Many of us invest in healthcare and pharmaceutical stocks, including companies focused on cancer treatments and breakthrough therapies like Pfizer and Eli Lilly, for growth potential. However, few of us stop to consider how a critical illness diagnosis could impact our own lives, financial freedom and the legacy plans we’ve worked hard to build.
This article debunks six critical illness myths that may quietly undermine the legacy you’re working to build.
Myth #1: I won’t get a critical illness because I have a healthy diet and disciplined fitness regime.
A healthy lifestyle is important but it doesn’t make you immune to critical illnesses, which are a growing risk especially as our lifespans increase. In Singapore alone, every day sees an average of
- 46 cancer diagnoses1
- 34 heart attacks2
- 26 strokes3
While early detection and improved treatments mean better recovery outcomes, there are no guarantees against recurrence and new illnesses developing. For instance, stroke patients face up to 15% chance of recurrence,4 and early-stage breast cancer patients face up to 11% risk of relapse within five years.5
That’s why relying on lifestyle alone is not enough. Very often, critical illnesses are unexpected and it’s not unheard of for individuals with a clean health record to be diagnosed. When that happens, treatment costs and income disruptions can disrupt financial stability, making financial readiness crucial – not just in terms of covering medical bills but also preserving financial security and safeguarding the legacy you’ve worked hard to build.
#Myth 2: If you’re wealthy, your savings and medical insurance alone are enough to protect your legacy.
A critical illness can have a significant financial impact. Treatment and hospitalisation costs, ongoing care and income disruption can quickly erode cash reserves and force the sale of investments or assets intended for your legacy. Cutting-edge treatments like AI-powered diagnostic tools and gene-based therapies come at a high price. Immunotherapy for cancer can cost about S$9,000 per dose, with doses administered every two to three weeks.6 Over time, prices will soar, with the annual cost increase for cancer drugs at around 20%, compared to 6% for non-cancer drugs.7 It’s also important to note that not all cancer treatments are fully covered under Integrated Shield Plans, meaning that even deep pockets can be quickly worn by ongoing bills.
While medical insurance covers hospitalisation and treatment costs, critical illness insurance provides a lump-sum payout, giving you immediate liquidity to fund things like overseas treatment and living expenses without touching your long-term investments or family assets. This helps ensure your wealth remains largely intact, so that your legacy plan, be it charitable gifts or family trusts, can proceed as intended.
Myth #3: Critical illness insurance is meant for older people.
While the elderly are more susceptible, the reality is that critical illnesses are increasingly known to affect younger individuals. For instance, one in four stroke patients are under 60 years old,8 and the number of individuals under 50 years diagnosed with cancer grew by 10.4% in the five-year period between 2017 to 2021 compared to 2008 to 2012.9
Delaying critical illness coverage may not be a great idea. Once you’ve been diagnosed with an illness or develop certain risk factors such as high blood pressure or high cholesterol, coverage can become restricted, more expensive or denied altogether. By securing protection early, you lock in full coverage at lower premiums, ensuring that your wealth-building years aren’t disrupted. This strengthens your ability to grow, preserve and ultimately pass on more to the next generation.
#Myth 4: The policy will be terminated after the first claim.
Depending on the terms of your chosen critical illness plan, this may be true, especially with traditional plans.
However, there are now newer plans that better address critical illness risks in the population and provide continued protection. For instance, Singlife Multipay Critical Illness II continues to give coverage after the first claim, covering relapses and recurrences of different illnesses with up to 900% of the sum assured payable.
Multi-payout plans safeguard your liquidity across successive health challenges, ensuring that your estate plan or business succession strategy doesn’t unravel midway due to repeated financial shocks.
#Myth 5: CI plans only cover end-stage critical illness.
Some plans, especially older ones, are designed to cover just end-stage critical illnesses. Today’s market offers far more, from plans designed specifically to cover early-stage critical illnesses and others that cover early, intermediate and severe stages, giving you comprehensive protection from diagnosis through recovery.
Early payouts allow you to fund expenses that come with an early diagnosis, such as a second medical opinion or care arrangements, without dipping into investments earmarked for wealth transfer. It buys you time and flexibility, so that your financial freedom and your family’s financial independence are not compromised. Read: How early critical illness insurance helped a 30-year-old man diagnosed with brain cancer.
#Myth 6: I have a critical illness rider, so I don’t need a separate critical illness plan.
Riders, which are benefits added to a basic plan, come in different forms. It’s important to know if the rider is an additional or accelerated benefit before deciding if you are adequately covered.
- Additional benefit: The rider benefit is on top of your main coverage. Let’s say you have $500,000 death coverage and a critical illness rider with an additional $300,000 benefit. If you make a critical illness claim, you’ll receive a $300,000 payout and your $500,000 death cover remains intact.
- Accelerated benefit: The rider “accelerates” the death benefit, allowing you to receive part of it early as a lump sum if you’re diagnosed with a qualifying critical illness. So, if you have $500,000 death coverage and a critical illness rider with an accelerated $300,000 benefit and you make a critical illness claim, you'll receive a $300,000 payout and your death coverage will be reduced to $200,000
As a guide, individuals should have critical illness coverage equivalent to around four times their annual income10. While a rider is a good starting point especially if you’re young and just building an insurance portfolio, what’s important is that you have comprehensive and sufficient coverage that’s right for you at all times.
Meanwhile, a standalone critical illness plan typically covers a broader list of illnesses across multiple stages and recurrences, with higher coverage amounts. This makes them more effective for ensuring that your dependants, trusts, and estate planning structures can remain fully funded while your health needs are taken care of. In other words, your loved ones can inherit the wealth you intended, not the financial gaps created by illness. At the same time, your retirement funds won’t be touched.
Conclusion
Critical illness is not just a health risk but a potential legacy risk. Once you’ve reached a stage in life where you’ve built significant wealth and begun planning your estate, protection of that wealth becomes just as important as its growth. With people living longer and critical illnesses on the rise, even the most carefully constructed legacy strategy can be derailed if medical costs and income disruption force you to draw on assets meant for the next generation. Critical illness protection is therefore more than a safety net; it is a tool to preserve assets, maintain liquidity and ensure your family’s future remains exactly as you envisioned.
