Types of Critical Illness Insurance People are living longer these days, thanks to the widespread accessibility of better healthcare facilities and attention. However, improved healthcare does not mean chronic diseases have been eradicated; and improved healthcare comes with costs, as some of us would be painfully aware. With one in two Singaporeans battling the likes of heart diseases and cancer, you might agree that hedging yourself financially against the risk of such illnesses is more of a necessity than a luxury. Traditional Critical Illness Insurance Traditional critical illness insurance typically pays cash in a lump sum upon the diagnosis of any of the 30 critical illnesses stipulated by the insurer. The list of 30 illnesses differs across insurers as each insurer has handpicked them out of 37 possible illnesses that all insurers in Singapore are willing to cover. However, consumers can rest assured that the definitions for every one of these illnesses have been standardized by the insurance industry since July 2003. Certain critical illnesses have to be in advanced stages to qualify for claims. For instance, only major cancers in stage 3 are able to trigger claims. From the insurance industry’s standpoint, an illness like cancer is relatively common among Singaporeans, so insurers cover only the more advanced stages to keep premiums competitive. If all stages of cancer are covered, the premiums would have been prohibitively high and out of reach for most singaporeans. Other non-terminal but prolonged illnesses, such as loss of sight, hearing, benign brain tumor and Parkinson’s disease, are also claimable under critical illness insurance. Moreover, with advances in medical science, many will survive years after a critical illness or a serious injury strikes, and the claims proceeds will come in handy to cope with living expenses during recuperation. Traditional critical illness benefits are typically bundled with participating whole life plans, term plans or investment-linked plans or come as a stand alone term plan. There is also a growing trend to add such benefits to mortgage insurance. Participating whole life plans with cash value feature is a flexible option as it allows you to either redeem for premiums paid or to continue enjoying protection into the twilight years. Term plans, on the other hand, are rather popular as they boost coverage in the short term at a fraction of the premium of whole life plans. Early Stage Critical Illness Insurance The recently introduced early stage critical illness plans that pay benefits at a less severe stage would be appealing for those of us who are concerned about financial support for early treatment. In such plans, the benefits payable will be based on the different severity levels covered, and multiple claims are possible with some insurers. You can expect to pay much more to obtain this heightened level of peace of mind - possibly 50% or more - due to the less stringent definitions offered. These plan come as standalone plan or as `add on’ term benefits. Their benefits are typically capped at a lower level since payout is expected to be more frequent. In addition, the coverage period is limited to a maximum age, say 65. Female and Children Related Insurance There is also health insurance cover for female and children-related illnesses that you can take up to enhance you and/or your kids coverage. A female-related illness plan typically covers cancers on female organs and pregnancy complications and a children-related illness plan covers a host of children illnesses, such as severe asthma, Kawasaki Disease and leukemia. Such illnesses may not be life threatening. However with affordable monthly premiums in mere tens of dollars, you can enhance your insurance portfolio to deal with these unexpected events. Getting the Holistic Health Insurance Critical illness insurance underwriting is known to be stringent. Sub-standard health applicants can expect to pay extra premium, have their existing conditions excluded or even have their applications postponed. However, each insurer has her underwriting criteria and the `thresholds’ for certain health conditions. Insurers also place limits, usually SGD 1 million, on the total critical illness coverage allowed for each individual. The limit is either on policies from one single company or aggregated across all insurers. Stacking different plans help to enhance the comprehensiveness of one’s insurance portfolio. A holistic portfolio typically consists of coverage on hospitalisation and surgery, death, disabilities and personal accidents. Each individual is advised to obtain appropriate coverage based on her needs and her commitment to her dependants, not forgetting parents. You may take years to recover from a critical illness before returning to employment - often in a reduced capacity. As such, the potential loss of future income has been commonly used to determine the benefit amount desired. Critical illness cover options exist for a very good reason - plan and protect your future with them.
Posted on: Wed, 27 Nov 2013 14:14:05 +0000
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