Critical illness insurance is a form of coverage available in Singapore that can be obtained as whole life insurance, standalone term insurance, or as a critical illness rider to a primary insurance plan.
The purpose of critical illness insurance is to provide a lump sum payment to the insured individual upon the diagnosis of a critical illness condition covered under the policy. The specific types of critical illnesses covered may vary depending on the insurance provider, but they generally fall into categories of severity, such as early, intermediate, and advanced critical illness.
As the name suggests, critical illness refers to serious conditions or illnesses that significantly impact an individual’s quality of life.
Why is critical illness insurance important?
While medical advancements have increased the chances of recovery from critical illnesses, the financial commitments associated with these conditions can continue to accumulate as the person recovers. Expenses such as medication, daily living costs, and transportation can put a significant strain on finances.
Having a critical illness insurance plan serves as a financial safety net in the event of a critical illness diagnosis. It provides a lump sum payout that can help cover out-of-pocket medical expenses during the recovery period and until the individual is able to return to work.
Research findings indicate that the most common types of critical illness claims received by life insurers are major cancer, heart attack of specified severity, stroke with permanent neurological deficit, coronary artery bypass surgery, and end-stage kidney failure.
When someone is diagnosed with a critical illness, such as cancer, heart attack, or stroke, it often renders them unable to work and earn an income. Therefore, having critical illness insurance is crucial as it provides a safety net and ensures that there is a lump sum of money available as income replacement in such circumstances.
There are numerous critical illness plans available in the insurance market. We recommend consulting with our partnered advisors to compare and receive recommendations on the best plans for your specific needs.
Why You Should Consider Standalone Critical Illness Insurance Plans
Non-communicable diseases are on the rise, and while life expectancy is increasing, many individuals are experiencing long-term disabilities and chronic illnesses. These conditions can have psychological and physical effects that make it challenging to carry out daily activities and maintain employment.
Cancer is the most common critical illness diagnosed in Singapore, and both the patient and their families must adapt to the sudden change in lifestyle that accompanies the diagnosis.
Medical insurance and Critical illness insurance
It is a common misconception that existing medical or hospitalization insurance negates the need for critical illness insurance. While medical insurance covers eligible treatment costs, critical illness insurance provides a lump sum payout if the policyholder is diagnosed with one of the listed critical illnesses. This payout helps compensate for potential loss of income if the individual is unable to continue working.
Critical illness can render an individual unfit for work, resulting in a loss of income. Daily bills and other financial commitments continue to accumulate, often leading to the need to sell assets or downgrade one’s lifestyle.
To ensure you are prepared for emergencies and whatever life throws your way, it is wise to have a standalone critical illness plan.
Before You Choose a Standalone Critical Illness Insurance
Regular health screenings play a crucial role in the early detection of critical illnesses. Signs and symptoms of critical illness are often evident only when it is too late for a favorable prognosis. Therefore, regular screenings are essential for uncovering critical illnesses in their early stages, increasing the chances of successful treatment and recovery.
Having critical illness insurance in place allows individuals to focus on their recovery without worrying about the financial aspect of treatment.
Family history also plays a role in the possibility of hereditary risk for critical illness.
Regular health check-ups help detect and manage potential medical conditions or diseases that may develop into something more serious in the future. Early detection allows for early medical intervention, reducing the risk of critical illness.
Early critical illness vs. Advanced critical illness coverage
When purchasing insurance, it is important to consider not only providing a safety net but also managing your finances, building wealth, and achieving your goals.
Having early critical illness coverage is crucial. Critical illness diagnoses come in different stages and severities. For example, early-stage cancer may be categorized as Carcinoma in Situ or Stage T1, while advanced major cancer involves the uncontrolled growth of malignant cells with invasion and destruction of normal tissue.
Relying solely on advanced critical illness coverage is insufficient for comprehensive insurance coverage. If an individual with advanced-stage coverage is diagnosed with Carcinoma in Situ, no insurance payout will be received.
The financial burden of a critical illness can be alleviated by preparing for the worst and having a suitable insurance portfolio. Critical illness insurance provides financial security for both yourself and the people who matter most to you.
With many insurers offering standalone critical illness plans, as well as critical illness coverage as a rider, comparing the best options in Singapore can be complex. It is advisable to consult with our licensed financial advisor for a detailed comparison and personalized recommendations on the best critical illness plan for you.