What is a multi-claim critical illness plan. Is more payout better?

Being covered by a multi-claim critical illness (CI) insurance is one way to stay financially protected for CIs across all stages and beyond the first diagnosis.

Most multi-claim CI plans provide coverage for CIs, from early and intermediate stages to late stages. Unlike single-claim late-stage only CI plans, this means that you can also make a claim for a CI at its early stage and remain financially protected beyond that first CI claim. It is a feature that is important for many as it is harder to get coverage with a pre-existing illness and a multi-claim plan provides that added financial assurance.

With a multi-claim plan, you’re ensuring that you remain financially protected even after your first claim¹

Read more: How do you stay prepared if critical illness strikes more than once

Recommended coverage for critical illnesses 

The Life Insurance Association (LIA) Singapore suggests a critical illness protection need of 3.9x the average annual income amount for working adults. This takes into consideration the financial demands of household expenses and lifestyle maintenance during the period of a CI recovery.

When evaluating your protection need, it is important to consider factors beyond covering your medical expenses. The financial support from an insurance payout also gives you the flexibility to replace your income, fulfil your other financial responsibilities to your family and loved ones, sustain the quality of lifestyle, and more.

Understanding sum assured, types and number of payouts

When figuring out how much coverage we are looking for, we must first understand the differences between the sum assured, the types of payout and number of payouts in multi-claim plans.

Sum assured: This refers to the coverage amount that’s payable when the insured event occurs.

Types of payout: The first type is by partial payouts. You can receive partial payouts of your sum assured via claims, up to 100% or more of the total sum assured. For example, your first claim is 50% of your sum assured, totaling to a maximum of 100% of the sum assured.

The second type of payout allows for 100% payout of the sum assured each time you make a claim. For example, your first claim is 100% of your sum assured and your second claim can be up to 100% of the sum assured as well.

In the market, you may also see plans that offer payouts of more than 100% the sum assured upon a claim.

Number of payouts: As for the number of payouts, it depends on the feature of the plan. For example, some plans provide up to six payouts upon a claim, while others provide a maximum of two payouts upon a claim.

So, how much coverage is enough?

Different people have different financial protection preferences. As with other insurance plans, assessing your own needs is the first step to gauge the right coverage suitable for you. Assess what kind of financial responsibilities you would have to fulfil.

If we are looking at having continued protection for the long run, having a plan that offers a high number of payouts may seem like the better option. It means that it offers you longer-term coverage for multiple recurring CIs. However, these plans may come with certain terms and conditions, and specific exclusion clauses that requires more of your attention and time to understand clearly.

Such plans are also usually more expensive, given the extent of coverage and number of claims it covers. One should evaluate whether it is necessary to opt a plan with greater number of payouts, considering the likelihood of being diagnosed with a CI in a lifetime as an example.

Read more: What you need to know about critical illness (CI) insurance

Consider your budget

In general, multi-claim plans cost more than single-claim CI plans. It is important to evaluate the different plan options and your financial situation before deciding on the plan that best fits your needs.

With your decided budget, plan and decide how much you want to set aside for your critical illness (CI) insurance.

To conclude, evaluate your needs, coverage and cost

Take the first step to secure your future. CIs can happen to anyone at the least expected moments. It is critical to explore the different CI protection options and get financially protected. Before you decide on the CI plan, it is important to weigh the costs of different multi-claim CI plans and the amount of coverage that best fits your needs.

An example of a multi-claim CI plan that protects policyholders beyond the first CI is FWD Critical Illness Plus insurance.

In addition to coverage for 37 late-stage CIs, it also covers early and intermediate stages of cancer, heart attack and stroke, the 3 most common illnesses that make up 90% of all CI claims². The plan offers coverage of up to S$300,000 and the policyholder continues to be covered beyond the first claim³. With the optional Premium Waiver Benefit, you also enjoy the coverage after your claim without having to pay your premiums. Not only that, FWD Critical Illness Plus offers an optional ICU Benefit that provides a 100% payout of sum assured if the policyholder is admitted to the ICU⁴ due to any illness that you have, including new or emerging illnesses too.

The plan can be purchased with a simple health declaration online, with no medical examination required. Find out more about FWD Critical Illness Plus insurance.