Is Early Critical Illness Insurance Necessary? Coverage & Benefits

If you are one day diagnosed with a life-threatening health condition, chances are, it will be one of a few common critical illnesses.

According to the Ministry of Health, the principal causes of death^[1] in Singapore are cancer, pneumonia and ischaemic heart diseases including stroke and hypertensive disease. In 2022, 23.9% of deaths in Singapore were due to cancer.

As you can see, while there are myriad health conditions out there, an overwhelming number of deaths result from a much smaller list of illnesses. This narrows down the possibilities, making screening and detection a viable way to monitor your health.

Early detection of these illnesses can significantly improve your chances of successful treatment and recovery. Early-stage critical illness insurance in Singapore can provide financial support for these screenings and any necessary treatment.

Why is it important to detect critical illnesses (CI) early?

What is early critical illness? It refers to the initial stages of a serious medical condition, such as cancer or heart disease, where early detection can significantly improve treatment outcomes. Early detection can be the difference between life and death.

Improve survival rates

In fact, when it comes to cancer, survival rates in Singapore have grown thanks to advancements in medical technology—and improvements in screening.^[2]

A 2022 news report^[3] indicated that the cancer survival rate in Singapore has grown to almost 60%, up from 18% in 1968 when the Singapore Cancer Registry first began tracking population-based cancer trends.

Early intervention is key

According to the Singapore Cancer Society, screening enables the detection of early signs of cancer or pre-cancerous conditions before the appearance of symptoms^[4]. It is important not to wait until symptoms appear, as the disease will often have reached an advanced stage by that point. The sooner cancer is detected, the better the potential outcome, as cancers are more treatable if detected at an earlier stage.

But cancer is far from the only condition whose outcomes can be improved by early detection. Take heart disease, another of Singapore’s top causes of death, for example.

An estimated one in three Singaporeans may have underlying early heart disease without knowing it, according to a 2023 news report^[5], which could be why the condition is often dubbed the “silent killer”. Early heart disease can lead to more serious cardiovascular diseases like heart attacks and stroke, from which 23 people in Singapore die every day^[6].

Picking up on the early signs of heart disease can thus help a patient make lifestyle changes that can lower their risk of cardiovascular diseases later on.

While the detection of a critical illness can bring significant health worries, there are also treatment costs in Singapore to contend with, as well as lifestyle changes and potentially a loss of income. To address this, most people will consider and sign up for a critical illness insurance plan.

The protection gap with critical illness insurance plans

Critical illness insurance plans are one of the most important tools to protect yourself from serious health conditions.

Such plans offer a lump sum payout if you receive a diagnosis for one of the critical illnesses covered by the plan. The payouts enable you to pay any out-of-pocket medical costs that might not be covered by other insurance plans, and also offer financial support so you can maintain your household and focus on recovery, enabling you to take a break from work if necessary.

However, the problem with many critical illness plans on the market is that they do not have coverage for early stage illnesses. That means you will only be able to receive a payout from the insurer if your disease reaches an advanced stage. This is cold comfort when we consider that the ideal situation would be to detect the disease at as early a stage as possible in order to enjoy the highest chances of recovery.

To make matters worse, there is already a big protection gap for critical illness in general. The Life Insurance Association’s Protect Gap Study 2022^[7] has determined Singapore’s critical illness protection gap to have been 74% in 2022.

This means that on average, there is a 74% gap between Singaporeans’ critical illness protection needs and the coverage amounts they actually have.

What can we do to bridge the gap?

The protection gap becomes less clear when it comes to early critical illness, since many critical illness insurance plans in Singapore simply do not offer coverage at early stages of the disease.

So, is early CI important? The Protection Gap Study 2022 has acknowledged that one of the limitations of its findings is that the data related to the time needed to return to work after a major illness did not necessarily also apply to early critical illness patients, who do not typically require hospitalisation in the Intensive Care Unit (ICU) and therefore might not be as unable to work as those of late-stage patients.

It would be a mistake to think that insurance coverage is less important at an early stage of a critical illness. Being able to access a payout at an earlier stage of a disease frees up your resources to seek treatment and concentrate on recovery without having to compromise your health further with work-related stress or worries about finances.

At this point, you might be asking yourself “should I buy early critical illness insurance?” To help you decide, let’s explore the different types of early critical illness plans available.

