What is Critical Illness Planning?

Critical Illness Planning is ensuring that the family is still able to survive and continue their lifestyle even in the unfortunate diagnosis of a critical illness. Critical illness insurance pays out a lump sum of money to the life assured if they are diagnosed with a critical illness covered by the policy.

List of Critical Illnesses

  1. Major Cancers
  2. Heart Attack of Specified Severity
  3. Stroke
  4. Coronary Artery By-pass Surgery
  5. Kidney Failure
  6. Aplastic Anaemia
  7. End Stage Lung Disease
  8. End Stage Liver Failure
  9. Coma
  10. Deafness (Loss of Hearing)
  11. Heart Valve Surgery
  12. Loss of Speech
  13. Major Burns
  14. Major Organ / Bone Marrow Transplantation
  15. Multiple Sclerosis
  16. Muscular Dystrophy
  17. Parkinson’s Disease
  18. Surgery to Aorta
  19. Alzheimer’s Disease / Severe Dementia
  20. Fulminant Hepatitis
  21. Motor Neurone Disease
  22. Primary Pulmonary Hypertension
  23. HIV Due to Blood Transfusion and Occupationally Acquired HIV
  24. Benign Brain Tumour
  25. Viral Encephalitis
  26. Bacterial Meningitis
  27. Angioplasty & Other Invasive Treatment For Coronary Artery
  28. Blindness (Loss of Sight)
  29. Major Head Trauma
  30. Paralysis (Loss of Use of Limbs)
  31. Terminal Illness
  32. Progressive Scleroderma
  33. Apallic Syndrome
  34. Systemic Lupus Erythematosus with Lupus Nephritis
  35. Other Serious Coronary Artery Disease
  36. Poliomyelitis
  37. Loss of Independent Existence

 

Depending on the insurer and the type of plan offered (early-stage, advanced stage, or multiple stages), the critical illnesses covered by a policy may differ. Nonetheless, the Life Insurance Association (LIA) Singapore has an industry list of 37 critical illnesses and their standard definitions, which can be found here: https://www.lia.org.sg/media/2160/mu5819-part-2-of-4-_lia-ci-framework-2019_lia-definitions-for-37-cis.pdf

Using Abundant Life Planner’s unique 3 step approach to build your customised and bespoke Financial Home, Critical Illness Planning is one of the Financial Rooms that some may have as well.

Thus, we make use of our 6 Questions Approach to ensure that you are able to rest and recuperate well even upon the unfortunate event of a critical illness.

What are the 6 Questions Answered?

  1. How long am I able to rest before my savings start to deplete?
  2. Will hospitalisation insurance cover all my expenses?
  3. Am I still able to get more coverage in the future?
  4. How much do I need monthly to continue supporting the family?
  5. How many years of income do I want to cover?
  6. My family doesn’t have a history of being diagnosed with critical illness. Aren’t I wasting money in this case?

What happens if I don’t plan?

  1. You May Need to Downsize Your Lifestyle
  2. Renting Out Your Apartment Might Be Necessary
  3. Working Part-Time Might Be a Necessity
  4. Living on Government Support Could Be Your Main Income

Why do I need to plan for critical illnesses?

  1. The possibility of getting diagnosed with critical illness is exceptionally high.*11 Insightful Death Statistics in Singapore (Updated for 2021) (smartwealth.sg), 17 April 2021*11 Insightful Death Statistics in Singapore (Updated for 2021) (smartwealth.sg), 17 April 2021
  2. Hospitalization insurance (Medishield Life or private integrated shield plan) won’t cover all your medical expenses. Most Singaporeans think that CI plans aren’t needed when Medisave and MediShield Life can cover all medical expenses. While these can soften the financial blow of hospital stays and outpatient treatment, there are limits to what government health insurance can cover. For instance, Medisave can cover up to $450 for daily hospitalisation charges, or $300 per day surgery stay5. However, hospitalisation fees can cost more, depending on the hospital and ward class. Anything greater than a B2 or C ward needs to be paid out of pocket. Similarly, a private hospital plan can cover hospitalisation stays and surgeries, and some outpatient treatments like kidney dialysis or chemotherapy. However, critical illnesses require multiple costly treatments, especially during the disease’s early stages. Because there are limits to its coverage, a hospital plan alone can’t cover all tests, treatments, and consultation fees. A CI plan can make up for what hospital insurance can’t cover – and not just in terms of medical fees. Because you’re free to use the pay-out as you wish, a CI plan lets you make up for lost income, or pay for things like day care for your kids while you recover.
  3. A critical illness plan can cover for the loss of income during recovery
  4. Critical illness plans are affordable – especially while you’re young. Getting covered is trickier once you’ve been diagnosed by a health condition. While it’s still possible, you may end up paying higher premiums, or get less coverage that excludes the illness you were diagnosed with.
  5. Critical illness plans are designed to meet your needs.