Critical illness insurance is often overlooked as people believe that their current healthcare plan is sufficient for any situation. Of course, simple healthcare insurance can be adequate, given that we have Medisave and can purchase Medishield coverage using our Medisave. However, what if the medical fees go beyond what your healthcare policy covers? Rehabilitative costs and high treatment costs will put a strain on your finances.
Do You Need One?
It depends. There are many individuals that do not have a critical illness plan and there is a fair chance that they will never need it. If you are a wealthy individual who can afford the cost of treating critical illnesses, you will be fine without one.
If you wish to have a peace of mind, getting a simple and affordable critical illness plan will be good enough. For example, FWD offers Big 3 Critical Illness Insurance which covers the 3 main illnesses: cancer, heart attack and stroke. Since 90% of the critical illness claims come from these 3 conditions, FWD Big 3 will be a sufficient plan at an affordable premium.
What About Disability Income Insurance?
In some situations, it may be wise to consider getting disability income insurance. A sole breadwinner with a family to feed will benefit more from getting disability income insurance. Critical illness benefits individuals who do not have financial dependants and removes the immediate headache of dealing with expensive medical bills.
However, before deciding one over another, here are some caveats. Disability income insurance will not pay out if you can return back to work. For some disability income insurance, if you are unable to prove that you cannot perform some daily activities, you will not receive the payout. Also, the lump sum payout is not high, thus the immediate financial burden of the treatment cost may not be alleviated.
For an individual who has dependants and financial security is of utmost importance, consider getting both. Else, think about what you really need and purchase mindfully.
What to Look Out For?
If you know that your family has a history of a certain critical illness or you have some underlying medical condition, it will be wise to purchase critical illness insurance. If you are worried that going for a health checkup may raise unnecessary alarms, find a critical illness insurance that does not require a health checkup and only a simple health declaration.
Waiting and Survival Period
Most critical illness insurance have a waiting period. This can last between 30 days to 90 days or more. What this means is that policyholders will not be able to make a claim within that period of time. This is a safeguard for the policies in the event an individual purchases the plan right after getting knowledge of their illness to reap the benefits of the claim.
The survival period refers to the period of time you need to survive before you can make the critical illness claims. This can range from 7 to 30 days in most situations. Finding a plan with a low survival period will be better in the event that the critical illness is serious and the probability of death is high.
It is important to check the coverage of the policy and ensure the coverage is what you need. Furthermore, it is also important to check what is the coverage for early stages, like early-stage cancer. Should you need coverage for early stages of critical illness, consider getting an early-stage rider.
How to Choose?
Before buying critical illness insurance, it is important to note what is your life situation and what you need now. Perhaps after some consideration, getting a disability income insurance, or even having both will be a better choice. Make sure to read the terms and conditions carefully. Items like a waiting period, survival period and early-stage coverage are important to take note of.