InsuranceLecturer — Critical Illness Insurance-Breast cancer patient Ms Tan was shocked when her insurer rejected a claim she had made against her critical illness policies in August 2010. She had bought three critical illness insurance policies from the same insurer at different times.
However, her claim was turned down as none of her critical illness insurance plans covered her medical condition, which is an early stage breast cancer known as ductal carcinoma in situ. She had undergone a mastectomy in June and, so far, appears to be free of cancer.
She was unaware that under the terms of traditional critical illness insurance plans, only those afflicted with a later stage of cancer would qualify for a claim. She claimed she was not informed of this even though she had emphasized to her agents that her mother had died of breast cancer and that she wanted to be insured against the risk.
Ms Tan has a separate hospitalization and surgical policy which covered her hospitalization bill of about $30,000.
As Singapore become an affluent country with a population close to 5 million and growing, it is shocking to know that many Singaporean as well as Permanent Residents is not covered comprehensively against Major or critical illness expenses.
A study taken from Life Matter Survey Index conducted in 2021 reveals that only 24% of Singaporean have enough funds when diagnosed with a critical illness.
The next thing to look deeper is that out of those 24% Singaporean who have enough funds, how many have covered themselves comprehensively against a scenario depicted above in Ms Tan’s diagnosis of early stage critical illness? How about those who don’t even have enough funds? What kind of financial burdens will the family be bearing if the bread winner is to be diagnosed with a critical illness?
To have a better understanding, a traditional critical illness plan pays a lump sum if you are diagnosed with one of 30 major illnesses as follows, except for angioplasty where Payment benefit is equal to 10% of the Insured Amount (subject to a S$25,000 maximum)
- First Heart Attack
- Coronary Artery Surgery
- Other Serious Coronary Artery Disease
- Angioplasty and Other Invasive Treatments for Coronary Artery Disease
- Fulminate Viral Hepatitis
- Pulmonary Arterial Hypertension
- Kidney Failure
- Major Organ Transplant (kidney, liver, heart or lung)
- Multiple Sclerosis
- Muscular Dystrophy
- lzheimer’s Disease / Irreversible Organic Degenerative Brain Disorders
- Loss of Hearing
- Heart Valve Replacement
- Loss of Speech
- Major Burns
- Surgery to Aorta
- Terminal Illness
- End-stage Lung Disease
- Chronic Liver Disease
- Motor Neurone Disease
- Parkinson’s Disease
- Aplastic Anaemia
- Bacterial Meningitis
- Benign Brain Tumour
The critical illness conditions stated above are usually in their late stages in order for a claim to be able to be administered. Besides the fact that it does not cover early stage critical illness like in Ms Tan’s case, another downside is that once you are awarded with a payout, the policy is usually terminated and you are left with no more critical illness coverage.
Most critical illness insurance plans covered only the standard 30 critical illnesses stated above in the late stage. It was not until recent years that more insurance companies begin to see the need to cover early stage and multiple payout critical illness coverage that they came out with their respective enhanced critical illness insurance plans.
In Ms Tan’s case, she would have qualified for a claim if she had brought an enhanced critical illness insurance plan.
Enhanced critical illness insurance plan address the need for early payouts and, for some plans, they provide the potential of multiple claims up to 2-3 times.
With better healthcare facilities and awareness in Singapore, it is increasingly common to detect critical illness early, thus it is important to ensure that your critical illness insurance coverage is up to-date, with possibility of an enhanced critical illness insurance plan in place.