At least 36 people are diagnosed with cancer every day in Singapore yet Singapore still has an 80% critical illness protection gap.

Today we discuss one of the most highly pushed insurance products in the market today, Early Critical Illness Insurance or ECI plans. ECI plans payout regardless of medical costs, hospitalisation treatment fees and medical costs incurred as long as they fall into the life insurer’s critical illness definitions.

You might be interested in the Life Insurance Association’s (LIA) changes to the definitions of critical illness after 26 August 2020.

Early Stage Critical Illness plans are not substitutes for a life insurance plan. Rather, they help you to cope with living and hefty health expenses during the crucial recovery duration of an illness. “Die can, sick cannot” might just become a myth owing to ECI coverage as it alleviates costs and liabilities associated with a critical illness in those crucial initial years following an unfortunate diagnosis. Here are the top 3 reasons why we encourage you to explore Early CI coverage.

1. Recovery and Income Replacement

According to AIA Health Matters Survey in 2016, the average recovery time for critical illness is 3.5 years. Although chemotherapy and other cancer treatment costs would be covered by your Integrated Shield Plans, the payout supplements medical treatment you may seek from abroad – should you wish. But fundamentally, the lump-sum payout helps you to take care of your most crucial day to day expenses which include but are not limited to:

  • Household bills
  • School fees
  • Mortgage loan
  • Car instalments
  • Daily living expenses
  • Supporting dependants

2. Relapse and Insurance Repurchase

Upon remission of a critical illness (hopefully), there still remains the risk of recurrence or the diagnosis of an entirely different critical illness. A heart-illness may subsequently require coronary bypass surgery, for example. Even possibly the diagnosis of an unrelated major stage cancer or onset of Alzheimer’s Disease at a later stage of life. Upon diagnosis of any critical illness, the individual is often barred from purchasing life and health insurance products (critical illness plans included). This is due to pre-existing conditions which render the person uninsurable to the insurer.

A solution to these problems mentioned above would be a multi-pay critical illness plan such as AIA’s Power Critical Cover or Beyond Critical Care which resets to the original 100% coverage amount after 12 months. This allows the policyholder to continue enjoying critical illness coverage even after being diagnosed with CI as the policy remains in force. The coverage also repeats in the event of relapse should the policyholder suffer from the same critical illness, once 24 months has passed from the last claim

3. Likelihood of Claim

Truth be told, critical illnesses is ridiculously common and we would know a family member or friend who has been diagnosed at some point. This explains the relatively costly premiums. Some critical illness plans such as AIA Power Critical Cover insures against both death and multiple illnesses. If a person is unfortunately diagnosed with multiple illnesses over his life, it allows him to claim up to five times for separate illnesses and even has a cash value in the event that no claims are made.

Source: AIA Power Critical Cover Brochure

The peace of mind that ensues knowing one’s finances is not in a complete mess with the payout during an emotionally and physically draining critical illness recovery is why more ought to consider incorporating ECI plans in their risk-mitigation/insurance portfolios.

We hope this article sheds some light on early critical illness insurance and its importance. Millennial Finance’s process begins with reviewing your financial circumstances, concerns and goals before recommending a suitable plan for you. Contact us today to schedule an appointment. 

Something about this article that was not clear or do you have a question pertaining to critical illness insurance? Let us know below or drop us a message.

References:

AIA Survey uncovers 3 gaps in critical illness coverage here:
https://www.straitstimes.com/singapore/aia-survey-uncovers-3-gaps-in-critical-illness-coverage-here

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