Getting a lifetime of health assurance is as easy as protecting you and your family against death, disability, critical illness, and early critical illness conditions.
Let this ultimate guide for critical illness (2023 edition) provide everything you need to know about insurance and critical illness plans that cost you less than a daily coffee!
Critical Illness Fact #1
Only 20% of Singaporeans have critical illness coverage that meets the Life Insurance Association (LIA) Singapore’s recommended level of 3.9 times of annual income.
Source: Life Insurance Association Singapore (LIA)
A follow-up study in 2017 by the Singapore Life Insurance Association (LIA) reveals that an average adult needs S$316,000 of critical illness coverage, but the average working adult only has critical illness coverage of just S$60,000.
The general guideline by LIA recommends critical illness coverage of 3.9 times your annual income. Hence if you earn S$70,000, you should ideally have critical illness coverage of S$273,000.
On top of that, a recurring illness can cost upwards of $200,000 yearly, and over 80% of those that contracted a critical illness regretted not having more coverage.
Do you have sufficient insurance coverage, especially in the event of a late stage or multiple occurrences of critical illness?
Critical Illness Fact #2
The average recovery period for a CI, or until the insured person can return to work, is five years.
Source: Life Insurance Association Singapore (LIA)
By default, your MediShield Life can provide sufficient coverage in case of a medical condition or emergency requiring hospitalisation.
This may include surgical, and other related expenses such as daily ward charges, doctor’s fees, and pre and post-hospitalisation charges up to a specific time frame.
With an upgrade to an Integrated Shield Plan (ISP) and associated rider, treatment in a government ward B and above or even private hospital ward A should not break the bank.
However, your MediShield Life or ISP is not designed to deal with the long-term cost and expenses in the event of a catastrophic or prolonged life-threatening illness.
The average recovery period for a CI or until the insured person can return to work is five years (Life Insurance Association of Singapore). This is where your critical illness plans or coverage ensures that you have sufficient financial support until you are fully recovered.
Fact Or Friction? #1
7 in 10 (72%) Singaporeans have the misconception that critical illness plans are expensive.
Source: Financial preparedness for critical illness ( 2021 AXA Survey by NeilsenIQ)
Surveys on Singaporean’s knowledge of insurance and critical illness planning have uncovered gaps in shortfall, lack of information and misconception.
These survey findings have been primarily conducted via The Nielsen Company (an S&P 500 company), YouGov and other independent third-party info providers.
You do not have to fully address your insurance and critical illness shortfall in a single plan if you have budget constraints.
However, seek advice from a qualified financial advisor to ensure your following insurance plan provides the best match based on these for changes in life events:
Refer to the FAQ for an in-depth analysis of the above.
Your financial advisor should also work with you on your budget and cashflow :
Refer to the FAQ for an in-depth analysis of the above.
Note: The above is not a comprehensive list. You should seek consultation from a qualified advisor to plan for your insurance and critical illness needs.
In Singapore, there are four main categories of insurance plans structured to provide coverage in the event of an illness. Each type of insurance plan in four categories carries features such as high levelled coverage, age-specific coverage multiplier, long-term cash value, investment elements or pre and post-hospitalisation coverage.
No single plan may fulfil your insurance and critical coverage needs. Understand how to combine and select the insurance plans that work best for you and your loved ones.
While the yearly premium cost is lower than other options, a term life insurance plan can cost way more if the coverage is taken for a lifetime or to age 100 since there is no cash or maturity value.
Hence, term protection is ideal for coverage to a specific age, the end of a financial commitment or until the financial independency of a child or close ones.
Get to know how a term insurance plan can cover the gap in your insurance shortfall or be a foundation for your family's critical illness coverage.
Learn more about term life policies or getting no frills coverage from any one of the links below!
Drop us a message if you like us to get back to you on any questions you have on your term life or critical illness planning needs.
While the death and terminal illness coverage of a whole life plan is significantly lower than a term life plan, the same cannot be said for critical and early critical illness coverage. Most whole life plans allow for an age-specific insurance coverage multiper (i.e.: to age 65, 70 or 75), providing very high critical illness coverage when needed.
