A guide to mortality and critical illness coverage in Singapore

The Life Insurance Association, Singapore (LIA Singapore) unveiled findings of the Protection Gap Study (PGS) 2017, which found that economically active individuals in Singapore have a combined S$893bn mortality and critical illness (CI) protection gap.

What is mortality protection?

Mortality protection coverage typically protects against financial loss by paying out a death benefit when the insured passes away. It usually also covers Total and Permanent Disability or Terminal Illness.

 

Types of coverage

  • Term Insurance
  • Whole Life Insurance
  • Investment Plan


Assess your needs and suitability, consider the following: 

  • age
  • coverage duration
  • exclusions
  • number of dependents

What is Critical Illness protection?

Critical Illness protection coverage provides you with financial protection if you are diagnosed with a major illness, and ensures that you and your family's needs continue to be met during your recovery period during the assumed CI recovery period of five years.

 

Types of coverage

  • Standalone Critical Illness plan
  • Rider (Supplementary benefit from a Mortality plan)


Assess your needs and suitability, consider the following:

  • conditions covered
  • coverage duration
  • exclusions (including family and medical history)
  • personal financial standing

What should I look out for when choosing a policy?

Is mortality protection necessary?

Mortality protection is necessary in financial planning as it is usually used for:

  • Expenses incurred upon the insured's death (e.g funeral expenses)
  • Mortage loan for family's home
  • Securing financial future for family and protect their standard of living

What is the difference?

MediShield Life and Integrated Shield Plans (IPs) vs. Critical Illness Plan
 

MediShield Life & IPs
Hospitalisation and surgical plans that provide coverage for inpatient, pre- and post- hospitalisation expenses

ElderShield
Severe disability insurance scheme providing monthly payout for a period of time for citizens and PRs above 40 with Medisave Accounts

* "Severe disability" is the inability of an individual to independently perform at least three of the six Activities of Daily Living (ADLs) including washing, dressing, feeding, toileting, walking and transferring, with or without mobility aids (e.g walking aids, wheelchair). This means that the individual will require the physical assistance of another person for the ADL. Source Ministry of Health (MOH)

Source: LIA Protection Gap Study 2017

Critical Illness Plans
Provide a lump sum payout for all financial needs and obligations not covered under hospitalisation plans

Protection priorities at different life stages

Young adults

Mortality & CI protection of moderate priority

Encourage to start early when one is healthy and premium is most affordable as prremiums increase with age

Sandwiched population

Mortality & CI protection of heightened priority with increased liabilities and family commitment

  • Sufficient coverage required for age parents
  • Sound financial planning to support priorities such as home loans or childrens' education

Sole bread winners families

Mortality and CI protection of critical priority to safeguard family from unexpected loss of income

Ensuring family savings will not be wiped out should an unfortunate event happen to the breadwinner

Retirees

CI coverage is of higher priority due to increased health issues with age

Having adequate health protection cushions the cost of medical treatment, ensuring quality of life without digging into savings

Mortality Protection coverage vs. CI Protection coverage: Which is more important?

Both mortality and CI protection are equally important as they meet different safety needs

Mortality coverage

Provide financial support for the family to sustain their lifestyle without major disruption

CI Coverage

Alleviates financial distress in the event of major illnesses which can result in loss of income

What can I do for a start?

1

Talk to a financial consultant

Talk to a financial consultant to map out your protection needs and gaps.

2

Check your mortality protection gap

Check your mortality protection gap using the Protection Gap Calculator available here.

3

Find out what suits you

Compare and find life insurance products suited to your financial objectives here

Want to find out more about Critical Illness insurance?

Leave your details below to find out more about critical illness insurance.

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