Do you need critical illness insurance if you already have existing integrated shield plans?

“I am adequately covered for critical illness (CI).”

That seems to be the common perception for many of us because there are many plans in the market such as the integrated shield plans that help cover us for hospitalisation or treatment-related costs. For some of us, owning a separate CI plan may not seem necessary if we already have an existing integrated shield plan. But is that really the case?

According to the 2017 Protection Gap Study by the Life Insurance Association (LIA) Singapore, the average protection need for critical illness in Singapore is 3.9x of one’s average income and the current average protection gap is 3.1x. As for mortality, the average protection need is 9.0x of one’s average income, which leaves a current gap of 2.1x. In other words, an average Singaporean is not getting the sufficient financial protection needed to cover expenses and maintain a reasonable lifestyle for dependents following an unfortunate episode.

In this article, we discuss how CI plans serve a different purpose from integrated shield plans.

Getting CI coverage

Let’s start by looking at common plans that offer CI coverage. Two examples are standalone CI plans and life insurance with a CI rider.

For standalone CI insurance, it provides a payout during a CI diagnosis and gives you the flexibility to use it for critical illness treatment and medical costs, or to even support you and your loved ones with the loss of income. Some plans cover late-stage CIs, early-stage CIs or even all stages.

Life insurance is designed to mainly help support your dependents when you are unfortunately not around anymore or in the case of TPD. For additional protection, they may also offer CI coverage as part of the base plan or as a rider.

Find out what you need to know more about CI insurance.

How integrated shield plans differs from CI insurance

CI insurance have a different purpose from integrated shield plans. For some individuals, integrated shield plans are useful and can serve as a sufficient asset for financial protection. For others, they may feel that it is insufficient because there are limits to what these plans can cover and are meant for specific purposes. Very often, integrated shield plans cover you specifically for hospitalisation or treatment-related costs.

Integrated shield plans help with hospitalisation costs or outpatient treatment fees, while a CI plan provides a payout that allows more flexibility in how you use the cash. On top of using it to pay for medical treatment, it can support you in ways such as income replacement or other financial responsibilities.

It is important to be sufficiently covered in the event of a CI diagnosis. Individuals who have a family medical history for certain conditions such as heart disease, stroke or cancer may also want the added assurance.

To illustrate how CI insurance works, let’s take John as an example. John, a father of two young children, signs up for FWD Critical Illness Plus insurance with a sum insured of S$200,000. He suffers from a stroke, gets hospitalised for a week and receives a 100% payout. With this amount, he can take a break from work after his hospitalisation and focus on recovery while taking care of bills, his children’s school fees and more. His monthly expenses of roughly S$5,000 are taken care of for several months. With the added financial support, he does not need to fork out money from his own pocket and is still able to save for his other life goals such as sending his children to university. On the other hand, if he was only covered with a hospitalisation plan, it would only cover a proportion of the cost of his hospital stay.

Being covered with a CI plan ensures that you can focus on recovery and that you are taken care of financially if you are diagnosed with a CI.

Deciding if you need CI insurance

Integrated shield plans and CI plans serve different purposes. To decide if you need CI insurance, evaluate your needs and what type of coverage you’re looking for.

If you’re looking at CI insurance, an example of a plan that covers both early and late stages of CI is FWD Critical Illness Plus insurance. In addition to the list of 37 late-stage CIs by LIA, it also covers you for early and intermediate stages of cancer, heart attack and stroke, the three most common illnesses that make up 90% of all CI claims¹. This means that you will not have to wait for an illness to develop into its late stages to make a claim. With early intervention and treatment, recovery rates are also better.

With 100% payout upon a claim, the financial support gives you the added assurance that your financial responsibilities are taken care of as you focus on recovery.

The plan also offers continued coverage even beyond your first Early Cancer, Heart Attack and Stroke Benefit claim² and the optional Premium Waiver Benefit allows you to enjoy the coverage after your claim without having to pay your premiums.

If you would like to enhance the plan even more, the optional ICU Benefit provides a 100% payout of your sum assured in the event that you are admitted to the ICU for a duration of at least 5 continuous days with invasive life support due to whatever illness that you have.

Getting protected is easy with no medical examination required. You can conveniently get a critical illness insurance quote and buy online directly.

¹ Source: Gen Re’s “2012 Dread Disease Survey”, published in 2015.
² After an auto-reload period of 12 months. For more information, refer to the FWD Critical Illness Plus policy wording.