BEST CRITICAL INSURANCE SINGAPORE (UPDATED JANUARY 2024)

What is a critical illness plan?

A critical illness plan is an insurance policy that provides a lump sum payment upon the diagnosis of a severe illness. Most insurers provide options for comprehensive coverage as well as coverage aimed at the top 3 critical illnesses such as cancer, heart attack and stroke.

1 in 4 Singaporeans may develop cancer in their lifetime1

No. 1 cancer affecting men: Colon and rectum cancer

No. 1 cancer affecting women: Breast cancer

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What is a critical illness plan?

A critical illness plan is an insurance policy that provides a lump sum payment upon the diagnosis of a severe illness. Most insurers provide options for comprehensive coverage as well as coverage aimed at the top 3 critical illnesses such as cancer, heart attack and stroke.

1 in 4 Singaporeans may develop cancer

No. 1 cancer affecting men: Colon and rectum cancer

No. 1 cancer affecting women: Breast cancer

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Types of critical illness plans

The majority of critical illness plans are structured as term plans. You have the option to add this coverage onto a whole life plan. There are generally five types of critical illness insurance policies available in Singapore, and they are:

  1. Term cancer-only
  2. Term critical illness (Single-claim)
  3. Term life with critical illness rider
  4. Whole life with critical illness rider
  5. Term multipay critical illness
  6. Whole life with multipay critical illness rider

1. Term cancer-only plan

Term cancer plans are better for individuals who may not be in optimal health conditions. This is because they have a simpler health declaration process for purchasing, with certain companies even waiving the requirement for a medical check-up. Moreover, term cancer plans provide an opportunity for individuals with pre-existing conditions to make a purchase, which is typically not allowed with most critical illness plans.

In addition, some critical illness plans exclude coverage for early stages of cancer, whereas a cancer plan offers comprehensive coverage across all stages of the disease, including death. Cancer plans can also be more affordable than critical illness plans.

However, note that the cancer insurance does not include coverage for any other critical illnesses and can only be claimed if the insured is diagnosed with cancer. This type of plan offers coverage for critical illness for a set number of years or until a specified age. The plan will expire once a claim is made.

2. Single-claim term critical illness plan

This type of plan offers coverage for critical illness for a set number of years or until a specified age. The plan will expire once a claim is made. Unlike the Term life with critical illness rider (item 3 on this list), this plan type provides very limited death coverage—usually around $5,000 and no coverage for disability.

3. Term life plan with critical illness rider

A term life plan provides death and total permanent disability coverage by default, and provides an option for customers to add critical illness riders to this plan. When the rider is added, the lump sum is paid out if the insured person is diagnosed with a critical illness.

This plan is useful for people who would like to add coverage for death or disability, compared with a plan that only covers critical illness.

4. Whole life plan with critical illness rider

Most term plans provide coverage only up to a maximum age of 85. If you wish to extend your critical illness coverage beyond this age limit, consider getting a whole life plan with a critical illness rider.

On top of providing lifetime coverage, this plan type also accumulates cash values in the form of annual bonuses that are accumulated in the plan over time. This provides customers with the option to encash the plans in the future if they do not need the coverage anymore.

5. Term multipay critical illness plan

As the name suggests, multipay plans allow multiple claims upon diagnosis of various stages of critical illnesses and relapses, unlike single-claim plans. However, these plans come with a higher price tag, and can cost up to 50% more than single-claim plans.

6. Whole life plan with multipay critical illness rider

This refers to a whole life plan, like plan #4. except this time a multiple payout critical illness rider is attached to the whole life plan.

For those with pre-existing health conditions: PruVital Cover, Tiq Cancer
Single-claim term plan: HSBC Term Protector, Singlife Elite, Tokio Marine TM Term Assure
Multipay term plan: Singlife Multipay Critical Illness
Whole life plan: AIA Guaranteed Protect Plus, Great Eastern Great Flexi Protect, HSBC Life Treasure, FWD Life protection, Singlife Whole life, Manulife Life Ready Plus

Colon and rectum cancer is the number 1 cancer affecting males

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What are the differences between these plans?

