So what is this "CI" and should you care about it now, later or never?
Here's the lowdown…
CI stands for "Critical Illness"
A critical illness plan pays out a lump sum upon the diagnosis of a medical condition which is covered in your policy. And there are specific definitions of what exactly is considered a critical illness. This CI benefit can be sold as a stand-alone plan or as an optional rider to a life policy. A "rider" is an add-on to your basic insurance plan so that you get extra coverage.
The types of critical illnesses covered may vary from one insurer to another. But most major illnesses such as cancer, heart attack, stroke and kidney failure are covered by almost all policies.
Typically, CI cover comes in the form of a rider but . there are also basic plans in the market that cover for critical illnesses and more. For example, Singlife's MyFamilyCover gives you an option to be covered for not just CI but also Death, Terminal Illness (TI) and Total and Permanent Disability (TPD).
Benefits for CI plans are usually payable in one lump sum which can come in handy when you're faced with hefty medical expenses .. But plans such as Singlife's MyFamilyCover offer a monthly payout feature so that you'd have a steady flow of income to serve your and your family's regular needs such as monthly bills and expenses. This is also something to consider if you don't want to be worrying about whether your family can manage the lump sum payout to last an adequate period of time.
So now you know what CI means and how it works. That's the simple part.
Now comes the part about making a choice.
To CI or not, that's the question.
Let's face it; things aren't the same way they used to be in our parents' or even grandparents' generation. It's become pretty common (or perhaps because of the speed with which Facebook and Twitter spread news…) we're hearing of more and more friends, family members and acquaintances succumbing to all types of illnesses – pretty serious ones too.
In fact, here are some numbers for you…
- 33 people are diagnosed with cancer every day in Singapore1
- Stroke is the largest cause of long-term physical disability in Singapore2
- Singapore has the 5th highest rate of kidney failure in the world3
When faced with odds like these, can you afford not to have a financial safety net for yourself and your family?
When you get hit with a critical illness, there are two things you need to worry about – paying for your actual treatment costs and covering your day-to-day living costs. Remember, this isn't a standard bout of flu. You could take 6 months, 12 months or longer if you're recovering from heart attack or cancer. During this time, you may not be able to work or receive a paycheck. But that doesn't stop the need to pay your mortgage, utility bills or put food on the table for your family. While health insurance may take care of hefty treatment costs, taking out a CI plan offers a lump sum payout so that you can take care of your living expenses and bills if you're unable to work.
All of us would like to see ourselves as being healthy and able-bodied for the rest of our lives but the truth is, no one can predict the future. Critical illnesses are often prolonged, involve major surgery and might require a long recuperation period which can drain your finances.
This might seem like a doom and gloom outlook but preparation is always best made when you're in your prime of health and when you can afford to pay for the right type of insurance that can help, if ever the worst happens.
1 Singapore Cancer Registry, Interim Annual Registry Report, Trends in Cancer Incidence in Singapore, 2009-2013.
2 Singapore National Stroke Association.
3 National Kidney Foundation, Singapore.