Essential Sickness Insurance in Singapore: The Full Information (2021)

Serious illness insurance is generally considered good in Singapore if you can afford it. It is generally not considered as important as hospital insurance, which every adult should have, or life insurance, which everyone with loved ones badly needs.

However, if you've already met these basic needs, then critical illness insurance is probably the next type of insurance to consider.

What exactly is a "critical illness"?

Critical Illness Insurance offers a lump sum payment if you are diagnosed with a serious illness. But it is not up to you to decide what is "critical illness".

Instead, every critical illness insurance company keeps a fixed list of the diseases it covers. Heart attack, stroke, and late-stage cancer are almost always on the list.

The number of diseases on the list varies from plan to plan. Some offer protection against a long list of diseases, while others target only a few diseases, such as cancer.

So how good is the protection a given plan provides? The Life Insurance Association Singapore (LIA) maintains a list of 37 severe stages of critical illness as part of its Critical Illness Framework 2019.

These include severe cancer, heart attack, stroke, coronary artery bypass surgery, end-stage kidney failure, end-stage lung disease, and end-stage liver failure, to name a few. If you want to verify that a particular insurer's critical health plan is comprehensive, it's best to compare it to LIA's list.

How does serious health insurance work?

Serious health insurance usually pays out a lump sum in cash as soon as you are diagnosed with an illness on the list. This may be limited to late-stage diagnosis depending on your policy.

This flat rate is known as the "sum insured" and you can usually choose it.

Let's say you have $ 200,000 insured and a heart attack is one of the conditions that your plan has full coverage for. If you have a heart attack, you will receive a flat-rate payout of $ 200,000.

That is the basic mechanism. However, some plans have more complex withdrawal terms in different situations.

For example, some major illness plans are multi-paid. This way, you can get more than one payout from your plan. For example, if you are diagnosed with early or intermediate disease, you may be entitled to a fraction of your insurance coverage. You can then receive another payment if you are later diagnosed with late-stage disease.

Also, some plans allow you to have more than one claim if you are diagnosed with more than one critical illness. You can make multiple claims if you have a recurring illness or relapse.

As you can see, there can be several ways to get your full amount insured. Some plans may also give you the option to receive more than 100% of your insurance amount, such as: B. by making multiple claims. Therefore, it is important to read the policy documents carefully and understand the different payout mechanisms of the plans when comparing them.

I already have life insurance. Do I still need serious health insurance?

If you already have health AND life insurance, you can be well insured – now you are an ideal candidate for serious illness insurance.

Health insurance is not as important as health insurance (for all adults) or life insurance (for loved ones). So, if you don't already have insurance, the first thing to do is to use your resources to get these important things. If you have any money left over after that, you can seriously consider getting health insurance.

The flat rate payouts offered in the event of a serious illness may sound similar to life insurance payouts, but they are not the same. Usually you have to die or become incapacitated to receive a life insurance payout. (If you die, your family or beneficiary will get the money).

On the other hand, Critical Illness Payments are available upon diagnosis of a relevant illnesswhether it proves fatal or not.

Even so, many life insurances come with optional drivers for serious illnesses – more on this below. So check your existing life insurance policy to see if you are already covered for critical illnesses.

How does heavy health insurance differ from health insurance?

Health insurance can sound suspiciously similar to critical illness insurance. And if you get sick, you may be eligible for withdrawals from both types of plans. But they actually work very differently.

The health insurance pays for you medical expenses if you are being treated in a hospital. It is considered essential because of the relatively high cost of health care in Singapore, particularly private health care.

Note, however, that if you use an Integrated Shield plan (the cheapest type of hospital insurance for Singaporeans and PRs) you will always have to pay part of your bill. The plan does not cover 100% of your medical expenses and you will always have some expenses.

Serious illness insurance, on the other hand, offers you one Lump sum payment upon diagnosis with a relevant illness, regardless of the desired treatment or the amount of medical expenses you have incurred.

You can use the money however you want – for example, to pay for out-of-pocket medical expenses not covered by your hospitalization, or as income when you need to quit your job and focus on treatment and recovery.

How to choose the best major illness insurance plan

By now you should have a good idea of ​​what serious illness insurance includes and what factors to look out for.

In addition to comparing the list of illnesses, the sum insured and the terms of payment, here are a few questions that can help you find a plan that is even better tailored to your needs.

  1. Do I want a critical illness driver or a stand-alone plan?
  2. How long do I want to be insured?
  3. Do I Really Need Insurance Cover for ALL Serious Illnesses?
  4. Am I willing to pay more for early coverage for critical illnesses?
  5. Am I willing to pay more for relapses?

1. Do I want a critical illness driver or a stand-alone plan?

To get protection from critical illnesses, you can either get one stand-alone plan for critical illnesses or a Critically Ill drivers or an optional add-on for a life insurance.

Both term and life insurance plans can be associated with drivers with critical illness. These drivers can extend your life insurance coverage to critical illnesses; H. You can receive your life insurance sum (payable beforehand only in the event of death or total and permanent disability) if you are diagnosed with an insured critical illness.

A major benefit of critically ill drivers is that they are typically cheaper than standalone plans. But once you receive that payout, your policy may no longer cover death or permanent disability.

However, this is not a standard feature. Some insurers may offer a separate serious illness coverage if you are diagnosed with a serious illness that does not affect your life protection. You should check your policy text for this.

In contrast, standalone plans tend to be more expensive. But you can then compare across a variety of insurers to find a plan that offers exactly what you need without compromising your life insurance coverage.

2. How long do I want to be insured?

The first time you sign up for a Serious Illness Plan, it is important to consider the age you would like to be protected for.

