Having adequate critical illness coverage plays a vital role in protecting your financial well-being. Learn more about how you can obtain sufficient coverage.

Critical illness (CI) can strike anyone at any time, disrupting not just health but also financial stability. In Singapore, from 2017 to 2021, an average of 46 individuals are diagnosed with a cancer every day¹ while 1 out of 3 deaths are due to cardiovascular diseases such as stroke or heart conditions². Given these statistics, the importance of CI coverage cannot be emphasised enough.

Understanding Critical Illness (CI) Insurance
 

Do I need CI insurance if I have a hospitalisation plan?

Think of CI insurance as a financial lifeline. It pays out a lump sum when you’re diagnosed with a CI covered by the policy. While your hospitalisation insurance covers medical expenses arising from hospital stays and treatments, CI insurance offers you a financial buffer to manage expenses, replace lost income and cater to any other financial needs, allowing you to keep your savings intact for its intended purposes such as retirement.

How much CI coverage do I need?

The Life Insurance Association Singapore (LIA) recommends that an average working adult in Singapore should have CI coverage amounting to 3.9 times their annual income, as of 31 December 2021³. This amount is estimated to cover expenses and debt payments during the recovery period which is assumed to be 5 years³. Using this as a benchmark, you should assess if you and your loved ones have sufficient CI coverage.

The Protection Gap in Singapore

According to the 2022 Protection Gap Study by LIA³, for economically active individuals, the percentage of financial protection need for critical illnesses (CI protection gap) has narrowed down from 81% in 2017 to 74% in 2022. The average CI coverage per policyholder is SGD193,300, which is approximately 2.1 times of average annual income.³ Considering the recommended coverage amount is 4.0 times of average annual income, this still leaves a significant protection gap.

Choosing the right CI plan

Navigating the world of CI can be daunting but it’s all about understanding your unique needs. The plan you choose should ideally cover the LIA's standard list of 37 critical illnesses (CIs)⁴. To ensure that you’re adequately covered, consider the following:

1. Types of CI plans
   You can consider purchasing a standalone plan or add a rider to your existing life insurance policy. It’s worth noting that any claim from your CI rider may impact your future life insurance coverage amount. 


2. Stages of CI covered
   Depending on your preferences, you can opt for a plan that covers all stages of the illness   or choose a plan that only pays out during the late-stage diagnosis. Keep in mind that an early diagnosis can allow for timely treatment and potentially lead to better health outcomes. If your family health history points towards potential CIs, investing in early and intermediate stage coverage could be a smart move. 
   
   Dealing with a CI may not be a one-time affair. HSBC Life Cancer ReCover offers cancer survivors insurance protection against subsequent cancer diagnoses, whether for a relapse of the same cancer or new cancers.


3. Duration of the coverage 
   Some CI plans allow coverage up till  certain ages for example 65, 75, or 100 years old while others offer renewable terms of 10, 20, 25 years or maybe more depending on the policy.  


4. The payout options 
   You can choose a single or a multiple-payout plan. While a multiple-payout plan may cost more, it allows you to claim more than once in case of illness recurrence or relapse. 
   
   HSBC Life Super CritiCare offers multiple lump sum payouts for early, intermediate, and advanced stages of your ailment. The plan also includes relapse coverage for CIs such as cancer, heart attack and stroke.


5. Your budget
   There’re a variety of options available for CI coverage, catering to different budgets and offering varying levels of protection. In addition to standalone plans and riders, there are CI plans that cover specific illnesses that are more prevalent in one gender over the other such as cervical cancer and prostate cancer. HSBC Life CritiCare for Her and HSBC Life CritiCare for Him are examples of such plans.
   
   Typically, more comprehensive coverage comes with higher premiums. Keep in mind that there’s no right or wrong choice when it comes to choosing a CI plan. The key is to find a solution that provides adequate coverage that align with your protection needs. Ensure that you commit to premiums that fit within your budget, as missing premium payments can result in the loss of insurance coverage.

Your next steps

Now that you have a better understanding of CI coverage, it's time to act. Speak to a Financial Planner, evaluate your options, and secure a plan that meets your needs.

Having adequate CI coverage gives you peace of mind and secures your financial future.

What's next?

Contact a Financial Planner >

¹ Common types of cancer in Singapore | Singapore Cancer Society
² Heart disease statistics | Singapore Heart Foundation
³ 2022 Protection Gap Study | Life Insurance Association Singapore
The material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
⁴ LIA Critical Illness (CI) Framework 2019 | Life Insurance Association Singapore