CRITICAL ILLNESS INSURANCE
Critical illness insurance pays a lump sum either when you are first diagnosed with a critical illness covered by the policy, or after having a type of surgery covered by the policy. The lump sum does not depend on your admission into hospital or on your actual medical expenses. A critical illness benefit can be sold as a stand-alone plan or policy or be packaged into a life policy or as an optional rider to a life policy.
The types of critical illnesses covered may vary from one insurer to another. But most major illnesses and types of surgery are covered by almost all policies.
- major cancers,
- heart attack,
- coronary artery bypass surgery,
- stroke and kidney failure.
Do note that:
- The benefits are paid only if the disease or surgery exactly meets the definition stated in the policy. Definitions of diseases covered by a standard critical illness policy are fixed across all insurance companies in Singapore.
- There is usually a waiting period for certain diseases or types of surgery. If any disease or type of surgery specified by the policy is diagnosed or carried out during the waiting period, no benefits will be paid.
Some critical illness policies pay a smaller amount for earlier stages of cancer, or make several payments upon diagnosis of different insured critical illnesses, subject to the sum insured or policy limits.
Disability Income Insurance
Disability income insurance pays a fixed amount each month to replace the income you would lose if you are unable to work as a result of an accident or illness. These policies may pay up to 80% of your average monthly salary. The policy aims to ease your financial loss, but will not completely replace the income you earned before the accident or illness.
Do note that:
- There may be a deferred period during which benefits will not be paid. Benefits are payable only if you are continuously disabled after the deferred period. The monthly income benefit will usually be paid for up to 5 or 10 years, or until you are 60 or 65.
- The monthly payments are stopped or reduced when you start working again, even if it’s not the same work that you did before your illness or accident. The reduction in benefits may be in proportion to any recovery you make. The insurer will assess your rate of recovery through medical check-ups.
- Clarify with your insurer how disability is defined in the policy. Some policies may define disability as not being able to perform your usual work. Others may define it as not being able to do any work at all. The amount of premium payable can vary depending on a number of factors, including the definition used. Do check with your insurer for the definitions used in your policy.
Hospital Cash Insurance
Hospital cash insurance pays a fixed amount of money for each day you are hospitalised for medical treatment or surgery. The total amount paid under this policy may be more or less than your actual medical expenses.
Do note that:
- A hospital cash insurance policy may have a waiting period. This means benefits are paid only after you have been hospitalised for more than a set number of days.
- Benefits may also be paid for only a fixed number of days each year or the life of the policy. If it’s for a fixed number of days over the life of the policy, the policy will end once the lifetime limit has been reached.
Waiting periods and benefit limits may vary across policies.
Medical Expense Insurance
Medical expense insurance pays for certain medical expenses incurred because of an accident or illness. Medical expenses can arise from any of the following medical treatments or procedures:
- in-patient medical treatment or surgery,
- day surgery,
- consultations with specialists before, during and after the hospital stay,
- X-rays and laboratory tests.
‘Major’ medical expense insurance will pay expenses for longer hospital stays due to a major illness like cancer or for major surgery such as heart bypass surgery or organ transplant.
Do note that:
- The policy may not fully pay for actual medical expenses incurred.
- The policy will usually include limits for each illness, disability, by policy year or lifetime.
- Certain conditions and pre-existing conditions may be excluded from cover. Treatment that is not for medical reasons may also be excluded.
- Investigative procedures such as tests / biopsies for diagnosis purposes, for example to detect a specific illness or medical condition may or may not be included.
- Waiting periods may also apply. If so, expenses will not be paid during the waiting period. See more on Waiting Periods.
- Some policies may also have ‘deductible’ and ‘co-insurance’ features.
- With medical expense insurance, the total reimbursement you will get from all your policies is limited to your actual expenses. So buying additional medical expense insurance policies does not necessarily provide extra benefits.