Why CI insurance is crucial for your planning
Your answer to everything about Critical Illness insurance if you do not have one.
If you think Critical Illness (CI) insurance doesn’t play a part in your financial journey, think again. In this article, we debunk some common misconceptions about CI insurance, which could hold you back from a more financially secure future.
When you’re at the prime of your life juggling your career and a well rounded social life, it’s hard to imagine being stricken by a critical illness that changes everything.
Even as you hear of people around you suddenly developing a critical illness, you may think: Nah, I don’t have a family history of this disease, it won’t happen to me. Why do I even need a critical illness insurance plan? Wouldn’t it make more sense to save the money and invest to hedge against inflation?
The reality may paint a different picture.
According to the Life Insurance Association (LIA) 2017 Protection Gap Study, Singaporean working adults have an average critical illness (CI) coverage of S$59,776, whereas the estimated monthly cost of cancer treatment in Singapore ranges from S$8,000 to S$17,000.
If an emergency such as a critical illness happens, are you financially prepared to handle it?
Imagine wiping out your entire life savings to cover medical expenses simply due to the misfortune of contracting a critical illness. Ask around, and you’ll be appalled at just how common this predicament is and how expensive treatment for critical illnesses can get very quickly.
Not convinced? We dive into a few misconceptions about CI insurance to set the record straight.
1. Is Critical illness (CI) insurance the same as other health insurance plans?
No, they are different.
Integrated Shield plans (IPs), also known as hospitalisation plans, are optional health coverage provided by private insurance companies on top of your MediShield Life coverage. Such plans differ based on the hospital ward and the choice of hospitals you want to stay in.
When you're hospitalised, these plans can help reimburse the majority of your expenses, but of course, you’ll still have to cover the deductibles and co-insurance payments. Deductibles and co insurance payments are taken as out-of-pocket expenses from your personal savings.
Group health insurance is health insurance purchased by employers and offered to their employees. This means that you won’t have any flexibility in choosing the level of coverage that you want, and may be higher or lower than your IP coverage.
Lastly, CI plans give a lump sum payout for the onset of a critical illness as specified in the policy contract. The coverage offered differs across the insurers and you can consider buying a CI plan that covers all stages of CI conditions for comprehensive protection coverage.
The lump-sum you receive can be used to cover the loss of income or pay for the additional medical costs that your hospital plans do not cover, such as deductibles and co-payment.
2. Do I need critical illness insurance even though I’m still young?
Regardless of age, there’s a solid case for everyone to get a CI plan.
If you think that just because you’re young, you won’t get any CI, think again.
CI doesn't discriminate against the young or old. In fact, more young people are getting CI like cancer and stroke. According to the National Registry Of Diseases Office (NRDO), about ¼ of stroke patients in Singapore diagnosed in 2019 are below the age of 60.
The statistics for cancer are pretty sobering as well, with a similar lifetime risk for 1 in 4 (males) and 1 in 5 (females).
As younger folks are likely to be starting out their careers, they may have little or insufficient savings to cover the financial burden of being diagnosed with a critical illness.
Getting your CI coverage sorted when you are young is one of the best things you can do for yourself. Being young and healthy gives you eligibility to purchase a CI plan while any change in your health can potentially make you uninsurable for CI plans.
3. Is Critical illness insurance very expensive?
For a healthy 30-year-old male who’s a non-smoker, premiums for GREAT Critical Cover: Top 3 CIs with the multi-pay Protect Me Again rider are actually S$0.80 per day1 for up to S$100k coverage.
That costs less than a cup of coffee per day.
In exchange, you’ll get peace of mind knowing that a lump sum payment of up to the coverage amount is paid. The CI plan covers early, intermediate and critical stages of cancer, heart attack and stroke.
4. Is my life insurance plan alone enough?
No, it is not.
You may think life insurance is an all-in-one product that provides all-around coverage for any circumstance you're in. Life insurance is intended to give your loved ones financial security once you have passed on. Life insurance covers you for death, Terminal Illness, Total and Permanent Disability and Critical illness.
However, depending on your provider, the CI plan may not include all stages of CI coverage. Hence life insurance may not be able to provide you adequate CI coverage that you need.
Another fact - Individuals often underestimate the treatment and medical costs relating to critical illness. To get a realistic estimate on the critical illness coverage you might need, this calculator will be helpful.
Not only are the treatment plans extremely expensive, you may also need to take a sabbatical from work to focus on treatment and recovery. This means that on top of having no income temporarily, you’ll have to fork out a hefty amount for your medical expenses. In some cases, you might also need your family members’ help to be your primary caretaker which may require them to stop work as well.
This is where CI plans come in to bridge the gap in the event of a critical illness diagnosis. The insurance payout gives you peace of mind by covering your medical costs, allowing you to focus on recovering.
Great Eastern’s GREAT Critical Cover Series offers two kinds of CI plans. Depending on your needs, you can choose the level of coverage and the types of CIs that you want to be covered for.
CI insurance plan
GREAT Critical Cover: Top 3 CIs
100% payout for early, intermediate or critical stage of cancer, heart attack and stroke
GREAT Critical Cover: Complete
100% payout for early, intermediate or critical stage of any covered 53 CIs
5. Is it possible to get critical illness more than once?
Unfortunately, it’s definitely possible.
Contrary to popular belief, getting a CI early on in life doesn’t guarantee it won’t happen again down the road. You may think that being diagnosed with a CI is already very unlikely, but did you know that it is possible to be diagnosed with different CIs at different life stages as well?
