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5 Things you need to know before getting a critical illness plan

26 August 2024

8 min read

Getting a critical illness insurance policy is an important step in plugging your overall insurance protection gap in Singapore.

According to the Life Insurance Association of Singapore (LIA), economically-active Singaporeans and Permanent Residents (PRs) have a critical illness protection gap of 80% and mortality protection gap of 23%.

This demonstrates that critical illness protection needs may be neglected by a substantial number of people in Singapore. While critical illness plans are not new in the market, there may be a few reasons why they may be more overlooked than life protection.

Before you get your critical illness insurance coverage, you need to know these 5 things first.

1. What is covered under your critical illness insurance?

Critical illness coverage can be more complex than life insurance coverage. For life insurance plans, a payout to your beneficiaries is triggered when you pass on or are left in a situation of total permanent disability (TPD).

For critical illness coverage, different insurers may offer varying levels of coverage, based on number of critical illnesses, types of critical illnesses and/or stages of critical illnesses covered – whether early, intermediate or major stage critical illness. Another factor that may prevent people from trying to learn more about critical illness insurance is the medical jargon that are commonly used to describe coverage levels.

Rather than avoid the topic, you should spend more time and effort trying to learn more about critical illness plans and which provides the most suitable coverage for your needs.

One way to determine if a critical illness insurance plan is comprehensive is to look into the LIA's critical illness framework detailing a standard list of 37 major stage critical illnesses and its definitions. You can also refer the Ministry of Health (MOH) data for principal causes of death in Singapore.

2. How long does your critical illness insurance provide coverage?

Each of us will have our unique critical illness insurance needs and wants. While there are critical illness insurance plans that offer an option to extend our coverage up till age 100, there are also plans with shorter coverage tenures.

In general, longer-term critical illness coverage can become increasingly valuable on the back of increasing retirement age, and hence being economically active and life expectancy in Singapore. Even in the scenario you retire or do not have any dependents, you may continue to need a critical illness payout to sustain your current lifestyle, or to hire help to care for yourself. With rising life expectancy, you may also have elderly dependents to care for even after you stop working in the future.

Critical Illness Plan in Singapore – 5 Things You Need to Know

3. How much critical illness insurance coverage do you need?

When deciding how much you need to be covered for, you can again refer to the LIA for its benchmark 5-year recovery period for critical illnesses.

While you are recovering from a critical illness, the last thing you want to stress about is going to be how to afford your current lifestyle. At the same time, you have to continue paying for your home loans, electricity and water bills, mobile and internet bills, children's allowance and so on.

While you may be able to tap on your savings to pay for these expenses, it may put your family's financial future at greater risk, especially in the worst-case scenario where you don't recover and cannot replenish that savings.

This is where a payout from a critical illness plan becomes valuable. Apart from just taking away the stress of being able to continue paying for your daily expenses, you can also use this payout to seek treatment.

To calculate the actual number that you would need coverage for, a safe figure would be more than five years of your annual expenses. This is because in addition to your current expenses, you may also incur additional expenses from getting the treatments that you want and potentially needing to hire help around the house or to provide care for you.

4. What is the cost of critical illness insurance?

Having a comprehensive critical illness plan can be valuable, but it also costs money. We need to consider the affordability of the plan, while striking a balance between other important expenses, such as our daily living expenses, investing for our retirement and saving for our children's education.

Even if you have trouble affording a coverage level worth the recommended five-year recovery period, you should consider getting lower coverage rather than no coverage.

AIA Absolute Critical Cover (ASCC) covers you for 150 multi-stage critical illness. It is also the first critical illness plan in the market to cover common health conditions such as Thyroid Disorders, Sleep Apnoea, Benign Prostatic Hyperplasia (requiring surgery), and Glaucoma (requiring surgery).

5. What else does your critical illness coverage provide?

Some insurers provide value-added services to help keep their customers healthy. At AIA, we stay at the forefront of the insurance industry by constantly seeking out innovative solutions for your benefit.

For instance, when you purchase some AIA products, you will able to leverage on AIA Vitality, our health and wellness programme designed to encourage and reward you for living well. The programme takes a comprehensive approach to provide you with the tools and support you need to understand your health, learn how to improve it and offers rewards to motivate you along the way.

Another value-added service you will have access to is Teladoc Health Personal Case Management service, which provides personalised medical support from diagnosis, treatment to recovery for critical medical conditions.

You will also be able to tap on WhiteCoat. With a flat consultation fee of $12^[1], you will be able to receive professional medical advice from Singapore-registered doctors via video consultations and have your prescribed medicine delivered to your doorstep. And with the new and AIA-exclusive WhiteCoat Chronic Home Care^[2] program, you can manage and treat chronic conditions such high blood pressure, diabetes, and high cholesterol, in the comfort of your home via the WhiteCoat app.

^[1] Excluding GST, medication, and delivery charges.

^[2] Subscription cost is applicable, and enrolment is subject to WhiteCoat General Practitioner's assessment of eligibility via teleconsultation.

^{This article was originally published on 4 December 2019 and updated with new information.}

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5 Things you need to know before getting a critical illness plan

1. What is covered under your critical illness insurance?

2. How long does your critical illness insurance provide coverage?

3. How much critical illness insurance coverage do you need?

4. What is the cost of critical illness insurance?

5. What else does your critical illness coverage provide?

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Recommended products

AIA Absolute Critical Cover

AIA HealthShield Gold Max

AIA Pro Lifetime Protector (II)

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