Anonymous
Was reading how some financial advisors were saying the 10 early CI covered by mindef aviva term insurance riders were not enough.
Was also thinking whether i should complement the early ci rider on mindef aviva term insurance with another multipay CI policy from either aia or aviva
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Pang Zhe Liang
10 May 2020
Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)
Statistics
Looking at statistics from Ministry of Health, the top 3 principal causes of death are
Cancer
Pneumonia
Ischaemic Heart diseases
More Details: https://www.moh.gov.sg/resources-statistics/sin...
In like manner, these principal causes of death are critical illness related conditions. Hence, we may infer the probability as such.
Factors for Consideration
For critical illness coverage, here are some factors for consideration:
Number of covered conditions (LIA has a guideline to cover 37 major critical illness conditions, AIA covers 43 major critical illness conditions and a total of 175 when we include early critical illness)
Probability of occurrence / detection
Claim experience
Definition for payout
For this purpose, the key question will always to be able to find one that brings the right value.
By far, all my clients prefer to have critical illness coverage with a broader definition for payout, as compared to one with complicated terms and conditions. This is because all my clients prefer to focus on recovery, rather than to fight the technical jargons.
Hence, you may wish to research along the same path as well.
How much insurance coverage should You have?
As a general rule,
10% to 20% of your annual income on healthcare insurance and life insurance
Basic Life Cover = 10 times your annual income
Critical Illness Coverage = 5 times your annual income
For your case, one of the most important things to do is to have a complete understanding of your existing insurance portfolio. Through this process, it allows us to understand the coverage that we have, any financial gap, as well as to find out whether we are overpaying for our insurance policies.
Key Reasons Why:
Why Every Client needs an Insurance Policy Summary
Thereafter, we will discuss and plan in a way such that you will become confident of your insurance coverage.
I share quality content on estate planning and financial planning here.
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Elijah Lee
09 May 2020
Senior Financial Services Manager at Phillip Securities (Jurong East)
Hi anon,
To be honest, there's no telling if we will ever contract critical illness, let alone know...
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Hey there!
In general, the most common critical illnesses will be cancer and heart attack. The cancers differ from people and gender (of course), and there will be certain conditions that are relatively prevalent too, eg. Type-2 diabetes, hypertension etc. Multi-pay CI plans nowadays cover pre-early conditions (benign tumours) and special conditions eg. osteoporosis, diabetic complications etc so that is definitely a win. And do make sure you note the premium-waiver rider conditions if you are looking at multi-pay CI plans: some premium-waiver riders only waive off premiums at severe stage of CI.
You will need to consult an advisor to review your coverage to see what is within your budget. But do take note that you should be getting a multi-pay CI plan as early as possible since it usually gets more expensive with age.
Financial planning is an integral part of life. You can reach me at this platform to find out more.