitable for you? Refer to our website or partner FAs for Early Critical Illnesses Plans today!