Over a longer time horizon, a whole life plan builds up a guaranteed cash value that will only increase as the policy ages.
Build a steady cash value in the insurance portfolio while getting covered for all your insurance needs in a single plan.
Learn more about whole life plans or stable financial growth while staying covered from any one of the links below!
Drop us a message if you like us to get back to you on any questions you have on your whole life or critical illness planning needs.
As the saying goes, it is about time in the market and not timing the market. Any form of investment involves various degrees of risk.
An investment link insurance plan works by having the premium you pay going to a portfolio of unit trust funds and deducting a monthly cost for providing insurance coverage to you.
An investment-linked policy allows very high insurance and critical illness coverage for your financial liabilities and life commitments needs with potential long-term investment returns.
Other unique features will include conversion into a no-coverage plan or regular dividend payout portfolio, lump sum cash withdrawal or premium holiday.
You can switch your investment-linked policy to an investment-focused portfolio for higher potential capital growth. Alternatively, switch to an income portfolio to enjoy a regular dividend payout.
Learn more about investment linked policies or accumulating long-term growth while staying covered from any one of the links below!
Drop us a message if you like us to get back to you on any questions you have on your investment linked plan needs.
Getting treatment is the number one priority in the event of a critical illness. While a shield has no cash value and no lump sum payout, you can depend on this plan to cover you for the best treatment upon detecting an illness.
Premiums payable are relatively low and increase with age. Generally, you can sign up or upgrade or downgrade your MediShield Life if there is no existing medical condition.
However, only a downgrade from a higher-tier plan is available once you are diagnosed with a long-term or permanent medical condition.
Upgrade your MediShield Life to be eligible for private hospital ward A, government ward B and the above entitlement.
You can enhance your hospitalisation coverage to cover up to 95% of your hospitalisation plan when you add a rider to your integrated shield plan.
Learn more about hospitalisation and integrated shield plan from any one of the links below!
Drop us a message if you like us to get back to you on any questions you have on your hospitalisation and integrated shield plan needs.
InterestGuru.sg features a collection of the top questions and answers on insurance and critical illness planning based on enquiries by our site users as below.
According to the Life Insurance Association Singapore (LIA), your death and disability coverage should be 10 to 15 times your annual income.
This figure may be higher or lower depending on how many dependants you need to provide for in the event of your demise or inability to generate an income.
For critical illness planning, the general consensus is to have a buffer of 5 to 7 times your annual income. The typical recovery period from a critical illness is 5 years until the critical illness experiencer can return to work.
In the instances of an early critical illness, the recommended coverage is only 3-5 years of your annual income.
Speak to a qualified advisor on coverage for recurrence or multiple critical illness coverage if required.
Getting an insurance plan requires a long-term financial commitment. Consider your current and future life events to ensure that your new critical illness plan fits your long-term goal.
In most situations, early termination or surrendering of your insurance policies will result in a financial or coverage loss.
At the same time, being under-covered may result in you getting another plan at a future date at a higher premium cost (You pay more for the same coverage when you start a plan at a older age.).
A portfolio review ensures that your insurance coverage and financial policies are aligned with your life goals.
At the same time, it ensures that your investment and unit trust are aligned with your risk profile.
This will ensure that your insurance policies are performing according to your long-term health and financial goals.
With the ever-changing financial, geographical and political situations, a portfolio review for your unit trust and other investment-linked plans should be conducted regularly.
Aim to meet or speak to your financial advisor at least once every two years.
This will ensure that your insurance policies are performing according to your long-term health and financial goals.
A portfolio restructuring usually involves combining or surrendering your existing insurance or investment plans.
New policies may be recommended, but any changes must result in an overall net gain towards your portfolio.
A portfolio restructuring must be done with you knowing how it benefits your coverage and/ or your long-term financial goals.
Drop us a message and a MAS (Monetary Authority of Singapore) qualified advisor will be in touch with you.
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Drop us a message if you like us to get back to you with any questions you have on your insurance or critical illness planning needs.
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Check out these quick links for more about planning for your insurance and critical illness coverage needs!
