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.