5 Important tips to keep in mind when buying critical illness insurance

Falling ill can weigh heavily on the mind, body, and pocket. As we all know, medical expenses can be quite expensive. Now, as a Singaporean citizen or PR, your medicals are covered to a certain extent by MediShield Life. You may have also increased your health insurance coverage with an Integrated Shield Plan for better protection. However, for a critical illness, you would possibly need more coverage than what is offered by the average health insurance plan. This kind of wholesome protection only comes from critical illness insurance.

Critical illness insurance is a form of coverage that pays you a lump sum amount if you are diagnosed with any of the critical illnesses covered by the insurer. You can use this lump sum for any purpose you want to. For instance, you may want to use the payout for the salary of a domestic worker to care for you while you recuperate. Your critical illness plan payout essentially helps you run your home while you receive medical treatment.

As we can see, the coverage from your critical illness plan can prove to be so important. Therefore, it is extremely essential that you select the plan best suited for your coverage needs. To help steer you in the right direction, we have listed out 5 important tips that can be helpful when you buy critical illness insurance.

Tip 1 – Calculate the coverage you actually require

The payout that you receive from critical illness insurance can help you tide over a lot of the expenses you may face during an illness. However, the benefits of the plan may only shine through if you select the right coverage amount.

If you are wondering how to arrive at an appropriate figure, start by calculating your household expenses. Add up the total amount that it takes to pay your rent/mortgage, utility bills, and other related home costs for an entire year. Do remember to also figure in any other specific expenses you incur such as a car loan or your child’s school fees. Now, multiply this figure for at least a few years (LIA recommends 5 years). The sum that you arrive at is the coverage amount that would be possibly ideal for you.

According to studies, 5 years is the average time that it usually takes for a person to recover from a critical illness and get back on their feet. Depending on the severity of the illness, the recovery period may be shorter or longer. However, it is always best to be covered for a bit more than to be underinsured.

Tip 2 – Explore the different types of critical illness insurance plans

Not many are aware that there are different types of critical illness plans. You can get critical illness insurance that generally covers you against a range of diseases or opt for something more specific such as a cancer insurance plan. Although cancer is one out of the many critical illnesses, it is the number one killer in Singapore.

Leading insurers in the country also offer male-specific critical illness and female-specific critical illness plans which cover dread diseases that are unique to each gender. If you are looking for something more targeted, you may even consider options that provide you with coverage against one of the top gender-specific cancers such as prostate cancer in men and breast cancer in women.

Tip 3 – Make sure to check the waiting period

The waiting period in critical illness insurance can differ greatly between insurers. It is advisable to carefully go through the plan’s fine print to find out the waiting periods that you need to adhere to. The lower the waiting period, the better it is for you.

Tip 4 – Look for customisable plans

You might want to look into buying a critical illness insurance plan that is customisable to your needs. You can start off with basic coverage and later enhance your plan with supplementary benefits as your needs evolve.

For instance, you may later choose to add benefits that will cover you against infectious diseases or even relapse of critical illnesses. Or, you may want to include coverage for early critical illness. Your plan then becomes more holistic in its protection as the years roll by.

Tip 5 - Inspect cost in terms of affordability

Finally, do evaluate the cost of the plan in the long run. If the premiums already feel heavy on the pocket, they might get even more difficult to pay in the future as you grow in commitments.

In case you are currently facing a cash crunch, opt for a basic critical illness insurance plan and enhance it with riders when you can afford to do so. Look online to compare critical illness insurance plans and choose the one that suits your needs and budget the best.