Select your country and language
Singapore
Malaysia
Takaful
Indonesia
Brunei
June 2022

How can critical Illness insurance protect your finances?

Plan your finances smartly and ensure you have sufficient insurance protection to manage the uncertainties of the future.

Published 03/06/2022 | Last Updated 35 days ago

How can critical illness insurance help

Cost of living and healthcare expenses in Singapore

 

Do you know Singapore is World’s 2nd most expensive city to live in1 and is one of the most advanced economies of our time? Living comfortably in Singapore is only possible when you plan your finances smartly and ensure you have sufficient insurance protection to manage the uncertainties of the future.

 

It is estimated that the average cost of living in Singapore for a family of four is around S$6,426 a month2. And this estimate excludes medical emergencies and healthcare treatments in private clinics or class-A hospital treatment plans. Which means if you or any of your family members suffer from any unwarranted medical emergency, you would need surplus finances to pay for the medical costs.

 

Singaporeans and Singapore Permanent Residents (PRs) are covered under the MediShield Life Scheme that provides basic health insurance against large healthcare bills and selected costly outpatient treatments such as dialysis and chemotherapy for cancer. MediShield Life also covers for subsidised treatment in restructured hospitals and pegged at B2/C-type wards.

 

Medisave helps Singaporeans and PRs to set aside part of their income to pay for approved health care expenses and its Withdrawal Limits are set to ensure there is sufficient MediSave funds for basic healthcare needs during old age.

 

So if you choose to seek private medical  treatment in medical emergencies, stay in A or B1 class wards or choose the doctors you prefer; you can consider additional private insurance coverage such as health insurance and Critical Illness insurance to cover these costs.

 

Average life expectancy in Singapore is estimated at 84 years3, and usually most critical illnesses start surfacing after age 55. With the average retirement age at 65, this means for nearly 20 years of your senior years you might depend on your past investments, savings and insurance policies to sustain yourself financially. Given the high healthcare cost in Singapore and the fact that 1 in 4 people may develop cancer in their lifetime3, Critical Illness insurance is considered one of the most crucial insurance decision you will need.

 

Let’s look at how much is the basic healthcare cost4 in Singapore, to understand why having Critical Illness insurance is important.

 

Medical Services

Cost per incident

General Consultation (GP)

$25-50

Specialist Consultation

$40-160

Health Screenings

$25-400

Computed Tomography (CT) Scan

$300-1,000*

Magnetic Resonance Imaging (MRI)

$800-2,000*

Visit to the Accident & Emergency

$120-150

Heart Attack or Stroke

$2,200-33,000 (based on the median hospitalisation bill)

 

These costs can substantially drain your finances, especially in case of critical illnesses. That’s why having Critical Illness insurance acts as a safety net for you and your family’s future that provides financial support in the event of critical illness. 

How does Critical Illness insurance actually work?

 

Critical Illness insurance complements your existing health Insurance plan such as Integrated Shield plans or Hospital & Surgical plans that would support the cost of treatment, hospitalisation, surgery and other pre & post hospitalisation medical expenses in case you are diagnosed with any critical illness. There may be instances where we might be left with high out-of-pocket medical costs6 or instances where we need more time for recovery and are unable to return to work fully.

 

Critical Illness insurance which provides lump sum payout allows you to use the money at your own discretion. It can be used to cover for your rehabilitation expenses, taking care of your family financial needs until you are ready to return to employment, and providing you with peace of mind during your recovery.  

 

How does Critical Illness insurance affect your present and future finances?

Sound financial planning and sufficient insurance protection help you secure your future finances. Buying Critical Illness insurance when you are young and healthy can be a wise financial decision as the premiums are generally lower at the younger age.

 

Finally, the amount of coverage you need for the critical illness protection would also depend on you and your family’s lifestyle and the choice of treatment you would prefer, if you were to get critically unwell. You can refer to the Critical Illness Cover Calculator to estimate the amount of coverage you might need.

 

 

A quick checklist on getting Critical Illness Insurance early:

 

Here are a few key reasons why you may wish to consider inclusion of Critical Illness insurance in your financial investment plans for future:-

 

  • You should buy when you are healthy - the best thing about Critical Illness insurance is that it's all about financial planning and creating a future reserve for medical emergencies, in the event that there is a change or deterioration in your health status.
  • Family history - for people with any family history of critical illnesses like diabetes, heart stroke, cancer, etc., to consider Critical Illness insurance plans to have that financial cushion or greater peace of mind for the family.
  • Number of dependants - If you are a single income earner in the family or if you have young and/or elderly dependants in the family, Critical Illness insurance plans can help supplement the family's daily expenses.
  • Pre and Post-hospitalisation expense coverage - Health Insurance plans coupled with Critical Illness insurance plans can relieve the worry of accumulating financial debt or lack of income.
  • Supports loss of employment income - the assumed recovery5 period for a critical illness is 5 years and you need to be adequately covered to provide for yourself during this time. Cash payouts from the Critical Illness insurance plan will help you replace that lost income so that you and your family have lesser worries about treatment expenses. 

 

Do we need to buy Critical Illness insurance if we already have an Integrated Shield insurance?

 

Integrated Shield plans and its riders only cover surgical and hospitalisation expenses and do not cover the loss of income, longer term medical treatment cost or disability caused by critical illness. Having a Critical Illness insurance provides lump sum payouts to help with both medical and non-medical expenses.  

 

 

Source:

1 The Straits Times, 1 December 2021, Tel Aviv world's most expensive city, Singapore ties for second place with Paris: Survey. https://www.straitstimes.com/world/tel-aviv-worlds-most-expensive-city-singapore-ties-for-second-place-with-paris-survey

 

2 The Straits Times, 8 October 2021, Family of four needs $6,246 a month for basic standard of living in S'pore, says study. https://www.straitstimes.com/singapore/politics/family-of-four-needs-6426-a-month-for-basic-standard-of-living-in-spore-says

 

3 Singapore Cancer Society: Common Types of Cancer https://www.singaporecancersociety.org.sg/learn-about-cancer/cancer-basics/common-types-of-cancer-in-singapore.html

 

4  SMARTWEALTH: 7 Healthcare Cost Statistics in Singapore (2022): How Expensive Is It? https://smartwealth.sg/healthcare-cost-statistics-singapore

 

5 The Strait Times: Working adults have inadequate cover if critical illness strikes, says study https://www.straitstimes.com/business/banking/working-adults-have-inadequate-cover-if-critical-illness-strikes-says-study

 

6 Value Champion, 9 April 2019, Medical Procedures With Exorbitant Out-Of-Pocket Costs. https://www.valuechampion.sg/5-medical-procedures-exorbitant-out-pocket-costs

 

*Channel News Asia, 21 July 2020, Are the more expensive medical scans better, and do you really need them? https://www.channelnewsasia.com/experiences/are-the-more-expensive-medical-scans-better-707226

 

Disclaimer:

 

The information presented is for general information only, and does not have regard to the specific investment objectives, financial situation or particular needs of any particular person.

 

 

 

Medical coverage

Keep your health in check and review if you are financially supported for unexpected medical and hospitalisation costs. Speak with us about supporting your medical costs.

Contact us Learn more