A First-Timer’s Guide To Critical Illness Insurance

When buying health insurance, you might have also come across a product known as critical illness insurance. True to its name, critical illness insurance offers coverage that is specific to critical illnesses that may affect you. But how does this form of coverage differ from your basic medical insurance plan? And, do you really need to buy critical illness insurance if you already are covered for hospitalisation?

If you are new to critical illness insurance, you may have these questions in mind. To help you out, we will take you through a quick overview of a few things you need to know about critical illness insurance.

What is critical illness insurance?

Critical illness insurance is a form of insurance that covers you against certain critical illnesses. If you are diagnosed with any of the diseases that are covered, you get the sum assured as a lump sum payout.

Once your claim has been approved, you will receive the payout; you do not need to provide your insurer with any further bills to show where you are spending your payout. You may use this amount for any expenses that you incur during the entire period of your illness. For instance, if you have to stop work, you may use some of the payout to pay your rent, to afford the groceries, and to manage the deductible/co-pay portion of your health insurance. You may further use the money to pay for your child’s education, for transport to the medical centre, to afford utilities and so on.

Whatdiseases are covered?

Life Insurance Association (LIA) Singapore has outlined 37 illnesses that must be covered by all insurers in the country. These include major cancer, heart attack of specified severity, irreversible aplastic anemia, muscular dystrophy, benign brain tumour, multiple sclerosis, and major burns, among others.

Find the whole list of critical illnesses here.

What are some features to look for in critical illness insurance?

Critical illness insurance can play an extremely important role in supplementing the hospitalisation insurance you already have, either through your MediShield Life or through your Integrated Shield Plan. Therefore, it is important that you select a suitable plan to cover you adequately. To that effect, here are some features to seek when you buy critical illness insurance:

  • Flexible coverage

Look for a plan that offers you the flexibility to modify your coverage when you need to do so. You should be able to add supplementary benefits to enhance the coverage of your plan. This way, you can start off with a basic critical illness insurance plan and later add benefits that offer increased protection, such as including coverage against recurring or relapse of conditions.

  • Sufficient sum assured

The payout from critical illness insurance can truly be a lifesaver. Therefore, you would want to choose the correct sum assured. Choose a plan that gives you the recommended sum assured you would need if you fell ill. There are critical illness insurance plans that provide customisable sum assured for you to choose from.

Quick tip – According to the LIA, it takes around 5 years to fully recover from a critical illness. Therefore, you might want to choose a payout value that can cover your expenses for around 5 years or more, assuming that you stop work while focusing on recovery.

  • Affordable premiums

Finally, make sure to choose a plan that has premiums that fit your budget. If you suddenly find that you cannot afford coverage and stop paying premiums, you will lose the plan that you have paid for till date. So, ensure that you calculate the plan’s affordability over the long run. It is also worth noting that your premiums will increase with age, therefore it is recommended to get coverage when you are younger.

If you are buyingcritical illness insurancefor the first time, do seek the help of a financial consultant.

We hope that this quick guide will prove to be handy. Good luck.