Before even understanding and knowing that how much critical illness coverage you need in the countries like Singapore, first let us know how critical illness insurance works in detail.
How does a critical illness insurance plan work?
As we all know the critical illness insurance is yet another type of health care insurance in which the main focus is on the claims provided after getting diagnosed with any critical illness disease like organ damage or stroke, etc.
The critical illness insurance plans, as its name suggests, it enables the policyholder to claim the insurance money after when they are treated with any of the disease listed in the insurance agreement.
Under the plan of critical illness insurance, the insurance company or insurer will pay out the policyholders the grand total of all the medical expenses with regards to the sum of hospitalization, medical care, health treatment and/or the cost of surgeries also.
But first, the policyholder has to keep on investing a specific amount of money on a fixed interval of time for the required time span.
So that means, to ensure the medical claims, you have to pay out to the insurance company, which is quite a normal procedure for all the other types of insurance plans like life insurance and care insurance.
Apart, critical illness or (CI) insurance generally helps to make sure that you are well-prepared with all the 37 types of critical disease as defined by the Life Insurance Association of Singapore or (LIA).
Although, if you are one of those who thinks that critical illness insurance is not worth it, then you are probably underestimating their importance on your financial status.
So, after you take on the decision to get the critical illness insurance plans, then you will get the option of how much critical illness coverage you need. To be honest, it depends upon more than one factors. Let us dive deeper and know the factors in order to determine how much critical illness cover you need in Singapore.
- Income and savings
Most of the times, you will face problems deciding the right amount of critical illness insurance you need. This is because most of us forget or literally ignore other factors like income and savings.
Yes, your income and savings are interconnected with the illness covers you need in the countries like Singapore. It is quite simple as you could have ever imagined. Above all, you just have to calculate the total monthly and/or daily income of yours. Including any other source of income apart from the main source will help to deliver an accurate estimation for sure.
Moreover, you should not forget to take into consideration the total expenditure. Sum up the monthly expenditure and other types of expenses and figure out the amount of money left after spending the income.
Suppose you are capable enough of saving more amount than go for quality coverage over critical illness insurance. For those who can barely get the savings done, there are options for them also.
- Consider the recovery expenses
Before determining the recovery expense, let us know the definition first.
A recovery expense is the amount of money required to spend on the health treatment or otherwise, to invest in medicines, etc., to get fully recovered. However, most of us will definitely ignore this crucial factor.
It is not a surprising fact that almost all critical illness insurance policyholders completely ignore some other types of medical expenditure when they are being diagnosed with critical illness disease. And they all end up paying out extra for other health expense.
One should not forget the fact that CI insurance is dissimilar to that of foreign domestic worker insurance. Unlike worker insurance, critical illness plans are much more complicated when it comes to determining the coverage factor.
So, if you don’t pay out medical bills and the total cost of supplements, medicines as well as other related expenditure, look for a good amount of CI insurance coverage. Above all, you may hire personal assistance or a nurse for some critical illness.
This is why when it comes to full stage CI coverage, Hong Leong critical illness plan will definitely help you out.
- Debts and loans
If you have not engaged with any type of loans or debts, then ignore this factor. However, if you have borrowed a loan and already in a huge amount of debt, then you must probably think about them before knowing the coverage of critical illness insurance.
Paying out loans on a monthly basis and planning to get good critical illness covers will not going to work hand in hand if you don’t have the required monthly income. Let us understand with a quick example.
So, suppose, if you are under debt and the monthly repayment amount is somewhat around 1000$, then it will count up to 60000$, which more than enough to consider if you are figuring out the critical illness coverage you must have.
- What LIA suggest?
The pay-outs for critical illness insurance works totally different and completely depend upon your insurance providers.
When it comes to the CI insurance, there is no fixed plans or policy. You have to tailor the plans according to your need and health requirements.
The LIA or Life Insurance Association in Singapore recommends that an average Singapore’s citizen has a critical illness insurance cover of $316,000. And if we talk about the medical expenditure of cancer or organ failure, the total is somewhat around 4 to 5 lakhs of dollars without even including any other medical expenditure.
In short, one should consider the recommended amount by the LIA as a loose figure just for the guideline and not the goal. The term ‘Average citizen’ is just an undefined concept. After all, there are different needs of every Singaporean. And guess what? Most of us face different challenges and circumstance.
For example, if you are the only person who is earning, then the needs and the coverage value will be dissimilar to that of the LIA suggest amount.