Types of early critical illness coverage

Term plan

A standalone early critical illness term plan or a health insurance term plan with an early critical illness rider provides coverage for a specific period, such as 10, 20, or 30 years. It offers a payout if you are diagnosed with an early stage critical illness covered by the policy.

Pros:
- More affordable than a whole life plan with early CI coverage.
- Provides coverage during your working years when you may have greater financial responsibilities.
Cons:
- Coverage expires at the end of the term.
- Premiums may increase upon renewal.

Whole life plan

A whole life dedicated early critical illness insurance plan or a whole life insurance plan with an early critical illness benefit offers lifelong coverage and may include a savings or investment component.

Pros:
- Lifelong coverage provides comprehensive protection.
- Potential cash value accumulation can be used for various purposes, such as retirement planning.
Cons:
- Generally more expensive than term plans with early CI riders.
- Cash value accumulation may take time to grow.

Multi-claim critical illness insurance plan with early coverage

A multi-claim critical illness insurance plan with early CI coverage allows you to make multiple claims for different critical illnesses, including early-stage diagnoses, up to a specified limit.

Pros:
- Offers the most comprehensive protection against a wider range of critical illnesses at all stages.
- Allows you to make multiple claims for different critical illnesses, including early-stage conditions.
- Provides financial support for various treatment options and recovery needs.
Cons:
- Can be the most expensive type of CI plan.
- May have limitations on the number of claims or the total payout amount.

Ultimately, the most comprehensive solution is to opt for a critical illness insurance plan in Singapore that covers you for both early and late stages of covered diseases.

Take HL Assurance’s Early Protect360 Plus, for example. The plan offers coverage for early and advanced stages of covered conditions. That means you can take advantage of screening to catch diseases promptly, and fully devote yourself to recovery even at an early stage of a covered critical illness.

How to choose an early CI plan

How much early critical illness coverage do I need?

Determining the right amount of early critical illness coverage is crucial to ensure you have sufficient financial support during your recovery. Here are some key factors to consider:

Income and expenses: Evaluate your current income and essential expenses, such as mortgage payments, bills, and daily living costs. Consider how much income you would need to replace if you were unable to work due to a critical illness.
Recovery period: Estimate the length of time you might need to take off work or reduce your working hours to focus on recovery. This will help you determine the duration of financial support you’ll need.
Existing coverage: Assess any existing insurance policies you have, such as an Integrated Shield Plan (IP) or MediShield Life, to understand the extent of your current coverage for medical expenses.
Financial goals: Consider your long-term financial goals, such as paying for your children’s education or maintaining a certain lifestyle. Ensure your coverage aligns with these goals and provides sufficient protection.

By carefully considering these factors, you can gain a clearer understanding of how much early critical illness coverage you need to adequately protect yourself and your loved ones.

Calculating your ideal sum assured/payout

So, how can we work out our protection needs to close the protection gap? In order to close the gap, you should ensure that your and your dependents’ financial needs will be fully covered should something happen to you.

According to the Protection Gap Study 2022, the average critical illness protection needs in Singapore are about 3.9 times of annual income, calculated based on a 5-year recovery period. This is assuming the person already has most of their medical expenses covered by an Integrated Shield Plan (IP) and/or MediShield Life.

In other words, if you earn an annual income of $60,000, you should be aiming for a sum assured of at least $234,000 ($60,000 x 3.9). This protection should be sufficient to ensure you can afford to take five years off work to recover from a critical illness.

Early critical illness insurance in Singapore that protects you at all stages

HL Assurance’s Early Protect360 Plus offers a payout equivalent to 100% of your sum assured for early and advanced stages of covered conditions.

The plan covers top killers including major cancers, stroke and heart attack at both early and advanced stages.

The best part? The payout remains the same regardless of the stage of your disease, incentivising you to get screened regularly in order to catch health conditions as soon as possible.

The plan also offers an ICU benefit equivalent to 20% of your sum assured if you are admitted to the ICU.

HL Assurance’s Early Protect360 Plus is suitable for people of all ages. Coverage is offered up to the age of 99, so even older people can receive instant protection.

Get immediate early critical illness and critical illness coverage by purchasing HL Assurance’s Early Protect360 Plus online, without having to go through a health examination. There is currently a 20% launch discount that enables you to get the protection you need at a more affordable price.