All you need to know about how critical illness (CI) insurance works in Singapore
Critical illness insurance is one of the most talked about insurance policies in today’s time. However, people tend to think that critical illness will not happen to them, especially when they are in their prime years and are far from the age of retirement. On the other hand, according to Singapore Cancer Society, a single day in Singapore will see about 41 people being diagnosed with cancer and 15 people dying from it. As a matter of fact, 1 in 4 people may develop cancer in their lifetime. Hence, it is imperative that you get coverage against critical illnesses by getting a critical illness plan. To help you with your financial planning so that you are covered against the unforeseen, this article attempts to understand how critical illness policies function in Singapore.
The need to understand critical illness insurance for better financial planning A study published by Life Insurance Association Singapore namely 2017 Protection Gap Study– Singapore highlighted the protection gaps of working adults in Singapore. The overall national protection gap for mortality protection and critical illness protection came up to around S$893 billion in the year 2017. This equates to S$169,673 mortality protection gap and S$256,826 critical illness protection gap per economically active adult. This study further reaffirmed the need for Singaporeans to review and update their insurance coverage. Knowing more about critical insurance plans can help you make better financial planning decisions. What is critical illness insurance? Critical illness plans provides coverage for medical emergencies like heart attacks, strokes or cancer. Typically, the list of critical illnesses which are covered under such insurance plans are defined within the policy terms. The insured receives a lump sum payout upon the diagnosis of a critical illness.
How does critical illness insurance work? A critical illness insurance plan is different from a health insurance plan. Critical illness plans pay out a lump sum upon diagnosis of the illness, while health insurances provide coverage for hospitalisation and other medical cost. The lump sum payouts from critical illness plans can help to pay for costs not covered by a health insurance or traditional insurance. Some insurance companies even provide a monthly payout benefit for a specific period to provide additional financial support during the recovery phase. So, it is beneficial for an individual to know about the type of critical illnesses covered and the various benefits offered by the insurance plan before making the purchase. Types of critical illnesses covered Under Life Insurance Association Singapore’s Critical Illness Framework 2019, there is a list of standard definitions for severe stage of 37 critical illnesses used industry wide. However, the coverage of critical illness plans varies for different plans, depending on how the insurance companies structure their products. Nowadays, most critical illness insurance plan provides coverage for different stages of critical illness such as early stage, intermediate stage and advanced stage. Some even provides multiple claims subject to policy terms. It is important to understand that a payout will only be made if the diagnosis and detection of the illness is done by a certified medical practitioner.
Additional benefits Most policies come with a range of additional benefits. One of such additional benefit is child coverage whereby coverage can be extended to a child when both parents are covered under the same critical illness plan. Other benefits include premium waiver benefit where premiums are waived in the event of loss of income due to critical illness. With all uncertainties in life, a critical illness plan works as a safety net providing financial security in the event of medical emergencies. However, it is always advisable to thoroughly go through the terms and conditions of the plan. It is important to know about the types of critical illnesses covered before buying a policy. You can even visit our Social sites: Facebook:- https://www.facebook.com/PrudentialSingapore/ Linkedin:- https://www.linkedin.com/company/prudential-assurance-company-singapore/ Youtube:- https://www.youtube.com/channel/UCWs_Qg2Rahok4kORir5w4eQ Instagram:- https://www.instagram.com/prudentialsingapore/?hl=en
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