Man pondering if critical illness insurance is necessary in Singapore.

Is Critical Illness insurance necessary?

If you’ve only got a minute:

  • The recommended critical illness (CI) protection is 4 times of your annual income.
  • CI insurance provides a lump sum payout that gives you the flexibility on how you want to use it if you are diagnosed with a CI.
  • The payout helps take care of your finances and loss of income so that you can focus on recovery.

The number of CI cases in Singapore has been increasing in recent years. From 2017-2021, an average of 46 people were diagnosed with cancer and 16 people died of cancer everyday, in Singapore1.

According to the Ministry of Health (MOH), 23.9% of the 26,891 recorded deaths in 2022 was attributed to cancer, the leading cause of death in Singapore. In fact, about 1 in 4 Singaporeans will be diagnosed with a CI in their lifetime.

The Life Insurance Association (LIA) 2022 Protection Gap Study shows that each Singaporean working adult has an average CI protection gap of 74% or S$264,586, suggesting that most do not have enough CI coverage to cover the costs of medical treatment and other CI-related expenses.

To cope with loss of income, medical expenses and other financial burdens during the period of recovery from a CI, the recommended CI protection you should get is 4 times your annual income.

What is Critical Illness insurance?

CI insurance is a type of insurance that provides a lump sum payment if you are diagnosed with a CI.

This lump sum payment can be used to cover a variety of expenses such as:

  • Medical expenses not covered by health insurance: CI insurance can help to cover the costs of medical treatment, such as surgery, chemotherapy, and radiation therapy. It can also help to cover the costs of experimental treatments and treatments.
  • Loss of income: Replace your income if you are unable to work due to a CI so as to ensure that you can continue to meet your financial obligations (mortgage payments, car payments and child care costs)
  • Home modifications: Help to cover the costs of any home modifications that may be necessary if you are disabled as a result of a CI. For example, you may need to install a wheelchair ramp or widen doorways.
  • Travel expenses: Taxi rides, public transportation or airfare and hotel accommodations if you need to seek medical treatment overseas.
  • Childcare/education expenses: Children continue to receive the care and support that they need.
  • Funeral expenses: CI insurance can help to cover the costs of funeral expenses, such as burial costs and funeral services.

CI insurance typically insures you for the risk of developing any of the 37 specified CI defined by the LIA, such as major cancer, heart attack and stroke.

Industry list of all 37 critical illnesses
1. Major Cancer 20. Fulminant Hepatitis
2. Heart Attack of Specified Severity 21. Motor Neurone Disease
3. Stroke with Permanent Neurological Deficit 22. Primary Pulmonary Hypertension
4. Coronary Artery By-pass Surgery 23. HIV Due to Blood Transfusion and Occupationally Acquired HIV
5. End Stage Kidney Failure 24. Benign Brain Tumour
6. Irreversible Aplastic Anaemia 25. Severe Encephalitis
7. End Stage Lung Disease 26. Severe Bacterial Meningitis
8. End Stage Liver Failure 27. Angioplasty & Other Invasive Treatment for Coronary Artery
9. Coma 28. Blindness (Irreversible Loss of Sight)
10. Deafness (Irreversible Loss of Hearing) 29. Major Head Trauma
11. Open Chest Heart Valve Surgery 30. Paralysis (Irreversible Loss of Use of Limbs)
12. Irreversible Loss of Speech 31. Terminal Illness
13. Major Burns 32. Progressive Scleroderma
14. Major Organ / Bone Marrow Transplantation 33. Persistent Vegetative State (Apallic Syndrome)
15. Multiple Sclerosis 34. Systemic Lupus Erythematosus with Lupus Nephritis
16. Muscular Dystrophy 35. Other Serious Coronary Artery Disease
17. Idiopathic Parkinson’s Disease 36. Poliomyelitis
18. Open Chest Surgery to Aorta 37. Loss of Independent Existence
19. Alzheimer’s Disease / Severe Dementia  

Hospitalized patient is glad that he has critical illness policy coverage to cope with hospital bills.


Why is Critical Illness insurance Important?

1. Chances of getting a CI in Singapore are higher than you think

The top 5 CIs in Singapore are:

  • Cancer

is the leading cause of death in Singapore. On average, about 1 in 4 people will be diagnosed with cancer in their lifetime. There are many different types of cancer, and the treatment options will vary depending on the type of cancer.

