How to select a suitable Critical illness plan from different insurers for myself?

Most insurers follow standard definitions for critical illnesses set by LIA, but the 2019 Framework would only be available in products next year (see here).

To shop for CI plan, you may like to look at the definitions of early-stage CI, which varies from one insurer to the other, and also any peripheral coverage that comes with the plan, e.g. diabetic complications, osteoporosis, which are not included in the CI listing. Pick the ones which offer the definitions that you can accept.

You should also size up how much coverage you need, and then check lastly if the premiums are within your budget.

Most insurers offer various plans to cover CI, so you will want to consider what sort of plan you'd prefer. To help you understand the market better, I will share my own experience with my clients. From what I have been assisting clients with so far, the most commonly obtained type of plans are (in no particular order):

1. Term plan (covering death/TPD) with a CI rider (Rider can be for late-stage CI, early-stage CI, multi-pay CI or a combination)

• Usually level premiums, which you pay for the duration of the plan

• Your coverage is for the duration of the plan and will be a level amount

• Once the plan ends, the cover stops. No claims mean no payout.

• Multi pay rider will allow recurring claims

• No cash value

2. Pure CI plan (can be multi-pay or a single payout)

• Usually level premiums, which you pay for the duration of the plan

• Your coverage is for the duration of the plan and will be a level amount

• Once the plan ends, the cover stops. No claims mean no payout.

• Usually negligible death cover

• May have a cash value

• Multi pay rider will allow recurring claims

3. Whole Life Limited Pay with CI Rider (Rider can be for late-stage CI, early-stage CI, multi-pay CI or a combination)

• Usually level premiums, which you pay a certain number of years (5,10,15,20,25 years)

• Your coverage is for life or till 99/100 and will be increased over time by the bonuses declared

• Option to boost coverage during your prime working years with a 'multiplier'

• For plans that cover till 99/100, should you be blessed with longevity, the plan will mature and pay you the coverage amount + accumulated bonuses

• Multi pay rider if added will allow recurring claims

• Has a cash value

Other less commonly purchased plans include, for example, CI plans that are aimed at helping people with pre-existing illnesses get coverage.

Seek to understand what sort of plan may suit your requirement so that you know how you are covered and what amount of payout you will receive under various scenarios. Once you have an idea of what type of plan may suit your needs, then you can narrow the search to the insurers that have such plans, and do a comparison across that particular type of plan.

Most insurers carry types 1,2 and 3, so you can get quite overloaded with the information available. Also, there may be still minor differences between the plans which will probably require an independent financial advisor who is well versed with the plans to explain the differences to you in order to help you come to a decision. For example, for Whole Life Plans with a multiplier, some insurers pay an inflation-adjusted payout, whereas some don't. Understanding these features may aid you to decide what kind of plan will suit you.