4 considerations when buying a critical illness plan
For basic hospital bills, your insurance policy has you covered. But do you have a critical illness plan in place to protect you from life-threatening illnesses?
In the wake of a serious illness such as major cancers, a stroke or a heart attack, few things can bring more relief than knowing that your hospital bills are being covered by an insurance policy you purchased — especially if at the time you bought it, it felt like a burden to pay for.
Critical illnesses are more common than we think and don't just affect the elderly. 1 in every 4-5 people in Singapore may develop cancer in their lifetime1 and 450-550 young adults between the ages of 16 and 39 get diagnosed with cancer each year in Singapore2.
Critical illness plans are designed to pay out a lump sum during the time of need when an unfortunate critical illness diagnosis happens. In order for you to focus on recovery, you may have to stop work and your daily expenses will be impacted. In addition, you may have extra medical and non-medical related expenses to manage on top of your reduced income. This can be a serious financial strain and cause further stress.
But, before you rush out to buy a critical illness plan, here’s a question you need to ask yourself: which critical illness plan is right for you?
Unlike socks or medication we can buy over the counter, when it comes to a critical illness plan, there is no one-size-fits-all solution. A critical illness plan that works for a friend may turn out to be the worst possible option for you. Here are a few things to consider when purchasing a critical illness plan.
1. How much is enough?
The amount you need is dependent on your monthly living expenses. As a rule of thumb, LIA recommends getting enough coverage for the duration of the assumed recovery period of 5 years3, as this is roughly the amount of time the average person would need to recuperate from a critical illness. The types of illness and treatment matter too. Some illnesses, like cardiovascular diseases and cancer and their treatment options involved, may require longer recovery periods.
2. How comprehensive do I want my critical illness plan to be?
You should consider the level of coverage you want your critical illness insurance plan to provide. Do you want coverage against early stage and/or late stage critical illnesses, coverage against cancer only or for all critical illnesses? Evaluate and understand you and your family’s needs. You now have the option to build your critical illness protection as you go through life’s milestones with PRUActive Protect.
3. Does your family have a history?
A medical history, to be exact. For example, if there is a high incidence of cancer in your family, you might want to look into a multi-pay plan, as cancer is a critical illness that can recur.
4. Does the plan stipulate a waiting and/or survival period?
Critical illness plans typically come with waiting and/or survival periods. As the name suggests, a waiting period means that the benefits will only come into effect after a certain period of time has passed. Similarly, a plan with a survival period may only pay your claim if you can survive the stated period after being diagnosed (depending on the terms of the plan). It is important to take note of these periods to understand your critical illness coverage better.
Whatever the illness, the earlier it is diagnosed, the easier it is to manage and the higher the chances of a full recovery. Learn more about the different critical illness plans available so that you can reduce the financial burden and the worry it will cause you and your loved ones.
1National Registry of Diseases Office, Singapore Cancer Registry, Singapore Cancer Registry 50th Anniversary Monograph (1968 – 2017), data period from 2013-2017.
2SingHealth, National Cancer Centre Singapore and Team Singapore athletes set first national record to support young cancer patients, 2019. https://www.singhealth.com.sg/rhs/news/patient-care/national-cancer-centre-singapore-and-team-singapore-athletes-set-first-national-record-to-support-young-cancer-patients
3Life Insurance Association of Singapore, “A Guide To Mortality And Critical Illness Coverage In Singapore“ https://www.lia.org.sg/media/1525/180426_lia_mortality_and_ci_101_guide.pdf.
The information in this article does not necessarily reflect the views of Prudential Assurance Company Singapore Pte. Ltd. Certain information in this article may be taken from external sources, which we consider reliable. We do not represent that this information is accurate or complete and should not be relied upon as such.
This article is for your information only and does not consider your specific investment objectives, financial situation or needs. We recommend that you seek advice from a Prudential Singapore Financial Consultant before making a commitment to purchase a policy.
This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact your insurer or visit the GIA/LIA or SDIC web-sites (www.gia.org.sg or www.lia.org.sg or www.sdic.org.sg).
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