Do You Really Need Critical Illness Insurance? Here Are 4 Reasons Why You Probably Do

When you’re young and healthy, it’s easy to think that you’ll always stay that way. While that might be the case if you’re lucky, critical illnesses are becoming ever more prevalent amongst Singaporeans. Did you know that cancer accounts for 1 in 3 deaths in the total population, and is by far the top cause of death in Singapore?

In the unfortunate event of a critical illness diagnosis, critical illness (CI) insurance will be your biggest helping hand. It can cover your treatment costs, loss of income, and much more, allowing you to focus fully on the process of recovery without the pressure of other unnecessary concerns weighing you down.

Related: How to Pick the Best Critical Illness Insurance Plan in Singapore

Critical Illness Insurance vs Life Insurance

Do you really need critical illness insurance if you already have a life insurance policy? In most cases, yes, you do. Both critical illness and life insurance might seem similar on the surface, but they serve fundamentally different purposes.

Life insurance pays you in the event of the policyholder’s death and is meant to to leave behind a legacy or support loved ones with end-of-life costs. Critical illness insurance, on the other hand, covers treatment-related expenses when the policymaker is diagnosed with a critical illness.

In short, critical illness insurance helps you during your recovery, while life insurance helps support your family after your death. Both of these policies provide coverage under different circumstances, and this is why it’s crucial for you to get both types of coverage to stay protected in any situation.

So, what exactly is the difference between critical illness insurance and health insurance, and are there any other benefits to critical illness coverage?

Here are all the main ways in which critical illness insurance can help you.

1. Critical Illness Insurance Covers Medical Costs

You might be thinking that you already have Medishield Life or an Integrated Shield plan that will help you manage your treatment costs in the event of a critical illness diagnosis. While this may be true, there are gaps in these hospitalisation or health insurance plans that critical illness insurance will cover for you.

Firstly, while hospitalisation plans like Medishield Life help pay your medical bills, they usually have maximum claim limits. Medishield Life allows claims up to S$150,000 per policy year, but there are specific limits for each category of spend, which might restrict how much you can actually benefit from your health insurance plan. For example, the treatment for late-stage cancer can reach up to S$200,000 annually, which means that you might need to pay as much as S$50,000 out of your own pocket.

With Medishield Life plans, claims are also limited to hospitalisation at B2 or C wards at public hospitals.

Similarly, Integrated Shield plans also always require co-payment by the policyholder for their medical expenses. Trying to find out whether your treatment-related expense is claimable by your health insurance, or worse – trying to find out whether you’ll be able to afford the rest of your medical bill, is the last thing you want to be doing when you’re in the process of recovering.

While critical illness insurance policies don’t usually cover a specific aspect of recovery-related medical expenses, they offer a guaranteed lump-sum payout upon diagnosis that can be used in any way that the policyholder wishes to support their recovery journey.

So, your critical illness insurance can help you pay out the rest of your medical or treatment-related expenses that your health insurance misses out on, making it easier for you to focus on recovery.

Related: Key Moments in Life When You Might Need an Integrated Shield Plan

2. Critical Illness Insurance Can Replace Your Income Upon Diagnosis

One of the main concerns that critically ill patients grapple with is losing their income. Often, critical illness can make it difficult for patients to continue working as they usually would when healthy.

On average, a patient diagnosed with a critical illness takes around five years to recover, but the typical Singaporean between the ages of 20 and 69 years old has a shocking 74% critical illness protection gap between their existing coverage and the total income that they are likely to lose within those five years.

In Singapore, many working adults are also part of the sandwich generation – they are required to care for both their ageing parents and their growing children. This makes it all the more important for Singaporeans to find a way to bolster their loved ones from the effects of a loss in income. This is where critical illness insurance comes in.

While parts of the critical illness insurance’s lump-sum payout received upon diagnosis can be set aside for treatment and recovery costs, this lump sum amount can also be a reassuring source of alternate income and used to support the policyholder’s loved ones during the period of recovery.

Related: The Real Financial Cost of Critical Illnesses in Singapore

3. Critical Illness Insurance is Cheaper When You’re Young

There are a couple of reasons why the best time to get insured for critical illness is when you’re in your 20s or 30s. Most critical illness insurance policies base their premium levels on different factors such as the policyholder’s age, health, lifestyle, and so on. Generally, premiums are much cheaper when you’re younger and healthier.

Often, critical illness insurance policies also exclude coverage for pre-existing medical conditions. This means that if you wait until you’re older and have already developed certain conditions, you won’t be able to get protection for those illnesses, which drastically reduces the value of your policy. In contrast, if you get your critical illness insurance when you’re young, any potential conditions that you might develop later on in life will most likely be automatically covered, which makes your policy much more beneficial.

In fact, if you apply for critical illness insurance when you’re older and possibly already diagnosed with a medical condition, you would have to wait for your application to get processed before you can receive the coverage that you might need immediately.

In the worst-case scenario, you might even get rejected from the policy because of your age or health conditions. All things considered, the best time to get your critical illness insurance of choice is as soon as possible.

Related: What Insurance Plans Should A Fresh Graduate In Singapore Buy?

4. Young Adults Are Increasingly Likely to be Diagnosed With A Critical Illnesses

While it’s true that the chances of getting diagnosed with a critical illness is higher with age, the unfortunate fact is that critical illness diagnoses amongst younger adults have also been on the rise in Singapore.

Recent trends show that the probabilities of stroke amongst the young have been on an upward trend. Diseases like skin cancer, stomach or colon cancer, have also been more commonly diagnosed in the younger population in Singapore.

Most of these illnesses are covered by the average critical illness insurance policy. It might be better to be safe than sorry and get a comprehensive critical illness coverage plan today to protect yourself against the repercussions of any undesirable events in the future.

How Do You Choose the Best Critical Illness Insurance Policy?

Now you know why you should get a critical illness insurance policy, but how do you know which one you should get?

Most critical illness insurance policies in Singapore cover 37 severe stage critical illnesses and offer a lump sum payout if the policyholder is diagnosed with any one of these illnesses.

A critical illness diagnosis is life-changing, but you deserve to focus on recovery. The last thing you should have to worry about is the financial costs that come with a diagnosis, and getting a critical illness insurance plan to complement your other policies might be the best way for you to navigate these expenses.

To learn more about all the different critical illness policies, reach out to our dedicated team and get a quotation today!

Read More:

• What Happens If You Lie About Your Medical History When Buying Critical Illnesses Insurance in Singapore?
• 4 Realistic Lifestyle Changes for a Healthier, Wealthier You
• How to Find the Best Health Insurance
• Guide to Understanding Integrated Shield Plan Riders
• Elevate Your Coverage Game with Hospital Cash Insurance Plans

Cover image source: Unsplash