CI 101 – all you need to know about this crucial cover

Aviva April 27, 2018 0
CI 101 – all you need to know about this crucial cover

A guide to mortality and critical illness coverage in Singapore 

What is mortality protection? What is critical illness protection?

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Mortality coverage

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.

Critical illness coverage

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.

What should I look out for when choosing a policy?
Types of coverage Types of coverage
Term Insurance Whole Life Insurance Investment Plan Standalone CI Plan Rider (Supplementary benefit from a mortality plan)
Assess your needs and suitability, consider the following:
Age, coverage duration, exclusions, no. of dependents
Assess your needs and suitability, consider the following:
Conditions covered; coverage duration; exclusions (incl. family & medical history); personal financial standing
 Is mortality protection necessary? What’s the difference?
 Mortality protection is necessary in financial planning as it is usually used for:  MediShield Life & Integrated Shield Plans (IPs) VS ElderShield VS CI Plan
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  • Expenses incurred upon the insured’s death (e.g funeral expenses)

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  • Mortgage loan for family’s home

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  • Securing financial future for family and protect their standard of living

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MediShield Life & IPs

Hospitalisation and surgical plans that provide coverage for inpatient, pre- and post- hospitalisation expenses

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ElderShield

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

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CI 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 Sandwiched population Sole bread winners families Retirees

Mortality & CI protection of moderate priority

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

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

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

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

Provides 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 to map out your protection needs and gaps

 

2. Check your mortality protection gap using the Protection Gap Calculator available at: www.lia.org.sg/pgc

 

3. Compare and find life insurance products suited to your financial objectives at: www.compareFIRST.sg

 

 

*“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

 

To speak to a financial adviser representative to address your mortality & CI gap, leave down your details below and we’ll be in touch.

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