Asked by Anonymous
Asked on 18 Aug 2018
Recently I have been approached by my bank RM for needs assessment. And was recommended the AIA Triple Care Coverage with Sum Assured of $300k. It was poignant to see my mum grapple with breast cancer, which rendered her uninsurable since 20 years ago when she claimed her payout. All was well until the cancer recurred few years ago and expenses have since been adding up despite subsidised care. I am trying to make a comparison of the different plans available in the market but frequently ponder over the amount of protection I will need. FYI, I am a male non smoker with no medical history and ANB 35.
multi-pay critical illness plans typically come with higher premiums and a more complex set of terms and conditions.
you buy liao may be denied 100% payout or lesser
you must be very sure of the clauses
agents are pushing to sell multi-pay ci due to the commissions from the high premiums you will be paying
do your due diligence
To ensure the size of the payout is appropriate, you should consider the following factors:
your hospital bills have been covered: if you only have government hospital bills coverage, or partial coverage of hospital bills, you have to take some money from the payout to cover the co-payment costs (this is usually zero if you have hospital plan plus full coverage riders; you may need to set aside $15k onwards if you only have MediShield Life)
additional treatment bills: alternative treatment and additional medicines and appliances may exceed your hospitalisation coverage, hence you need the payout for this (this can range from $50k to $100k normally, and can be higher is you go for premium treatment methods)
caregiving costs: would you need to hire a helper, or engage someone to upkeep things in the house? (typical costs $1,500/month to pay for stay-in helper without government subsidies; amount is higher if you prefer home visit nurses)
income replacement: the money you need to cover daily expenses during the time you cannot work due to illnesses (depends on how much you're spending now, with corrections on how your expenses will change in the event of CI)
Just a side note, instead of getting multi-pay CI, I got a few CI plans with varying sum assured. Then depending on the severity of the CI, I'll claim from various policies. However, this option is more expensive compared to multi-pay CI plans. I plan it this way for myself because I prefer to have limited payment term for my CI coverage. :)
Hi Anon, wonderful to hear you're getting yourself covered for multiple stages of CI.
The rule of thumb for CI coverage is 3-5 X Your Annual Income.
I'm a IFA/broker and would suggest you look at Aviva's Multi Pay CI plan to compare.
Here's a Business Times article already with a comparison. https://www.businesstimes.com.sg/opinion/navigating-critical-illness-plans
If you would like quotes to compare and understand why you may require 3-5 X Annual Income as stated by the Life Insurance Association, drop me a message at https://www.facebook.com/HarizMaloy.
Do not buy insurance through an agent, whether they are independent or not. Buy direct insurance. You can get 30-50% cheaper for the same coverage. Go for plain vanila critical illness plan, the fanciful 'multiple payout', or 'early critical illness' are not worth it.
Also on how much protection u will need? As much as it makes yourself comfortable (comfortable with the amount of payout and premium that you have to pay). Depending on what 'critical illness' and the severity of it, recovery time can vary. If the illness takes 1-2years of recovery time, in addition you will lose the opportunity cost that you could have gain at work (promotion chances etc) Even if you managed to recover, your physical state might not be as before, so what will be future opportunity cost lost? 2yrs+2yr+3yrs? Just a reference for you if u really need a logical estimation.
If you would like to learn more, ping me at my https://www.facebook.com/s1bearz