Types of Critical Illness Singaporeans Should Know and How to Be Protected
In this article
The cost of healthcare in Singapore has been steadily on the rise in recent years. Costs for the treatment of critical illnesses such as breast cancer and prostate cancer — two of the most common cancers in Singapore — have also increased. With 44 Singaporeans being diagnosed with cancer every day, critical illness is definitely something that could happen to any of us at any point in our lives.
While Singaporeans may have MediSave and MediShield Life to pay for healthcare costs, both are often insufficient to fully address your healthcare needs — especially when it comes to critical illnesses. It is precisely for this reason that you need to invest in ways to financially protect yourself against them. In this article, we’ll show you how.
What is a critical illness?
Critical illness (CI) is sometimes also referred to as dread disease or terminal illness (for end stage disease), depending on the insurer. These include major cancer, stroke with permanent neurological deficit and heart attack of specified severity. In 2019, the Life Insurance Association Singapore (LIA Singapore) released new definitions for critical illnesses, last updated on 16 November 2022. Here are the 37 critical illnesses covered under CI insurance as per LIA:
List of 37 Critical Illnesses
|
1. Major Cancer |
19. Alzheimer’s Disease / Severe Dementia |
Key changes in the definitions to keep in mind include:
- More exclusions for benign brain tumour, coma, stroke, aplastic anaemia, heart attack, major cancers, and other diseases
- Stricter requirements for making claims (e.g. Viral encephalitis and poliomyelitis now all require diagnostic tests.)
- “Major Cancers” has been revised to “Major Cancer” and cannot be diagnosed based on the presence of tumour cells and/or tumour-associated molecules in saliva, blood, feces, urine, or any other bodily fluids
- “Heart Attack of Specified Severity” has been redefined to “Death of heart muscle due to ischaemia”
- “Stroke” has been revised to “Stroke with Permanent Neurological Deficit”
- “Kidney Failure” has been revised to “End Stage Kidney Failure”
- “Parkinson’s Disease” has been revised to “Idiopathic Parkinson’s Disease”
- “Surgery to Aorta” has been revised to “Open Chest Surgery to Aorta”
- Those suffering from Haemophilia and Thalassaemia Major can now be covered under the HIV CI condition
- “Apallic Syndrome” has been revised to “Persistent Vegetative State”
- “Viral Encephalitis” has been revised to “Severe Encephalitis” and includes all causes of encephalitis, not just viral
- The word “irreversible” has been added to deafness, blindness, aplastic anaemia, and paralysis
These changes essentially make the existing definitions tighter and more specific, which hopefully result in less ambiguity when it comes to making claims. Policyholders with existing critical illness plans bought before 26 August 2020 are not impacted by the new definitions.
How to Protect Yourself with Insurance
If you have CI insurance, you get a lump sum when you are diagnosed with an illness that is covered by the policy, providing you financial support as you take care of your health. However, there are a number of important things to note about CI insurance:
- Benefits are only paid if the illness meets the definition stated in the policy (thus, the importance of the new definitions provided by LIA)
- The lump sum does not depend on your medical expenses
- You may have to wait for certain types of illnesses or surgeries. If you suffered any symptoms of, had investigations for or any illness is diagnosed during the waiting period, your benefits may be forfeited
The goal of insurance is to help shield you and your family from the financial fallout of you not being able to work due to your illness. It also helps cover the extra costs that come with critical illnesses that usually aren’t covered by your existing health insurance.
Coverage
CI insurance is a little more complex than other types of insurance. As far as coverage is concerned, different insurers may offer varying levels of coverage based on the number of critical illnesses, the type of critical illness, and the stage of critical illness covered.
One of the best ways to understand what is covered under CI insurance is to look at LIA’s critical illness framework with the latest definitions for the 37 industry-accepted critical illnesses. Do note that not all insurers will cover all 37 critical illnesses.
One good example of a critical illness plan is Income Insurance’s Star Secure Pro, a whole life insurance plan that covers critical illness and much more. With the Advanced Life Accelerator rider, you’re provided with comprehensive coverage against 56 dread diseases1 (also known as critical illnesses).
One of the best perks of this plan is that, with the Major Impact Benefit2, you’re also covered against future unknown diseases3 as well as if you undergo a surgery or suffer from an infection and you need to stay in an intensive care unit (ICU) for 5 days or more at a go (only valid before the policy anniversary immediately after the insured reaches the age of 85).
Star Secure Pro also offers a minimum protection value4,5 of up to 500% of your sum assured up to age 75 or 80 for coverage against death, terminal illness, and total and permanent disability.
