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Alex Ang

If you are thinking of getting Critical Illness (CI) coverage soon, take note:

In August 2019, the Life Insurance Association (LIA) Singapore announced the changes, which will take effect from 26 August 2020. The changes are meant to reduce ambiguity of the intent of coverage, so that customers can better understand what is being covered and what is not.

Let’s understand the changes:

Summary

The LIA’s CI Framework, last updated in 2014, includes standardised definitions for a total of 37 severe-stage CIs.

The total numbers of CI remained unchanged at 37.

Of the 37, the names of 14 CIs have been enhanced, and the definitions of 21 CIs have been revised.

 

Summary Revised Unchanged
37 Names 14 23
37 Definitions 21 16

Revised Names

 

Existing List of 37 CIs Revised names New List of 37 CIs (With effect from 26 August 2020)
1 Major Cancers Yes Major Cancer
2 Heart Attack of Specified Severity No Heart Attack of Specified Severity
3 Stroke Yes Stroke with Permanent Neurological Deficit
4 Coronary Artery By-pass Surgery No Coronary Artery By-pass Surgery
5 Kidney Failure Yes End Stage Kidney Failure
6 Aplastic Anaemia Yes Irreversible Aplastic Anaemia
7 End Stage Lung Disease No End Stage Lung Disease
8 End Stage Liver Disease No End Stage Liver Disease
9 Coma No Coma
10 Deafness (Loss of Hearing) Yes Deafness (Irreversible Loss of Hearing)
11 Heart Valve Surgery Yes Open Chest Heart Valve Surgery
12 Loss of Speech Yes Irreversible Loss of Speech
13 Major Burns No Major Burns
14 Major Organ/Bone Marrow Transplantation No Major Organ/Bone Marrow Transplantation
15 Multiple Sclerosis No Multiple Sclerosis
16 Muscular Dystrophy No Muscular Dystrophy
17 Parkinson’s Disease Yes Idiopathic Parkinson’s Disease
18 Surgery to Aorta Yes Open Chest Surgery to Aorta
19 Alzheimer’s Disease / Severe Dementia No Alzheimer’s Disease / Severe Dementia
20 Fulminant Hepatitis No Fulminant Hepatitis
21 Motor Neurone Disease No Motor Neurone Disease
22 Primary Pulmonary Hypertension No Primary Pulmonary Hypertension
23 HIV Due to Blood Transfusion and Occupationally Acquired HIV No HIV Due to Blood Transfusion and Occupationally Acquired HIV
24 Benign Brain Tumour No Benign Brain Tumour
25 Viral Encephalitis Yes Severe Encephalitis
26 Bacterial Meningitis Yes Severe Bacterial Meningitis
27 Angioplasty & Other Invasive Treatment for Coronary Artery No Angioplasty & Other Invasive Treatment for Coronary Artery
28 Blindness Yes Blindness (Irreversible Lost of Sight)
29 Major Head Trauma No Major Head Trauma
30 Paralysis (Loss of Use of Limbs) Yes Paralysis (Irreversible Loss of Use of Limbs)
31 Terminal Illness No Terminal Illness
32 Progressive Scleroderma No Progressive Scleroderma
33 Apallic Syndrome Yes Persistent Vegetative State (Apallic Syndrome)
34 Systemic Lupus Erythematosus with Lupus Nephritis No Systemic Lupus Erythematosus with Lupus Nephritis
35 Other Serious Coronary Artery Disease No Other Serious Coronary Artery Disease
36 Poliomyelitis No Poliomyelitis
37 Loss of Independent Existence No Loss of Independent Existence

 

Revised Definitions

 

