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Critical Illness Definitions in Singapore is Changing – How Does it Affect You?

If you’re lucky, you may never need to worry about a critical illness such as cancer, a heart attack, or stroke. However, if you’re not so lucky, your health insurance plan may not protect you completely from a financial standpoint. Critical illness insurance aims to provide financial assistance and protection when you are diagnosed with a critical illness or in need of a covered surgery. The lump sum paid by the insurer can be used to cover medical or personal expenses.

Did you know that Singaporeans are advised to have at least $316,000 of critical illness coverage according to a 2017 study by Life Insurance Association (LIA) of Singapore (Straits Times 20184)? This is advisable since over 90 percent of all severe stage claims received by life insurers in Singapore typically fall under the following critical illnesses: major cancer, heart attack of specified severity, coronary artery bypass surgery, end-stage kidney failure, and stroke with permanent neurological deficit (Value Champion 20191).

On 29 August 2019, the LIA of Singapore accounted they would be making revision to the critical illness names and definitions with effect from 26 Aug 2020. Since its last update in 2014, the LIA of Singapore has decided to review and revise its general terminology with the intent to provide greater clarity for both policyholders and life insurers who provide critical illness coverage.

According to the LIA of Singapore, this round of review will address any ambiguities that have arisen due to medical advancements or health trends throughout the past five years. This will also ensure that the scope of coverage is clear for policyholders while simultaneously ensuring that critical illness products stay relevant to the times while taking into consideration the rapidly ageing population and research studies that indicate the rise of chronic illnesses.

Some of the most noticeable changes to these definitions include (SingSaver 20203):

Deafness (Irreversible Loss of Hearing) – this addition of the term “irreversible” recognizes the possibility of future medical treatments that may restore hearing to a point as medical advancements occur.

Major Cancer – amendments have been made to the exclusions originally stated in this term’s definition.

Heart Attack of Specified Severity – this term has been amended to make it clear that both Type 1 Myocardial Infarction and Type 2 Myocardial Infarction are covered within these policies.

Poliomyelitis – clarification that a diagnosis does not need to be made by only a neurologist but can be provided by other specialists in the field to be covered under the policy.

Stroke with Permanent Neurological Deficit – the term “stroke” has been amended to avoid restricting claims as it did with its previous definition.

Coma – medically induced comas have been excluded at this time.

Irreversible Aplastic Anaemia – the term “irreversible” was included to confirm permanency versus that which can be treated.

Benign Brain Tumor – the new definition specifically excludes abscess, angioma, and tumors of the skull base.

Other Serious Coronary Artery Disease – these updates include the branches of the above coronary arteries have been excluded, which could lead to other potential coronary problems.

If you haven’t invested in critical illness insurance coverage, it may be time to consider it. Much like traditional health or life insurance, it’s important to assess your needs and amount of coverage needed before investing in a plan – but there’s no better time than now to get started!

Learn more about the importance of understanding Critical Illness, Savings, Investments and Financial Planning with me. Participate, share and unlock up to a total worth of S$20,000 e-vouchers in the 4 different tiers along the way! T&Cs apply. Find out more here.

Week 2

How much would a Singaporean require in Critical Illness protection?

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$316,000

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Content Sources
1 - Evlanova, Anastassia (June 2019), Guide to Critical Illness Insurance in Singapore, retrieved from Value Champion
https://www.valuechampion.sg/guide-critical-illness-insurance-singapore
2 - MoneySmart (July 2020), Critical Illness Definitions Will Change from 26 August 2020 – What Does This Mean to Me?, retrieved from MoneySmart
https://blog.moneysmart.sg/life-insurance/critical-illness-insurance-singapore-definition-changes/
3 - SingSaver (July 2020), Changes to definition of ‘critical illness’ in life insurance policies, retrieved from AsiaOne
https://www.asiaone.com/money/changes-definition-critical-illness-life-insurance-policies
4 - Tan, Lorna (April 2018), Working adults have inadequate cover if critical illness strikes, says study, retrieved from Straits Times
https://www.straitstimes.com/business/banking/working-adults-have-inadequate-cover-if-critical-illness-strikes-says-study