According to the American Heart Association, research has shown that after having a first stroke, the risk of having a major heart incident (heart attack, heart failure or cardiovascular death) a month later was 25 times higher in women and 23 times higher in men.
Even after a year on, they still had twice the risk of a major cardiac event compared to their peers who did not have a stroke previously. This shows the high possibility of another CI diagnosis after the first episode.
Assuming you spend an average of a few thousand dollars per month for cancer treatment and other related costs, imagine if you need to sustain another cycle when you’re diagnosed with another illness? You may have sufficient savings now, but one episode of CI could potentially wipe out your entire savings.
With this in mind, you can consider the coverage of the GREAT Critical Cover Series depending on your needs and affordability. For example, if you purchase GREAT Critical Cover: Top 3 CIs plan and add on with the Protect Me Again rider, you will be eligible for a 100% lump sum payout for up to three CI episodes including recurring and subsequent episodes of cancer, heart attack or stroke.
Peace of mind with GREAT Critical Cover Series
Want to safeguard your financial security? GREAT Critical Cover Series offers two plans suited to your preference of choice and budget: GREAT
Critical Cover: Top 3 CIs and GREAT Critical Cover: Complete.
GREAT Critical Cover: Top 3 CIs
GREAT Critical Cover: Top 3 CIs protects you against the top three most common CI — for early, intermediate or critical stages of cancer, heart attack or stroke. Once you are diagnosed with any of the three CIs, you will receive a 100% payout of the sum assured3. This is an affordable option to increase your existing coverage against the most common of Critical illnesses.
To protect against recurring CI episodes, there is also the Protect Me Again rider that you can purchase on top of your base plan that covers you for another two more episodes (up to three episodes), for any of these three CIs.
This means the rider provides a second or third lump sum payout of the sum assured4 upon a recurring or new diagnosis of cancer, heart attack or stroke. After the third CI claim, your policy will automatically terminate.
This gives you the peace of mind that you will have access to continued critical illness coverage even after your first CI claim to safeguard your emergency funds so they remain untouched.
On top of this, there is also a compassionate benefit of S$25,000 for all causes of death in the event of death.
Premiums are extremely affordable as well, and start as low as S$0.80 per day1. This includes the Protect Me Again rider which allows you to enjoy continuous coverage for the second or third CI claim made for the diagnosis of the top 3 CIs.
GREAT Critical Cover: Complete
If you are looking for a plan with comprehensive coverage, you can consider the GREAT Critical Cover: Complete. It covers up to 53 different CIs of early, intermediate or critical stage and pays a 100% lump sum if you are diagnosed with any of the listed CI conditions.
Similar to the Top 3 CIs plan you can also add on the Protect Me Again rider that can be purchased on top of your base plan that covers you for another two more episodes (up to three episodes). This means that you will be able to receive a second or third lump sum payout of the sum assured2 upon new CI or subsequent diagnosis of cancer, heart attack, stroke, subsequent open-chest heart valve surgery, subsequent coronary artery bypass surgery or subsequent major organ and bone marrow transplant surgery. After the third CI claim, your policy will automatically terminate.
Though premiums for this plan are more expensive, they are still highly affordable if you’re looking for a more comprehensive cover. If you’re planning on complementing your plan with the rider, premiums payable for both the basic plan and rider start from S$1.70 per day5.
Note that GREAT Critical Cover: Complete and its rider offer premiums that will remain the same as you age. So you may be better off purchasing it at a younger age so you can secure lower premiums for life.
Choose the right CI coverage you need. Protect against Top 3 CIs – Cancer, Heart Attack and Stroke, or complete your coverage against 53 CIs. Sign up and enjoy 10% perpetual discount off your premiums!
1 Annual premiums of S$278.30 for the first year after the 30% first-year discount, is based on a male, 30 years old (age next birthday). The daily rate is based on a 30-year-old, non-smoker with the annual premium of GREAT Critical Cover: Top 3 CIs and Protect Me Again rider for a sum assured of S$100,000, divided by 365 days and rounded off to the nearest 1 decimal place. The annual premium will increase based on the attained age of the life assured, as at each policy anniversary.
2 Please refer to the Product Summary for more details on the benefit terms and conditions.
3 Please refer to the Product Summary for more details on the benefit term and conditions.
4 Coverage restores to 100% after 12 months from the date of diagnosis for the most recently diagnosed critical illness, for a subsequent claim of a different critical illness. Coverage restores to 100% after 24 months from the date of diagnosis of the immediately preceding applicable critical illness for recurrent critical illness. Please refer to the Product Summary for more details on the benefit term and conditions.
5 Annual premiums of S$606.90 for the first year after the 30% first-year discount, is based on a male, 30 years old (age next birthday). The daily rate is based on a 30-year old, non-smoker with the annual
premium of GREAT Critical Cover: Complete and Protect Me Again rider for a sum assured of S$100,000 and policy term of up to age 65, divided by 365 days and rounded off to the nearest 1 decimal place. The annual premium remains level throughout the premium term.
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.
Age stipulated refers to age next birthday (ANB).
As this product has no savings or investment feature, there is no cash value if the policy ends or is terminated prematurely.
You may wish to seek advice from a financial adviser before making a commitment to purchase this product. If you choose not to seek advice from a financial adviser, you should consider whether this product is suitable for you.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
The above is for general information only. It is not a contract of insurance. The precise terms and conditions of these insurance plans are specified in the policy contract.
Protected up to specified limits by SDIC.
Information correct as of 13 October 2022.
Disclosure: This article is written in collaboration with SingSaver.
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