Everything You Need to Know About Critical Illness Insurance

No one plans on getting sick. And while medical insurance can help cover some costs during your recovery, some expenses can go beyond standard medical bills. This could be housing, groceries, or childcare. Even with a regular income coming in, the financial impact of a diagnosis is extremely challenging. 

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This is where critical illness insurance comes in. Here’s a short guide explaining what critical illness insurance is, what it covers, and why it makes sense:

What is Critical Illness Insurance?

Critical illness (CI) insurance is a supplemental health insurance that provides you with a predetermined lump sum cash payment if you’re diagnosed with certain illnesses or disabilities. 

We get it: Critical illnesses are rare, but that doesn’t mean they won’t affect your family. For instance, 1 in 4 people in Singapore are at risk of developing cancer in their lifetime. Moreover, stroke cases have skyrocketed between 2012 and 2022, increasing nearly 50%. 

Critical illness insurance Singapore acts as a safety net, protecting your family from medical debt and covering any necessary costs during your recovery. 

There are no hard-and-fast rules: The insurance benefits can be used toward anything you see fit, from medical bills to groceries to transportation. Pay-outs can also be used to cover:

• Therapy and rehabilitation

• Lost income

• Childcare

• Mortgage payments

What Does Critical Illness Insurance Typically Cover

Now that you know what critical illness insurance is, let’s determine which illnesses are actually covered. The specific list depends on your insurance plan, but the following are typically covered:

• Heart attack

• Stroke

• Kidney failure

• Cancer

• Organ transplant

• Amputation

• Benign brain treatment

• Coma

• Severe burns

• Paralysis

• Progressive diseases

• Infectious diseases

• Dementia

• Deafness

• Blindness

• Multiple sclerosis

• Spinal stroke

• Respiratory failure

• Third-degree burns

The amount of the claim depends largely on the severity of the critical illness. For instance, a cancer diagnosis may not automatically or immediately become eligible for a payout. A cancer needs to have spread or reached a specific level of severity.

You would also have to watch out for any exclusions. For instance, if you have a pre-existing medical condition or an illness that a close family member has been diagnosed with, there is a chance of exclusion.

When Does Critical Illness Insurance Make Sense?

Taking out a critical illness insurance makes sense if:

• Your employer is offering it at a low cost.

• You have a history of health issues.

• You have been suddenly diagnosed with a critical illness.

• You are about to undergo or have undergone major surgery for a critical illness.

Many people think having medical insurance or a savings account is enough. This isn’t the case. 

According to a study by Bankrate, only 44% of adults have enough in their savings to comfortably afford an emergency expense of $1,000 or more. Moreover, a major medical condition can have a far-reaching impact on your finances. Regular expenses like mortgage payments, groceries, child education, and transportation can become difficult to manage. 

Take out critical illness insurance and safeguard your family’s future.