There are now a flood of many early-stage critical illness plans in the recent 2–3 years. This plan is considered part of the suite of health insurance. But what is the priority shall we give to it compared to the hospitalisation and surgical plan? And also to the traditional critical illness plan that pays upon more advanced stage of the critical illness?
Being a layman and not a professional doctor, we may not be able to fully understand the definition of the early-stage, intermediate-stage and the advanced-stage critical illness. However, the probability of claim experience and the limit it imposes may shed some light.
First thing first, the most important insurance plan for anyone to get is the hospital and surgical plan. This plan reimburses the medical expenses that you incur in the hospital, regardless of the seriousness of the illness. You can be warded for observation, dengue fever, accident etc. Hence, the coverage is very wide. The premium is also affordable with the main plan payable using CPF Medisave. It is best to get the Private Integrated Shield Plan that offers the “As Charged” feature. As there is the deductible and co-insurance, you can buy the rider to cover these gaps using cash. It is good to get this even for young baby or even if you have company insurance. This is the health insurance that requires very stringent underwriting. You need good health to be covered completely without exclusion.
Next, let us look in the early-stage critical illness plan and the traditional critical illness plan.
In general, the early-stage critical illness plan only payout 25% or 50% of the Sum Assured, and there is a limit on the maximum claim, no matter how big is the Sum Assured. Early-stage critical illness may be able to be treated at hospital. Patient will then most likely to be sent home to recuperate for half to three months. Hence, if you are employed with hospitalisation leave benefit given by company, there is no loss of income during this period. There is, however, long-term medication, that you may need to take for a few years. The early-stage payout money may then be useful for the medication.
However, since the early-stage payouts is mostly limited in value, this may suggest that it is not so serious that a person will be out of job for a long period of time, and hence to cover for loss of income. Notwithstanding this, such plan may be useful for the self-employed. This is because any number of days or weeks of recuperation with no income can be alleviated from the payout from such plan. Do note that early-stage critical illness plan is normally 20–60% more expensive than the traditional critical illness plan, as it needs to price in the higher chance of claim.
Next, we observe that the payout from the traditional critical illness plan does not impose the percentage of payout on the Sum Assured. And the maximum coverage is based on your Income Level and age. Therefore, the consideration by the insurance company is really to assess in the event of such advanced critical illness, how many years of income would you want to cover yourselves before you are well enough to go back to work. It is this kind of critical illness that may derail a person’s life.
From the above, it is recommended that the priority of getting the health insurance is to get
• Hospital and Surgical Plan (e.g. As-Charged Shield plan)
• Traditional Critical Illness Plan
• Early-stage Critical Illness Plan
If you have the budget after getting the first two plans with sufficient coverage, it will be good to get the early-stage critical illness plan as it plug the little gap in the traditional plans offered in the market. It gives you more peace of mind when an illness is discovered, regardless of the severity of the critical illness.