Why A Critical Illness Plan Is More Important Than You Think
According to a 2018 study conducted by the Life Insurance Association, Singaporeans are woefully underinsured for critical illness, with economically-active Singaporeans and PRs being covered for only 20% of what they would need if a critical illness were to force them out of the workforce for five years.
This means there is a huge 80% gap between what the average person should be insured for and what he or she is currently getting. It also means that the majority of Singaporeans could potentially find themselves in financial trouble when critical illness strikes.
What is more, due to increased life expectancy and sedentary lifestyles, more and more Singaporeans are expected to be diagnosed with critical illnesses in the coming decades.
Critical illness insurance fills in the gaps left by MediShield Life and other hospitalisation insurance plans.
When you fall ill, MediShield Life and hospitalisation plans enable you to make claims for your medical bills.
However, they do not protect you from loss of income if you stop working. Don’t forget that in Singapore there is no state unemployment insurance, which means that if you stop working, your income from employment instantly dries up. And if you are indeed critically ill, it is unrealistic to assume you will be able to go on working.