For example, a specific plan gives you the option to cover until you are 65, 75, 85 or 100 years old. Your policy is automatically renewed annually up to your specified age.

The problem here is that Self-insurance premiums for serious illness increase with age. As you get older, the likelihood of being affected by a critical illness increases dramatically, and so does your premiums.

Unlike life insurance, you may not be able to “hold onto” a lower premium by enrolling at a younger age. Therefore, ask the insurer about the premium table so that you can see how much you have to pay as you get older. This will also help you decide how long you want to stay insured.

When it comes to drivers with critical illnesses attached to your life insurance, your coverage and premium structure may be slightly different. For example, if you have life insurance, your premiums can be paid for life or only for a limited premium payment period.

3. Do I really need insurance cover for ALL critical illnesses?

Serious illness insurance can vary widely depending on how many illnesses they cover. On one end of the spectrum, some plans will cover you for over 100 conditions at each stage. On the other hand, some plans only target cancer or the most common critical diseases.

Obviously, it is impossible to predict what critical illness you are likely to suffer from. But certain people might be more concerned about certain conditions.

For example, if many members of your family have cancer, you may want to choose a plan that allows for multiple payouts from early to late stages because cancer is a disease that is prone to recurring. If you are on a tight budget, it may be preferable to create a plan that only covers cancer than no plan at all.

You will also need to choose between comprehensive critical illness coverage or a (likely cheaper) plan that covers a smaller list of illnesses, like the "Big 3" critical illnesses.

This is where your budget likely plays a big role in deciding which type you can afford.

4. Am I willing to pay more for critical illness coverage early on?

Serious illness insurance, in its simplest form, provides coverage for late-stage diagnoses. Today, however, many plans also offer early and / or mid-stage withdrawals. Obviously, they cost more.

As the name suggests, early-stage critical illness plans offer payout if you're diagnosed with a critical illness at an early stage. If you're the type of person who goes to screening on a regular basis, you are more likely to get sick with an illness sooner.

As with many things in life, early coverage for critical illnesses is a good thing – if you can afford it. So again it boils down to reviewing your budget and assessing whether you can afford the extra coverage.

Remember that early-stage diseases tend to be more treatable and less devastating. So if you are on a tight budget, avoid it for now.

5. Am I willing to pay more for relapses?

Earlier we mentioned it Multi-Pay Plans For Serious Illnesses which allow you to make multiple claims when you are on one Relapse or recurrence of an illness.

So if you get cancer in the early stages and then relapse later, you may have a total of 2 claims.

If you are considering a multi-pay plan, be sure to read the terms and conditions for each payout and note the percentage of the sum insured that you can claim in early or intermediate stages of illness, the amount of time that must pass before your sum insured is checked each claim (usually 1 or 2 years) is "reset" and whether previous benefits affect your sum insured in the event of illness at a later stage.

Similar to early coverage for critical illnesses, the multi-pay function is nice to have, but costs more. So you need to look at your finances and decide if you can afford such a plan.

How much do the premiums for serious health insurance cost?

If you've read this far, you are probably seeing the value of having serious illness insurance. After all, most of us are more likely to die from illness than from crazy accidents. The question is: how much does it cost to take out serious health insurance and can you afford it?

As mentioned earlier, your age has a huge impact on your premiums, which increase as you get older. For example, a 45 year old can expect to pay around 2 to 3 times more than a 35 year old. Smokers also pay more.

When comparing the premiums of major illness plans, it is best to break them down into single tariffs and multiple tariffs, as the latter are much more expensive.

By the age of 35, you can get an insurance policy of approximately $ 100,000 with $ 300 to $ 1,000 per year for a standalone single payment Critical Illness Plan or $ 1,000 to $ 3,500 for a standalone multiple payment Critical Illness Plan.

How much "sum insured" is enough?

According to a 2018 news report, the LIA recommends that the The average Singaporean has critical illness coverage of approximately $ 316,000which is roughly 3.9 times the average annual wage at the time of reporting.

To adjust this number to your own circumstances, you can multiply your annual salary by 3.9. However, for some people, this may not be enough.

Another statement from the LIA was that people should ensure that their coverage can meet their family's needs for more than a year Recovery time of 5 years. You may also want to make sure that you have enough insurance to cover your contribution to your household expenses for 5 years.

However, these are only recommendations and there is no hard and fast rule. You may have other options to replace your income and pay off your mortgage if you get sick. The best thing to do is to calculate for yourself how much you would actually need if you were unable to work for 5 years.

If you can't afford that much major illness coverage right now, just go with your budget.

A few things to consider before getting any health insurance

With critical illness insurance, I cannot stress enough the importance of reading the actual insurance documents, not just the brochure, when considering signing up.

In particular, go through that List of exclusions that may include pre-existing conditions or genetic risksto make sure you know when you wouldn't qualify for a withdrawal. The last thing you want is to find out that you are not eligible for a withdrawal because a certain condition is excluded.

You should also check the guidelines Survival or waiting period (usually 7 to 30 days), this is the time you must survive after your diagnosis to receive the payout. Your policy cannot offer their payout until after the survival period has expired, which means your family may not receive anything if you die prematurely.

Critical illness insurance is stackable, which means you can Sign up for more than one policy for more protection. So if you have a driver that offers $ 300,000 coverage and a standalone policy of $ 200,000, you can claim a total of $ 500,000 if you are diagnosed with a medical condition that is both covered.

In the end, Note the complaint process when you take out serious illness insurance so you know what to do when you get a claimable diagnosis. You may need to submit certain documents such as doctor and / or laboratory reports. Knowing what to ask your health care provider can help make an already stressful time a little less stressful.

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