24 Oct 2020
Also, would it be better to get a standalone one-time claim ECI plan or a multipay one? Thanks for the help!
TM Earlycover is designed to cover early-stage critical illness. It covers up to 129 medical conditions with a S$350,000 lump sum payout for early-stage critical illness. This is a single claim policy which means that after your first claim, the policy will be terminated and you won’t be covered anymore.
As you mentioned, there are also multi-pay critical illness policies. The main feature of these plans is the ability to make multiple claims. This ensures that you’ll continue to be covered even in the event of a relapse or re-diagnosis. However, given the increased coverage, the premium for these multi-pay plans are generally more expensive compared to a single payment plan. Some examples of multi-pay critical illness plans include Tokio Marine MultiCare and Aviva MyMultiPay Critical Illness Plan III.
Aside from the financial aspect, it is also important to consider your family’s medical history. If your family has a history of a certain critical illness with a high incidence of recurrence, such as cancer, it might be good to consider multi-pay plans.
For more information, you can refer to this article for factors you can consider while deciding on a critical illness plan.
The description 'better' is very broad but let me try and give you my perspective.
Generally for early stage critical illness, there is higher probability of recovery. Consequently, we need to understand whether this condition (which has been treated) will lead to exclusion or loading in the future.
For example, if it is early stage cancer, then there is a chance that you may not get the same level of insurance coverage again. In this situation, a multi-pay coverage ensures your insurability interest to that end.
However, the question is, are you willing to pay a higher premium for your future insurability interest?
On the other hand, you may use the same budget to get a higher sum assued for a single-pay early critical illness coverage. In this case, it may become possible to apply time-value-of-money to make some sense out of this single lump sum payout.
That being said, are you willing to forgo the financial leverage that you get to enjoy in the future?
Finally, I just want to bring your attention to the fact that the Life Insurance Association Singapore (LIA) does not mandate the scope of coverage for early Critical Illness. In other words, the insurers have the flexibility to decide what conditions to cover, as well as the definition for claim. Therefore, this may be a point for consideration in your planning. Here is some information about it: Life Insurance Association Singapore (LIA) Critical Illness Framework 2020
Above all, I believe comprehensive financial planning will give you confidence in how you plan your insurance portfolio for the future. Take care!
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