Critical Illness Coverage: 3 things you should know about it

Critical illness Coverage: 3 things you should know about it

It is one of the most commonly discussed insurance policies discussed and sold without knowing what is covered. In short, it is an income replacement policy when you are diagnosed with any of the 37 critical illnesses providing you a lump sum of money.  This is also one important aspect of retirement planning as you do not want to have your retirement fund wiped out due to illness.

Having the right amount of critical illness coverage is part of how to plan for retirement in Singapore as you want to have the right resources allocation properly as insurance is one of the worst tools for wealth accumulation. 

Read: How much should my emergency funds be?

 

3 things you should know

1. Why I need Critical illness coverage?

Hospital plan (Shield plans) take care of hospital bills, critical illness policies take care of daily expenses.

Going through treatment for Critical illness (eg: cancer treatment) and it is likely in this case that you’d be able to work. If you’re the sole breadwinner in the family, what happens then? 

2. How much of Critical illness coverage is enough?

Ah, indeed it is a classic question. The answer: it depends on how long the treatment as that is the period to replacement the income. 

3. Are the 37 critical illness covered the same thing if I have existing policies from other companies?

Revised of Standard definitions for 37 common Critical illness(CI) have been updated by Life Insurance Association Singapore (LIA Singapore). CI products using preceding definitions will no longer be sold from 1 February 2015. Meaning if your policies were bought before 2015 there might be a chance that the definitions of the Critical illness might be different. 

If you are unsure what you have currently in the portfolio or want to know how much coverage is sufficient for you. I’m more than happy to speak with you! Just do me a favour and fill out the form below, so that I may get in touch with you:

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