  • Heart disease

is the 2nd leading cause of death in Singapore. According to the National Heart Centre Singapore, about 1 in 2 Singaporeans will develop heart disease in their lifetime.

The number of heart attack episodes increased from 8,014 in 2011 to 12,403 in 2021.

  • Stroke

The number of stroke episodes in Singapore has increased from 6,143 episodes in 2011 to 9,680 episodes in 2021. According to the National Stroke Association of Singapore, about 1 in 4 Singaporeans will have a stroke in their lifetime.

  • Liver disease

According to research2, about 1 in 10 Singaporeans will develop liver disease in their lifetime.

  • Kidney disease

It can be caused by a variety of factors, including diabetes, high blood pressure, and autoimmune diseases. According to the National Kidney Foundation of Singapore, about 1 in 10 Singaporeans will develop kidney disease in their lifetime.

Kidney disease can lead to kidney failure, which requires dialysis or a kidney transplant.

CI insurance can help to pay for your medical expenses and cushion the financial impact of an unforeseen and serious illness.

It also provides financial protection and ensures that you and your family’s living expenses continue to be met during this difficult period.

2. Hospitalisation insurance isn’t a substitute for CI insurance

You might be wondering: why get CI insurance when you already have MediSave, MediShield Life or your own private/company hospitalisation & surgical insurance coverage?

Hospitalisation insurance covers your hospitalisation expenses and treatment costs, including relapses. While it does mitigate your medical costs to a great extent, there are some limitations.

For instance, you usually can’t claim for anything outside of your medical expenses or treatment such as loss of income. Integrated Shield Plans typically cover post-hospitalisation only for up to a year. For MediSave, there are also caps to how much you can utilise it for each type of procedure.

Read more: Guide to health insurance in Singapore

On the other hand, CI insurance is a lump sum payout that gives you the flexibility on how you want to use it. For example, you can use it for your family’s living expenses while you take a break from work during your recovery phase.

You can also use it to pay for medical needs that are not covered by your hospitalisation insurance.

Some CI insurance may provide multiple payouts in the event of a CI relapse.

3. It lets you focus your mind on recovery

Dealing with a CI isn’t just physically and emotionally exhausting, it can also be financially draining. With CI insurance, the payout helps take care of your finances and loss of income so that you can focus on recovery.

Some CI plans may cover your Intensive Care Unit (ICU) stay.

4. CI coverage is not as expensive and complicated as you may think

The cost of coverage will vary depending on your age, health, and the amount of coverage you choose. However, there are affordable options available for most people.

Getting CI coverage does not need to be out of your budget or complicated.

For example, DBS offers a range of CI plans that start from as low as S$6 per month. These plans provide coverage for a variety of CIs, including cancer, heart disease and stroke.

Find out more:

You can start with getting a standalone CI policy or a term life policy with CI rider to cover your working years first.

Read more: Understanding Critical Illness Insurance 

 

Two ladies looking at their Plan & Invest tab in digibank to calculate their protection gap.


How much Critical Illness coverage do you need: Where to begin

The first step is to understand what your personal CI insurance gap is.

If you are not sure how much coverage you need or need a refresher, the CI calculator in your Plan & Invest tab in digibank will come in handy.

Simply key in your number of dependents, savings, and existing coverage. The app will crunch the numbers and generate a personalised report for you that includes your CI protection gap (if any).

Lastly, DBS has partnered with major insurers in Singapore to make health insurance easily accessible online for purchase. You can now independently learn, compare and buy a plan most suited to your own needs.

Find out more on DBS Health Marketplace.

Ready to start?

Check out digibank to analyse your real-time insurance coverage. The best part is, it’s fuss-free – we automatically work out your gaps and provide planning tips.

Plan with DBS  Plan with POSB

You may also wish to speak to the Wealth Planning Manager today for a financial health check and how you can better plan your finances.

Let's Meet

Sources:

[1] Singapore Cancer Society, “Common Types of Cancer in Singapore (singaporecancersociety.org.sg)”. Retrieved 28 May 2024.

[2] Mark Muthiah, Chern H Chong & Seng G Lim, “Liver Disease in Singapore”. Retrieved 28 May 2024.

National Heart Centre Singapore
National Kidney Foundation of Singapore
National Registry Of Diseases Office

Disclaimers and Important Notice
This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.

Thank you. Your feedback will help us serve you better.

Was this information useful?

That's great to hear. Anything you'd like to add?
We're sorry to hear that. How can we do better?
Enter only letters, numbers or @!$-(),.