With cancer, pneumonia and heart disease representing 67% of death in Singapore according to Ministry of health, it is no wonder than critical illness is a popular cover in Singapore. This article will give you the keys to understand critical illness insurance coverage prior to buying one.
What is the difference between a health insurance and a critical illness insurance?
Health insurance reimburses one for expenses related to medical treatments such as hospitalization bills, visits to GPs and specialists. All Singaporeans and PRs are covered under Medishield life, a basic universal health insurance, which pays if you are admitted to B2/C-type wards at public hospitals.
Critical illness insurance provides a lump sum payout in the unfortunate event if one is diagnosed with a critical illness like kidney failure, heart attack, stroke, cancer, etc. With this lump sum payout, you will be able to focus on your recovery without having to compromise your lifestyle and the expenses of your loved ones.
Why should one consider getting a critical illness insurance?
While working hard to provide a better living for yourself and your loved ones, one can suffer a major financial setback if diagnosed with, for example, a major cancer. You can refer to the Ministry of Health (MOH) data for principal causes of death in Singapore. Thus, a critical illness insurance is an important tool to close your protection gap.
What you need to understand critical illness insurance before getting one?
- Different levels of coverage provided by different insurers
Different insurers provide different levels of coverage, from number of critical illnesses, to types and stages of critical illnesses, from pre-early conditions, to early, intermediate or major stage.
- Duration of your critical illness insurance
Critical illness insurances in the 90s only cover up to age 60. Nowadays, coverage is extended to age 75 and even 100. Reason for this upgrade is due to the life expectancy in Singapore. Just like retirement age has been extended from age 62 in 2012 to age 70 by 2030. Thus, it is important that you are covered for critical illness throughout your productive years and beyond.
When is the best time to get a critical illness insurance?
From 26 august 2020, there will be changes to the definition of critical illness. “For instance, “Deafness (Loss of Hearing)” has been amended to “Deafness (Irreversible Loss of Hearing)”, with the term “irreversible” defined to recognise the possibility of future medical treatments that can restore hearing to some level as medical advances are made.”, Straits Times, 29 August 2019. Thus, if you plan to get a critical illness insurance, it will be advantageous to get it before 26 August 2020.
The younger, the better. Premium of critical illness insurance is locked in for the duration of cover unlike health insurance which increases according to age and medical inflation. Thus, the younger you are, the lower the premium and the more likely to get comprehensive cover due to your clean bill of health. Without any pre-existing conditions, you will be covered without any loading or exclusions.
Should you be diagnosed with COVID-19, it will be considered a pre-existing condition. Thus, insurers will only underwrite you 3 months after recovery. When is the best time to insured? When you are insurable!