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What are the major critical illnesses covered

The LIA Critical Illness Framework has defined 37 severe stages of critical illness, and these are consistent across all insurance companies. This makes it straightforward for customers to choose the right critical illness plan without the confusion of comparing medical terms.

Common illnesses in the list include:

  • Cancer
  • Heart attack
  • Stroke
  • Blindness
  • Kidney failure

This framework applies to all critical illness coverage in Singapore. Some policies cover the three most common critical illnesses: cancer, heart attack, and stroke.

There are more comprehensive plans provide coverage for multiple critical illnesses, encompassing various stages of conditions too.

However, note that that not all cancers are covered by critical illness plans. Some cancers that are excluded include:

  • Skin cancer (non-melanoma)
  • All tumours in the presence of HIV infection

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Which plan suits me?

  • Term life or Whole life
    Those without any life insurance.
  • Critical illness plan or Multipay critical illness plan
    Those who want to increase their critical illness coverage on top of their term or whole life insurance.
  • Cancer plan
    Those with pre-existing health conditions who are unable to purchase other critical illness coverage. Those who are well-covered but wish to specially increase cancer coverage.
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I already have health insurance, is it still necessary to have a critical illness plan?

Health insurance primarily provides reimbursement for medical expenses such as hospitalisation, medication costs, chemotherapy, and so on. On the other hand, critical illness plans are designed to compensate for income loss during the recovery period.

Therefore, these two types of plans complement each other by ensuring that the costs of treatment and household expenses are adequately addressed.

For a comprehensive understanding of how various insurance plans function to safeguard against unforeseen situations, you can refer to our insurance map.

What factors should I consider before buying?

Here are some key points you should be mindful of before purchasing a critical illness plan.

Prioritise which insurance policy to buy first

When deciding on insurance policies with a limited budget, we advise most clients to prioritise health insurance over critical illness plans.

Health insurance provides coverage for various medical expenses, including those associated with critical illnesses or accidents. It is important to first cover medical bills that may arise from unexpected emergencies, because the costs can be substantial depending on the required treatments.

Only thereafter should you consider a critical illness plan if you have extra budget after sorting out your medical insurance.

Scope of coverage

Consider the level of coverage you desire when choosing your plans. A critical illness plan, for example, covers you more broadly compared with a cancer-only term plan. This coverage of a bigger bucket of illnesses acts as a wider safety net, in case you’re faced with huge unexpected costs.

For most clients, we recommend they prioritise critical illness plans before they consider targeted cancer plans, because the wider coverage ensures greater peace of mind.

Medical history

If you have a medical history in the family associated with specific illnesses, you should ensure your coverage directly addresses these risks. For instance, the National Cancer Centre Singapore reports that 5-10% of cancer cases are related to a hereditary link.

Renewal terms

The policy term is the length of time that the insurance policy will cover you.

We often tell clients to look out for premiums that might increase when the policy is renewed. For example, in a yearly renewable term policy, the premium amount increases annually based on your age.

This is why a yearly renewable term may initially appear more attractive, with lower premiums to start with. But as the premiums on those rise with the years, the term plans with fixed premiums end up becoming more economical during the later years.

It is therefore advisable to opt for policies with longer policy terms in order to save on premiums in the longer run. With a longer policy term, you get to lock in the premium for a longer stretch at a time.

Breast cancer is the number 1 cancer affecting females

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How much coverage should I get?

Insurers provide two levels of coverage: critical illness plans and early critical illness plans. Early critical illness plans offer coverage for illnesses diagnosed at an early stage, while critical illness plans only cover illnesses in their later stages.

So if an illness is identified early, claims made under critical illness plans may be denied or rejected.

Typically, early critical illness plans come with higher premiums compared with traditional critical illness plans. This is because early coverage increases the probability of claims being filed, since they cover a wider range of conditions and allow for earlier payouts.

The broader coverage and potential for earlier claims contribute to the higher premiums associated with early critical illness plans.

We help clients figure out their optimum coverage amount based on their income:
Critical illness calculation: 5 years of current annual income or household expenses.
Early critical illness calculation: 2 years of current annual income or household expenses.

Try out our insurance calculator to determine your insurance needs

1 Singapore Cancer Society

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