We always think that critical illness only happens to other people, but unfortunately that’s not the case, and sometimes the diagnosis can be serious – cancer, kidney failure or a debilitating immune disease, for example. Just to cheer you up even more… treatment for these types of conditions is often lengthy and expensive, affecting quality of life and preventing us from continuing work for a while. Whether that work is being the breadwinner or keeping the family together at home, it can put a massive financial, as well as an emotional toll on the family. Not all health insurance covers all the costs involved, particularly if you have a family history of these conditions, or unpaid medical leave, but there’s a special insurance to help you cope. The team at Expat Insurance gives us the lowdown on critical illness insurance.
What is critical illness insurance?
It’s an add-on or “rider” that can be taken up on top of an existing life insurance policy. If you come down with an illness, you’ll receive payouts to cover your medical bills and to keep you afloat.
Why is it so important?
Treatment for critical illnesses is expensive! While management of the illness is generally already covered under most health insurance policies in Singapore, this does not account for the loss of income while you undergo treatment and recovery. Managing and recovering from cancer can be a lengthy process. Firstly, there are the therapies to consider, sometimes in addition to surgery. Then there is the cost of diagnostic testing, rehabilitation, monitoring and ongoing follow-ups to the doctor until you’re in the clear and back to your healthy self. These costs can very quickly add up and could become a significant financial burden if there have been no plans made to accommodate them.
Also, if you’re living overseas, you don’t have the same opportunity to call upon the help of friends and family. The lack of these support networks is an often overlooked factor. You may end up spending more money getting a helping hand than if you were back home.
What are the different types of cover?
There are basically two kinds of cover – critical illness (which only pays a lump sum) and multi-pay coverage (which will pay a lump sum but also additional payouts). Which one is best for your family will depend on your family history, medical coverage and your ability to financially weather recovery and treatment costs. For critical illness cover, as the name suggests, a lump sum will be paid out when you are diagnosed as having advanced stage illness (for example in case of cancer, stage 3 onwards).
Families with histories of critical illnesses or those who lack ample emergency savings should consider multi-stage/multi-pay coverage. There are several types of multi-pay options but they often pay out multiples times for example, if a cancer is treated and reappears. Depending on the policy, you can usually access your cover before it reaches the critical stages.
Who needs critical illness insurance?
Everyone! Regardless of whether you are young or old, single or with dependents. A good rule of thumb is that if you have others who rely on you financially or practically, then critical illness cover is a must. If you were hospitalised tomorrow, how would your family cope? It’s important to make adequate plans, so if it does happen, the people you’re responsible for and love the most will have one less thing to worry about.
Read more on our health and fitness section.