With more than basic critical illness plans being offered, some factors to consider before signing up
The importance of insurance against critical illnesses cannot be over-emphasised, as it provides the insured with a lump-sum payment upon the diagnosis of medical conditions covered by the policy.
The payout can be a form of income replacement, or it could come in handy when the patient is faced with hefty medical expenses.
However, consumers may be fazed when faced with one too many choices as insurers are rolling out many different variations of these policies.
The most basic, and traditional, type of critical illness plan is payable only for advanced stages of a critical illness, and only one claim is allowed. Most insurers also cover 30 basic illnesses, such as cancer, coronary disease and stroke.
But increasingly, insurers are offering different types of plans above and beyond these vanilla products.
For example, dengue haemorrhagic fever and severe rheumatoid arthritis are included under HSBC Insurance’s latest Early Critical Care plan. These are not usually covered in traditional critical illness plans.
Generally, the vanilla plans also get terminated after the insured claims the full 100 per cent of the sum assured under the plan.
But the AIA Complete Critical Cover does not terminate after 100 per cent of the insured amount upon the diagnosis of a major critical illness has been paid out.
Instead, AIA will provide continued coverage (subject to conditions) with the same sum assured.
So for example, you make a claim against the policy upon diagnosis of a critical illness. Should your condition deteriorate, you may make further claims up to 200 per cent of the insured amount.
Similarly, Prudential’s PruMultiple Crisis Cover allows customers to continue with critical illness coverage for a different critical illness even if a claim has been made.
Another plan, the Great Eastern Early-Payout CriticalCare Plus, provides additional coverage against diabetic complications and cancer recovery.
A Prudential Singapore spokesman said: “The key reason for insurance providers to come up with new critical illness plans is that we recognise there are gaps in terms of existing coverage.”
Given the wide array of choices on the market, it is vital that consumers separate the wheat from the chaff when they consider critical illness coverage for themselves and their loved ones.
The factors to consider before taking up a critical illness plan would be:
At which stage of illness would you like your sum assured to be paid out?
Some consumers end up with a rude shock when they realise that they are not eligible for claims unless their illness is considered “critical”, under the traditional plans.
For example, for some plans, cancer has to reach Stage 3 before the policy gives a payout. This may surprise some policyholders who have Stage 1 cancer but may not have the financial means to pay for the medical bills.
What illnesses are covered under the plan?
Sometimes, the illnesses covered under the policy have a very specific definition. Read the fine print to ensure that you are adequately covered.
Is there long-term cover beyond the age of 75?
The incidence of critical illnesses tends to increase with age, and you do not want to find yourself without medical insurance when you are retired and most in need of the payouts.
Find out if your plan has guaranteed renewability, or if price premiums increase significantly with age.