facebookI'm considering getting critical illness coverage. Is a multipay plan necessary or is a single pay plan sufficient? Would it be better to get it as a term/life rider or as a standalone? - Seedly

Anonymous

15 Jan 2021

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Insurance

I'm considering getting critical illness coverage. Is a multipay plan necessary or is a single pay plan sufficient? Would it be better to get it as a term/life rider or as a standalone?

Discussion (3)

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It depends on how much coverage is enough for you. Multipay is very helpful in the situation of cancer as it may occure a few times. If you buy life plan, better to add it as a rider as the premium will be slightly cheaper.

Hi anon,

It really depends on your priorities. If you're looking at a plan that pays out for multiple occurrences, whether for different CI occurrences or relapses, then you may want to look at multi-pay CI plans. They also typically come with premium waiver riders that waives off your premiums upon diagnosis of CI To keep the plan going in the event you're unable to finance the plan. Your coverage will continue until the plan terminates and it typically also covers for other special conditions like gout etc. So its typically more comprehensive But can be more expensive.

A term plan typically offers a one-time payout (it can range in the millions) for a diagnosis of a CI. They might range on the cheaper end so if you're looking for a Low budget plan, a term plan works for you. Of course, once the plan pays out, your plan terminates and you will be unlikely to get any insurance without any form of exclusion, loading or rejection in your subsequent applications. Term plans are great for high coverage especially during your working years since they typically last for proxy 30 years or up till a certain age.

If Budget is an issue for you and you're looking for basic coverage, you can consider a term plan and add on a multi-pay plan subsequently. But if not, you might want to start off with a multi-pay plan since the plan continues upon CI diagnosis. At some point when your finance allows it, you can do both While adjusting your coverage based on your needs. I've known of people who had a CI diagnosis in their 20s so.. never say never.

Your CI coverage should be approximately 5x your annual income to cover for lost income in the event you're unable to work.

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Elijah Lee

26 Nov 2020

Senior Financial Services Manager at Phillip Securities (Jurong East)

Hi anon,

Before we decide if a single payout plan is sufficient or a multi pay plan is sufficient, ...

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