Life is unpredictable and you never know when an illness might strike.
A debilitating illness threatens both your physical health and financial health. However, proper financial planning can help you feel more in control of your life so you can concentrate on getting well without worrying about hefty hospital bills should you fall ill.
How do you know if your critical illness coverage is enough for you? What happens if you are under-insured? Read on to find out more.
What is critical illness?

Critical illness (CI) insurance is a type of policy that pays you a lump sum of money if you are diagnosed with a critical illness covered by the policy.
As suggested by its name, critical illness refers to a debilitating or serious illness that affects your quality of life.
According to the Life Insurance Association (LIA) of Singapore’s framework, 37 critical illnesses are covered under CI policies.
As the type of critical illnesses covered by various insurers may vary, it would be best to speak to your insurer to check on your coverage.
What happens if you don’t have enough coverage?
1. Not all your expenses will be covered by hospitalisation insurance

There are limitations to your hospitalisation insurance.
A private hospital plan may cover you for your surgeries and hospital stays, as well as certain outpatient treatments including chemotherapy and kidney dialysis. However, if you get diagnosed with a critical illness, you would usually have to undergo several expensive treatments. Since hospitalisation insurance has coverage limitations, it will not be sufficient to cover you for all consultation fees, tests and treatments.
This is where a CI policy comes in handy — since you have the flexibility to use the payout as you wish, a CI policy allows you to pay for important things including daycare for your children or make up for your lost income as you recover.
2. You may run out of MediSave and MediShield Life coverage

Myth: MediSave and MediShield Life can cover all medical expenses. As Singaporeans, we are fortunate to have these schemes to take care of our healthcare needs. However, these can only cushion the financial blow of hospitalisation and some outpatient treatment, but there are still limitations to these schemes.
For example, MediSave can only cover you for up to $800 for daily hospital limits below Class B2 wards. Since hospitalisation usually costs more, especially if you prefer a better ward class, you will have to pay the rest out of your own pocket.
On the other hand, MediShield Life offsets the more expensive class B2/C hospital stays and selected outpatient treatments such as kidney dialysis and chemotherapy. The balance will still have to be withdrawn from your MediSave or your personal savings.
Read more: 8 MediShield Life Myths Debunked
When you are diagnosed with a critical illness, the last thing you’d want is to let your financial woes add on to your burden. With a CI policy, you can use the payout to make up for your MediShield Life payout limits, or MediSave shortfall.
3. Your savings may deplete quickly in the wake of a critical illness

The consequences of a critical illness could be far reaching. On top of the expensive treatments required, the illness may possibly even leave you with a disability that necessitates long-term rehabilitation. For instance, if you suffer from a stroke due to a critical illness, you may require multiple surgeries to regain mobility. However, recovery is a long process and you may face physical restrictions post-surgery, with everyday routines such as walking and showering becoming challenging. A full recovery may require the help of other specialists, which is not covered by your health insurance.
Why should you get CI coverage as early as possible?
1. The chances of getting critically ill are high
The chances of getting critically ill in your lifetime are high, and the associated costs can be overwhelming without a CI policy.
In fact, research findings reveal that more than 90 per cent of advanced stage claims fall into one of the following five critical illnesses:
- Major cancer
- Stroke with permanent neurological deficit
- Heart attack of specified severity
- End stage kidney failure
- Coronary artery by-pass surgery
2. Critical illness policies are affordable, especially when you are young

When you are healthy and young, you may think that it is not necessary to get a CI policy. However, the truth is that illness can strike at any time, and it is always better to be prepared. Furthermore, if you are healthy and young, the premiums are more affordable and you get to enjoy the full coverage for the policy’s illnesses.
On the flipside, things can get tricky if you have been diagnosed with an illness. While you can still purchase a CI policy, you may have to pay higher premiums or not be eligible for coverage of your diagnosed illness.
3. Critical illness may have multiple stages and may happen more than once
Critical illnesses typically come in multiple stages. For instance, stage 0 means that the cancer is still situated in the body part where it started and has yet to spread to nearby tissues, while stage 4 indicates that the cancer has spread to other body parts.
CI policies used to only cover advanced stages, but have since been enhanced to allow people to claim payout at different stages including the early, intermediate and advanced stages.
Furthermore, you may also suffer a relapse from your critical illness a few years down the road, so it is crucial to protect yourself with a CI policy.
Are you sufficiently covered?
To answer this question, you must first find out what your personal insurance gap is.
If you are unsure of the coverage you need, fret not. Planner Bee’s Insurance Needs Calculator can help you crunch the numbers on how much early critical illness (ECI) and CI you need, based on your current average monthly expenses.

Source: Planner Bee’s Insurance Needs Calculator
Nothing in life is more valuable than good health
Healthcare costs in Singapore are continuously rising, and battling a critical illness can be very stressful. However, you can assuage your financial burden by getting familiar with CI policies and protect yourself in advance. Don’t wait for an illness to strike – the best time to get a CI policy is now.
Read more: Best Critical Illness Insurance