What is a critical illness (CI) insurance?
As the name suggests, a CI insurance pays a lump sum if you are diagnosed with a critical illness or after having undergone a type of surgery covered by the insurance plan1.
Some use the payout to pay for medical expenses that aren’t covered by their health/hospitalisation insurance or MediShield Life. Others use it to cover non-medical costs related to the illness, such as transportation, childcare or engaging a domestic helper.
CI plans are not meant to replace other health insurance plans. Rather, the CI plan provides you with an additional financial support, to lessen your financial burden so you can focus on your recovery.
Why is a critical illness (CI) insurance necessary?
If you’re lucky, you’ll live the rest of your life without getting seriously ill. But without coverage, just one critical illness can be a massive financial burden for you and your family. Here’s why skipping out on CI insurance is a big mistake.
1. The odds of getting critically ill are high.
Most CI plans in Singapore cover you for 37 critical illnesses. What are the odds of you actually making a claim, especially when you’re young, active, and healthy?
No matter how healthy a lifestyle you live, there’s no telling when critical illness will strike. The National Registry of Diseases Office estimates that 1 in every 4 to 5 Singaporeans have a lifetime risk for developing cancer2. Studies3 have also shown that breast cancer accounts for 1 in 3 cancers among women in Singapore, while 1 in 7 men in Singapore get prostate cancer.
The good news is early detection and better treatments result in higher survival rates. The payout from a CI plan helps you afford ongoing treatments and the related costs that come with recovery.
2. There is a chance of your illness relapsing.
It is definitely not ideal, but also not uncommon for certain illnesses to relapse. Therefore, you can consider getting a critical illness plan that can cover you again when such situation happens. For example, covers for 106 conditions of all stages, from early to intermediate and advanced. Plus, the option to go for the ‘cover me again’ feature, which restarts4 your coverage over and over again and also provides cover for subsequent advanced stage major cancer conditions5, even after you’ve made a claim.
3. There are limits to MediShield Life coverage.
Most Singaporeans think that CI plans aren’t needed as they have MediShield Life. While it can soften the financial blow of hospital stays and medical expenses, there are limits to what government health insurance can cover.
For instance, MediShield Life benefits are designed based on Class B2/C bills, so as to keep premiums affordable6. This means when you choose Class A/B1 wards or private hospitals, your MediShield Life will only be able to cover a small portion of your bill.
When you’re recovering from a serious illness, being unable to afford the full cost of your treatment is the last thing you need. This is where a CI plan becomes useful. The payout can be used to cover the co-pay portion of the medical bill and any excess can be used to make-up for any temporary loss of income to ease the financial burden.
4. Integrated Shield Plan (IP) won’t cover all your expenses.
You can opt for Integrated Shield Plan (IP), provided by private insurers, to add on to your MediShiels Life for additional coverage of bills in Class A/B1 wards or private hospitals6. However, it is important to note that all IPs will still require a minimum of 5% co-payment7.
Also, a CI plan can help to make up for what hospital insurance can’t cover – and not just in terms of medical fees. For example, you can use the payout from a CI plan to make up for lost income, or pay for things like day care for your kids while you recover.
5. Your savings won’t last long in the wake of a critical illness.
Critical illnesses are more expensive than the average medical emergency, and not just because there’s more treatment involved. These diseases often leave you with impairments that restrict your mobility and require long-term rehabilitation.
A stroke, for example, requires costly surgical procedures to help you return to your daily life. But even after surgery, you may find it difficult to walk or do basic routines like showering or dressing yourself8. Stroke rehabilitation includes working with speech, physical and occupational therapists9 which are all additional costs.
Another cost to consider is the loss of income if you take time off work to recover, or are unable to return to work. Not only will you have difficulty paying your medical bills; you might be unable to take care of your living expenses or your family’s needs.
Realistically speaking, your savings alone might not be able to keep up with all the long-term costs related to a critical illness.
The real value of a CI plan comes from its flexibility. Unlike health insurance, you’re free to use the CI payout for expenses beyond medical treatment. Whether it’s paying for household bills or long-term rehabilitation fees, a CI plan lets you take care of your financial obligations so you can focus on recovering.
6. Critical illness plans are affordable – especially while you’re young.
It seems strange to get a CI plan while you’re young, healthy, and have no immediate need for it. However, getting a CI plan is trickier once you’ve been diagnosed by a health condition. So, it is advisable to get a CI plan while you’re healthy.
7. Critical illness plans are designed to meet your needs.
The great thing about CI plans is that they’re not a one-size-fits-all product. We can help you find a CI plan that suits your needs and your budget. Speak to a Manulife Financial Consultant to find out more about how a CI plan can protect you.
Worried that you will not be able to get a critical illness plan given your age or existing health conditions?
The products are underwritten by Manulife (Singapore) Pte. Ltd. (Reg. No. 19802116D). This advertisement has not been reviewed by the Monetary Authority of Singapore. Buying health insurance products that are unsuitable for you may affect your ability to finance your future healthcare needs. This material is for your information only and does not consider your specific investment objectives, financial situation or needs. It is not a contract of insurance and is not intended as an offer or recommendation to purchase the plan. You can find the full terms and conditions, details, and exclusions for the mentioned insurance product(s) in the policy contract. If there are any differences between the English and Chinese versions of this material, the English version will apply. This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the LIA or SDIC websites (www.lia.org.sg or www.sdic.org.sg).
We recommend that you seek advice from a Manulife Financial Consultant or our Appointed Distributors before making a commitment to purchase a policy.
Information is correct as at 5 July 2022.