Critical Illnesses (CI) are getting more and more prevalent in Singapore due to our ageing population. Under the standard definition, there are 37 CIs, of which includes major cancers, stroke, and kidney failure.
With an increase in the number of people having CI, it is expected that many Singaporeans would have a comprehensive understanding of CI insurance coverage. However, based on recent findings from the AIA Health Matters Survey 2016 conducted by Nielsen, it appears that knowledge on CI is not as extensive as one would expect.
Here are four major misconceptions that many Singaporeans have.
1. Critical illness insurance pays for multiple critical illness claims as long as the total amount is kept within the sum assured.
A staggering 71% of the 300 Singaporeans surveyed think that this is true. CI insurance only provides a payout for one critical illness claim, regardless of how much lower it is than the sum assured. If you have two different critical illnesses at the same time, you will only be able to claim for one of them.
Suppose you suffer from early stage cancer and diabetes, and both the critical illnesses individually allow you to claim 50% of the payout each. Even though they add up to 100%, you will only be able to claim 50% of the payout.
2. Those in remission from a critical illness are able to take up a new critical illness insurance if there is no relapse after a certain time period.
Half of the surveyed group got this wrong. It is not true that you can definitely take up a new critical illness insurance after suffering from a critical illness. Insurance providers are unlikely to cover you because the chances of relapse are greater.
3. Critical illness insurance pays a lump sum cash benefit when you are diagnosed with a critical illness along with monthly payouts to supplement medical expenses.
61% thought this was correct, even though insurance plans will definitely not provide monthly pay-outs to supplement medical expenses. Regardless of how much your medicine or hospital visits cost, you will only be given a lump sum that is intended for all related expenses.
Also, depending on which type of critical illness insurance policy you bought, getting diagnosed with an early stage CI may not guarantee you a payout. This is because many CI plans only cover major stages of CI, so check the coverage properly before committing to a CI plan.
4. Critical illness insurance reimburses your medical expenses such as the hospital bills and post-surgery treatments.
Only 34% of the group knew that this statement is not true. CI insurance does not take into account how much your medical bills are, and will not reimburse your medical expenses dollar for dollar. As with what was said above, if your hospital bills and post-surgery treatments exceed the assured sum, you will have to fork out the excess yourself.
To be reimbursed specifically for hospital bills and post-surgery treatments, you need to have hospital cash insurance and medical expense insurance plans.
A good plan to check out is the AIA Triple Critical Cover, which provides comprehensive CI coverage and a ‘Power Reset’ feature which restores your coverage amount back to 100% 12 months following a claim. You can even get up to 300% of your coverage amount for different CIs, and across all stages of the CIs.
It is important to consider getting critical illness insurance because if you are down with something, you will be unable to work for a long period of time and will have to depend on your savings or insurance payout to tide you over a few months. It will be financially taxing not just for you, but also for your family.
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