Furthermore, you can also add on Early Life Accelerator which for extra protection against catastrophic cancer such as leukaemia, lymphoma and stage 4 malignant tumour which requires you to undergo cell, tissue and gene therapy6.
Another plan to consider is Complete Cancer Care which protects against early, intermediate and advanced7 stage major cancer. You can choose between 2 lump sum payout options, Care 50 or Care 100, under the Major Cancer benefit8, and set your mind at ease knowing that your future premiums will be waived9 for a specified period up to the end of the policy term upon diagnosis of major cancer. Furthermore, receive monthly payout of up to 1% of the sum assured for up to 24 months10 to support the costs of cancer treatment with the Monthly Cancer Therapy Benefit, which provides comprehensive coverage for cell, tissue or gene therapy, chemotherapy, hormonal therapy, immunotherapy, radiotherapy and targeted therapy.
It will be more challenging to purchase another life insurance plan after a cancer diagnosis. With Complete Cancer Care’s guaranteed post-cancer cover option, which is the first in Singapore, you can choose to purchase a new term plan11 offered under this benefit to get coverage for death, terminal illness and total and permanent disability (TPD) upon diagnosis of advanced stage major cancer.
Is insurance necessary?
When you’re young and healthy, insurance for critical illness may seem like the furthest thing from your mind. You may think that you can always rely on MediSave and MediShield Life with an integrated shield plan, right? Well, with critical illnesses, that’s not the case.
Critical illnesses come with many expenses that go beyond hospital stays and surgery, and beyond what the above mentioned plans can cover which is why they also represent additional insurance premiums.
To make an informed decision, here are some pros and cons to take into consideration:
PROS
- It pays out a lump sum.
- The payout is tax-free.
- Some plans combine it with life insurance protection.
- It offers coverage where MediSave and MediShield Life can’t.
- It is more affordable the younger you are at the point of application.
CONS
- It can be complex and involve a lot of medical jargon. Policies vary from one another and not all illnesses are covered. Coverage also varies with each policy. You’ll likely require guidance from an advisor.
- It’s age restricted so the older you are, the higher the premiums.
With healthcare costs in Singapore constantly on the rise, a critical illness is the last thing you want to have to deal with. You will not know when you might be struck with a critical illness. This is why it’s important to familiarise yourself with critical illnesses and protect yourself and your family with a robust CI plan like Star Secure Pro that will help alleviate the financial burdens that come with critical illnesses.
1 Any payment under this rider will form an accelerated payment, and reduce the sum assured and any bonuses of this rider, its basic policy and other accelerated riders by the same amount that we pay under this rider. We will not pay the dread disease benefit if the insured is diagnosed with the disease within 90 days from the cover start date for major cancer, heart attack of specified severity, coronary artery by-pass surgery, angioplasty and other invasive treatment for coronary artery or other serious coronary artery disease. For angioplasty and other invasive treatment for coronary artery we will pay higher of 10% of this rider’s sum assured and corresponding pro-rated bonuses of the basic policy or 10% of the rider’s minimum protection value (when MPV applies), subject to a S$25,000 (not including bonus). Please refer to the policy conditions for further details.
2 We will pay no more than $100,000 (not including bonuses) for each insured (no matter how many policies we have issued to cover each insured). The surgery or infection and the stay in the ICU must be directly due to the same cause and confirmed as necessary medical treatment. This benefit is not payable if your claim arise from the insured suffering symptoms of, had investigations for, or was diagnosed with illness any time before or within 90 days from the cover start date (except for accident). Claim under the Major Impact Benefit will reduce the sum assured and any bonuses of this rider, its basic policy and other accelerated riders of its basic policy by the same amount that we pay under this rider. This benefit can only be claimed once. Please refer to the policy conditions for further details.
3 An event (including a future unknown disease) leading to a surgery or an infection, and requires a stay in ICU for 5 days or more in one hospital admission, which is claimable under the Major Impact Benefit, subject to policy’s terms, conditions and exclusions.
4 Minimum protection value means a percentage of the sum assured shown in the policy schedule. The minimum protection value is applicable before the anniversary immediately after the insured reaches the age of 75 or age of 80. The applicable age will be based on the option selected by you as shown in the policy schedule. You cannot change the minimum protection value and its applicable age which you chose at the start of the policy.
5 Star Secure Pro includes a non-participating compulsory rider, Star Secure Pro – Protection Benefit. This rider pays accidental death benefit, Retrenchment Benefit, Family Waiver Benefit, and part of the minimum protection value. Please refer to the policy conditions for further details.
