Do You Really Need Critical Illness Insurance? Here Are 4 Reasons Why You Probably Do

Critical illnesses are on the rise in Singapore. But is it really worth it to get insurance for it? From the costs to the coverage, we list it down for you.

When you’re young and healthy, it’s easy to think that you’ll always stay that way. While that might be the case if you’re lucky, did you know that almost 1 in every 4 people in Singapore develop cancer in their lifetime, or that almost one-third of all deaths in Singapore is due to heart disease or stroke?

In the unfortunate event of a critical illness diagnosis, critical illness (CI) insurance will be your biggest helping hand. It can cover your treatment costs, your lost income, and much more, allowing you to focus fully on the process of recovery without the pressure of other unnecessary concerns weighing you down.

Critical Illness Insurance vs Life Insurance

Do you really need critical illness insurance if you already have a life insurance policy? In most cases, yes, you do. Both critical illness and life insurance might seem similar on the surface, but they serve fundamentally different purposes.

Life insurance pays you in the event of the policyholder’s death and is meant to leave a legacy or support loved ones with end-of-life costs. Critical illness insurance, on the other hand, covers treatment-related expenses when the policymaker is diagnosed with a critical illness.

In short, critical illness insurance helps you recover, while life insurance helps support your family after your death. Both of these policies cover circumstances that the other does not, and this is why it’s crucial for you to get both types of coverage to stay protected in any situation.

So, what exactly is the difference between critical illness insurance and health insurance, and are there any other benefits to critical illness coverage?

Here are all the main ways in which critical illness insurance can help you.

1. Covers Medical Costs

You might be thinking that you already have Medishield Life or an Integrated Shield plan that will help you manage your treatment costs in the event of a critical illness diagnosis. While this may be true, there are gaps in these hospitalisation or health insurance plans that critical illness insurance will cover for you.

Firstly, while hospitalisation plans like Medishield Life help pay your medical bills, they usually have maximum claim limits. While Medishield Life allows claims up to S$150,000 per policy year, there are specific limits for each category of spend, which might restrict how much you can benefit from it. Additionally, the treatment for late-stage cancer can reach up to S$200,000 annually, which means that you might need to pay S$50,000 out of your own pocket.

Claims are also limited to hospitalisation at B2 or C wards at public hospitals.

Similarly, Integrated Shield plans also always require co-payment by the policyholder for their medical expenses. Trying to find out whether your treatment-related expense is claimable by your health insurance, or worse – trying to find out whether you’ll be able to afford the rest of your medical bill, is the last thing you want to be doing when you’re in the process of recovering.

While critical illness insurance policies don’t usually cover a specific aspect of recovery-related medical expenses, they offer a guaranteed lump-sum payout upon diagnosis that can be used in any way that the policyholder wishes.

So, your critical illness insurance can help you pay out the rest of your medical or treatment-related expenses that your health insurance misses out on, making it easier for you to focus on recovery.

2. Replaces Your Income Upon Diagnosis

One of the main concerns that critically ill patients grapple with is losing their income. Often, critical illness can make it difficult for patients to continue working as they usually would.

On average, a diagnosed patient takes around 5 years to recover, but the typical Singaporean has a shocking 80% protection gap between their existing coverage and the total income that they are likely to lose within these 5 years.

In Singapore, many working adults (33 to 55 years old) are also part of the sandwich generation – they are required to care for both their ageing parents and their growing children. A survey by NTUC Income revealed that 94% of those in this demographic feel pressured by this financial responsibility.

This makes it all the more important for Singaporeans to find a way to bolster their loved ones from the effects of losing their income, and this is where critical illness insurance comes in.

While parts of the critical illness insurance’s lump-sum payout received upon diagnosis can be set aside for treatment and recovery costs, this lump sum amount can also be a reassuring source of alternate income that can be used to support the policyholder’s loved ones during the period of recovery.

3. Critical Illness Insurance is Cheaper When You’re Young

There are a couple of reasons why the best time to get insured for critical illness is when you’re in your 20s or 30s. Most critical illness insurance policies base their premium levels on different factors such as the policyholder’s age, health, lifestyle, and so on. Generally, premiums are much cheaper when you’re younger and healthier.

