What Type of Critical Illness Plan do you have?

Many people in Singapore are only covered for hospitalisation and have critical illness plans that covers only late stage. Are you one of them?

Critical Illness plans have seen an increased in demand and interests as our society becomes more educated. Given the rising medical costs in Singapore as well as an increase in the number of people contracting critical illnesses, it's no wonder more and more people are getting concerned with their critical illness coverage. To touch on this topic, there's 3 areas I wish to cover.

1. The purpose of a critical illness plan

2. Why a hospitalisation plan is insufficient

3. The Critical Illness Plan landscape today

Purpose of a Critical Illness Plan

Most people overlook the need for Critical Illness coverage to cover their loss of income, on-going expenses and even recurrences or relapse from their illness. They also discount the potential increase in living expenses should they choose to alter their diet and take more organic food or supplements. Essentially, having a critical illness plan allows people to get a payout that potentially cover their living expenses and even lifestyle changes when they are recovering. The last thing you want is worrying about not having sufficient money to pay bills while you have a major illness to combat. (whether the payout is sufficient depends on the sum assured you chose)

Why Only Having A Hospitalisation Plan is Insufficient

A hospitalisation plan only covers the medical bills as incurred assuming you bought the main plan and rider. It does not give you any payout. A lot of people assume that buying a hospitalisation plan equals the all and be all for insurance protection coverage. When I started out in insurance, I always recall people saying "have already" when approached for protection planning and very often all they have is a hospitalisation plan. The assumption is that a hospitalisation plan covers all sorts of travesty that can befall them. I want to say it covers a portion but not everything. Basically if you only have a hospitalisation plan, every day you rest at home after discharge, there's no money to cover your living expenses, supplements, change in diet (if any), or potential loss of income.

The Critical Illness Landscape Today

There was a time in the past where traditional critical illness plans only cover ADVANCED STAGE critical illness. This is also why at one point there's a rise in skepticism in insurance because people complain that they bought plans which they cannot claim when diagnosed with early stage critical illness. There's also probably a lack of emphasis on what is claimable on the part of the financial consultants. In more recent years, early stage critical illness plans were introduced but the catch is, you can only claim once. The irony happens because usually a person has a very low chance to get protection plans at standard terms and that's when they need more coverage because the body is weaker and more susceptible to other illnesses. Even more recently, critical illness plans have evolved further and now plans exists where people can make multiple claims for critical illnesses. This solves the problem of being devoid of coverage after making a single claim.

If you are unsure if your existing plan covers early stage critical illness or even allows you to make multiple claims, please check with your trusted adviser. You can also reach out to me using the message board under "Let's Talk" if you prefer a hassle free comparison with multiple insurers' plans.

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Disclaimer: The content created are based on my personal opinions and may not be representative to everyone or any organisation. If you have any doubts or queries pertaining to insurance or investment, please seek professional advice from a trusted adviser in an official setting. You may also reach out to me if you do not have a present adviser using the message box under 'Let's Talk'.