6 We will only pay this benefit if the insured is diagnosed with catastrophic cancer which require the insured to undergo cell, tissue and gene therapy. For policies we have issued that have Special Therapy Benefit, we will pay no more than S$50,000 (excluding bonuses) for each insured (no matter how many policies we have issued to cover each insured). We will not pay this benefit if the insured suffered symptoms of, was investigated for, or was diagnosed with the disease any time before or within 90 days from the cover start date. We will only pay this benefit if the basic policy has not ended.
7 The definitions for early, intermediate and advanced stage major cancer are found in the policy conditions.
8 If the insured is diagnosed with an early, intermediate or advanced stage major cancer by a specialist during the term of the policy, Income will pay the Major Cancer Benefit according to the selected option. The total payout of this benefit will not exceed 100% of the sum assured. The option must be selected at policy inception and cannot be changed. Income will not pay this benefit if the insured suffered symptoms of, had investigations for, or was diagnosed with, any stage of major cancer any time before or within 90 days from the cover start date.
- If the policyholder selected Care 50, any payment made for early or intermediate stage Major Cancer Benefit will reduce any payout for advanced stage by the same amount that Income pays for the early or intermediate stage. The early or intermediate stage Major Cancer Benefit can only be claimed once. This benefit will end when Income makes payment for advanced stage major cancer. The policy will continue to apply even if this benefit ends.
- If the policyholder selected Care 100, this benefit will end when Income makes payment for any of the 3 stages of major cancer. The policy will continue even if this benefit ends.
9 Income will pay the Premium Waiver Benefit according to your selected option under the Major Cancer Benefit.
- If the policyholder selected Care 50, upon diagnosis of early or intermediate stage major cancer, Income will waive the premiums up to 60 months or end of policy term, whichever is earlier, and the policyholder will have to pay premiums thereafter. This benefit for early or intermediate stage major cancer can only be claimed once. Income will waive the premiums until the end of policy term upon diagnosis of advanced stage major cancer.
- If the policyholder selected Care 100, Income will waive the premiums until the end of policy term upon diagnosis of any stage of major cancer.
The premium waiver will start from the policy month immediately after the diagnosis date of the major cancer. The policy will continue to apply for the remaining unclaimed benefits during this premium waiver period even though the policyholder is not paying the premiums. Income will not pay this benefit if the insured suffered symptoms of, had investigations for, or was diagnosed with, any stage of major cancer any time before or within 90 days from the cover start date.
10Income will pay a Monthly Cancer Therapy Benefit as long as the insured is diagnosed with major cancer by a specialist and recommended in writing that the treatment is a necessary medical treatment for cancer according to relevant guidelines from Ministry of Health (MOH) and has started cancer treatment as advised by a specialist. Income will make the first payment starting from the policy month immediately after the cancer treatment start date. For more details on the types of cancer treatment, please refer to the policy conditions. The maximum amount Income will pay for this benefit is $60,000 per life. Income will not pay more than a total number of 12 payouts for early or intermediate stage major cancer. If the insured has already received payouts during early stage, there will not be further payouts during intermediate stage. The sum of the total number of payouts for this benefit will not exceed 24 payouts. The number of payouts for the advanced stage major cancer will be 24 less the number of payouts Income have paid for the early or intermediate stage major cancer under this benefit. Income will not pay this benefit if the insured suffered symptoms of, had investigations for, or was diagnosed with, any stage of major cancer any time before or within 90 days from the cover start date. Please refer to the policy conditions for further details.
11 Upon diagnosis with advanced stage major cancer, the insured may choose to take up a new term policy with only death, terminal illness and total and permanent disability (TPD) benefits on the insured own life, without Income having to assess their health. The waiting period of the new term policy is 2 years. If the insured makes a claim on the new term policy during the 2 years of waiting period, Income will refund 100% of the premiums paid on the term policy issued under this option.
The sum assured for the new term policy will be limited to:
- 100% of the sum assured for this policy; or
- $200,000 per life
aggregating policies issued under the guaranteed post-cancer cover option, whichever is lower.
Income will decide the type of new policy to be offered and the insured must meet all the following conditions to take up this option:
- The insured must take up this option within 6 months from the date of claim admittance of the advanced stage major cancer benefit.
- The insured must not be totally and permanently disabled, terminally ill or be diagnosed with an advanced-stage dread disease other than major cancer, at the time of taking up this option.
- The insured must be 60 years old last birthday or under at the time of taking up this option.
This article is meant purely for informational purposes and should not be relied upon as financial advice. The precise terms, conditions and exclusions of any Income products mentioned are specified in their respective policy contracts. For customised advice to suit your specific needs, consult an Income insurance advisor. This advertisement has not been reviewed by the Monetary Authority of Singapore.
These policies are protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact Income or visit the GIA/LIA or SDIC websites (www.gia.org.sg or www.lia.org.sg or www.sdic.org. sg).
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