Critical Illness plans complement your Shield plan as it pays out a lump sum and can be used to cover periods of unemployment during recovery or to purchase additional medical equipment or modifications to your home (eg installing a ramp).
Aim for a coverage level at about 5 years of your annual income to give you piece of mind during your recovery.
We have compared the 5 different types of critical illness plans in the market below.
Cancer & Maternity Covers
Early-Stage Critical Illness Cover
Late-Stage Critical Illness Cover
Multi-Pay Critical Illness Cover
Whole of Life Critical Illness Cover
Cancer plans cover up to age 84 and pays out part of the sum assured if diagnosed with early-stage cancer.
Other plans include Maternity plans which cover a wide range of maternity and newborn complication and illnesses. Multiple claims are possible.
|Choice of cover from 10 years to 99 years old. Covers early to late-stage critical illnesses.||Typically available as a rider on a Term Insurance product. This type of plan covers you for the 36 severe-stage critical illnesses, death and total and permanent disability.||Pays out multiple times for different stages of critical illnesses. Up to 900% of your sum assured can be paid out.||
Pay for a limited period e.g. 20 or 30 years and get whole of life cover.
The cover is at a guaranteed level up to age 71, 76 or 86. Thereafter, the cover is based on the sum assured or a lower guaranteed level.
Riders can cover early to late-stage critical illnesses.
|Up to 50% commission rebate||Up to 50% commission rebate||Up to 50% commission rebate + up to 20% off perpetual discount||Up to 50% commission rebate||Up to 50% commission rebate + up to 20% first year discount (till 30 Jun 2022)|
1. Should I apply for my Critical Illness cover now or wait till I am older and more likely to get struck by Critical Illness?
Our advice is that you get your Critical Illness Insurance cover as soon as possible. As you get older, there is a high chance that you would develop medical conditions. Even if these medical conditions are not classified as "critical illness", it may mean that insurer would not be willing to offer you any cover at that time.
2. Which critical illness plan is right for me?
It is really a balance of the premium that you have to pay and the peace of mind that you get with a more comprehensive cover. If you are younger, we recommend that you consider getting whole of life plans as the premium rates are still affordable, you get lifetime cover and you "lock-in" the critical illness premium rates once the premium payment period is over. If you are older and you have a lower budget, then consider the cancer plans or late-stage critical illness plans.
3. Why is it a good thing to "lock-in" critical illness rates?
With medical advances, there is earlier detection of critical illnesses and test become more easily accessible. This means the it is likely that there will be more claims over time and insurers will then consider increasing the premium rates. Note that the premium rates for critical illness plans are typicallyy not guaranteed for the entire policy term. So an advantage of plans with a limited payment period is that the insurer can no longer adjust the premium rates on your plan after the premium term.
4. Do I need to go for a medical examination if I apply for Critical Illness Insurance?
If you are above a certain age and/or sum assured, then, yes, you will need to go for a medical checkup.
5. Should I choose a plan with a surrender value?
The plans with no surrender value are generally cheaper. However, the more "valuable" whole of life covers are structured with a surrender value due to its long policy term. This provides you with a choice of surrendering your policy with the possibility of getting your premiums back if you hold on to the plan long enough.
InsureDIY is a Broker licensed by the Monetary Authority of Singapore and is an Exempt Financial Adviser. This advertisement has not been reviewed by the Monetary Authority of Singapore.