Often, critical illness insurance policies also exclude coverage for pre-existing medical conditions. This means that if you wait until you’re older and have already developed certain conditions, you won’t be able to get protection for those illnesses, which drastically reduces the value of your policy. In contrast, if you get your critical illness insurance when you’re young, any potential conditions that you might develop later on in life will most likely be automatically covered, which makes your policy much more beneficial.

In fact, if you apply for critical illness insurance when you’re older and possibly already diagnosed with a medical condition, you would have to wait for your application to get processed before you can receive the coverage that you might need immediately.

In the worst-case scenario, you might even get rejected from the policy because of your age or health conditions. All things considered, the best time to get your critical illness insurance of choice is now.

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4. Young Adults Are Becoming More Likely to Get Critical Illnesses

While it’s true that the risk of getting diagnosed with a critical illness is higher with age, the unfortunate fact is that critical illness diagnoses amongst younger adults have been on the rise in Singapore.

Recent trends show that the probabilities of stroke amongst the young have been on an upward trend. Diseases like skin cancer, stomach or colon cancer, have also been more commonly diagnosed in the younger population in Singapore.

Most of these illnesses are covered by the average critical illness insurance policy. It might be better to be safe than sorry and get a comprehensive critical illness coverage plan today to protect yourself against the repercussions of any undesirable events in the future.

How Do You Choose the Best Critical Illness Insurance Policy?

Now you know why you should get a critical illness insurance policy, but how do you know which one you should get?

Most critical illness insurance policies in Singapore cover 37 critical illnesses and offer a lump sum payout if the policyholder is diagnosed with any one of these illnesses. Each policy has different benefits that cater to different customers – here are 4 effective policies that you might want to consider:

1. MSIG CancerCare Plus

A critical illness plan for younger customers looking for affordable cancer coverage.

MSIG’s CancerCare Plus provides coverage for cancer diagnosis with accelerated coverage for early-stage diagnosis. With affordable premiums that cost up to 64% less than its competitors and a simple online application process, this is a convenient plan that is especially cheap for customers below the age of 50.

2. Singlife Comprehensive Critical Illness

A comprehensive and affordable critical illness plan.
Singlife Comprehensive Critical Illness is a classic policy that offers coverage up to age 99, and additional special benefits that can be claimed multiple times. This policy is impressive for its affordable premiums that stay constant throughout the policy term. It also offers coverage for diagnosis of any stage of a critical illness, making it a well-rounded and simple policy that is worth its price.

3. Great Eastern - GREAT Family Care: Multi-generational Critical Illness insurance

This plan covers 53 critical illnesses; 25 juvenile conditions; death, terminal illness and total and permanent disability.
Great Eastern’s GREAT Family Care is a great option if you are looking for coverage for not just you, but also for your children and your parents. It provides coverage for a long list of 53 critical illnesses and also offers lump sum payouts in the events of death, total and permanent disability in addition to just diagnosis of a critical illness.

4. FWD Big 3 Critical Illness Insurance

A critical illness plan that covers the most common critical illnesses.
The FWD Big 3 Critical Illness insurance is a stand-alone policy that is the perfect choice for those looking to top-up their existing policies. It offers comprehensive coverage for 3 big critical illnesses: cancer, heart attacks, and stroke, which are the main conditions affecting Singaporeans. With affordable premiums and three levels of coverage amounts to choose from, this policy is great for those looking for coverage that focuses on common illnesses.

If you’re looking for more information about CI insurance plans, you can find our carefully curated list of the best policies on the market here .

A critical illness diagnosis is life-changing, but you deserve to focus on recovery. The last thing you should have to worry about is the financial costs that come with a diagnosis, and getting a critical illness insurance plan to complement your other policies might be the best way for you to navigate these expenses.

Looking to find out more about life insurance policies? Check out our list of life insurance policy reviews and guides here .

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Christopher Wong

Christopher is a licensed financial adviser and a General Insurance Broker with PolicyPal. He has nine years of experience in the insurance industry with various notable companies including Chubb, AVA, AIA, NTUC Income, and more. Today, Christopher helps to oversee the insurance content on ValueChampion and bring business growth to PolicyPal.