  New List of 37 CIs (With effect from 26 August 2020) Revised Definitions
1 Major Cancer Yes
2 Heart Attack of Specified Severity Yes
3 Stroke with Permanent Neurological Deficit Yes
4 Coronary Artery By-pass Surgery No
5 End Stage Kidney Failure No
6 Irreversible Aplastic Anaemia Yes
7 End Stage Lung Disease No
8 End Stage Liver Disease No
9 Coma Yes
10 Deafness (Irreversible Loss of Hearing) Yes
11 Open Chest Heart Valve Surgery No
12 Irreversible Loss of Speech Yes
13 Major Burns No
14 Major Organ/Bone Marrow Transplantation No
15 Multiple Sclerosis Yes
16 Muscular Dystrophy Yes
17 Idiopathic Parkinson’s Disease Yes
18 Open Chest Surgery to Aorta No
19 Alzheimer’s Disease / Severe Dementia Yes
20 Fulminant Hepatitis No
21 Motor Neurone Disease No
22 Primary Pulmonary Hypertension No
23 HIV Due to Blood Transfusion and Occupationally Acquired HIV Yes
24 Benign Brain Tumour Yes
25 Severe Encephalitis Yes
26 Severe Bacterial Meningitis No
27 Angioplasty & Other Invasive Treatment for Coronary Artery No
28 Blindness (Irreversible Lost of Sight) Yes
29 Major Head Trauma Yes
30 Paralysis (Irreversible Loss of Use of Limbs) No
31 Terminal Illness No
32 Progressive Scleroderma Yes
33 Persistent Vegetative State (Apallic Syndrome) No
34 Systemic Lupus Erythematosus with Lupus Nephritis Yes
35 Other Serious Coronary Artery Disease Yes
36 Poliomyelitis Yes
37 Loss of Independent Existence Yes

*Source LIA Singapore
*For the full list of changes, check 
LIA Definitions of Critical Illnesses: Comparison between Version 2014 and Version 2019.

Important Notes

For proposals that signed by 25 August 2020, insurers must ensure that the policies are issued no later than 25 February 2021. This gives insurers a grace period of six months to issue all such policies under Version 2014 definitions. New CI products introduced before 26 August 2020 may adopt either Version 2014 or Version 2019 definitions. If the insurer chooses Version 2014, the CI product must be withdrawn by 26 August 2020. The application of Version 2019 will be based on the Proposal Signed Date.

FAQ

How will these new changes impact current policies with CI coverage? Will they affect claims assessment?

Policyholders with existing CI coverages are not impacted by the new CI definitions. Claims assessment and benefits will follow the definitions, as well as the terms and conditions stated in their existing policy contracts.

Why is LIA Singapore refining the CI definitions?

In a note released by LIA, the changes are meant is to provide greater clarity regarding the definition and names. More information can be found here.

What are some highlights of the CI definition changes?

1) “Major Cancers” has been revised to “Major Cancer”.
Added to definition: Major Cancer diagnosed on the basis of finding tumour cells and/or tumour-associated molecules in blood, saliva, faeces, urine or any other bodily fluid in the absence of further definitive and clinically verifiable evidence does not meet the above definition.

2) For “Heart Attack of Specified Severity”, the reference to “Death of heart muscle due to obstruction of blood flow” has been revised to “Death of heart muscle due to ischaemia”. This makes it clear that both Type 1 Myocardial Infarction and Type 2 Myocardial Infarction are covered.

3) “Deafness (Loss of Hearing)” has been amended to “Deafness (Irreversible Loss of Hearing)”.
Also, the term irreversible is defined as, “cannot be reasonably restored to at least 40 decibels by medical treatment, hearing aid and/or surgical procedures consistent with the current standard of the medical services available in Singapore after a period of six months from the date of intervention.”

Are Singaporeans well-covered in terms of CI protection?

In times of critical illness, the average Singaporean and is only covered for about a year of their expenses – or 20% of what is needed should they be out of the workforce for five years.
Reasons for the 80% CI protection gap could include a lack of understanding of such protection, with people thinking they are unlikely to develop a critical illness, giving it lower priority. Their perceived cost of getting such insurance plays a part as well.

How much critical illness coverage is sufficient in times of need?

CI insurance provides one with a payout when he or she is diagnosed with a critical illness. Five to ten years’ worth of annual income is a commonly used guideline. Do consider the age of dependents – you may want more than that if your children are still young.

This is another rule of thumb to follow: CI policy should provide enough funds – after deducting debts and other liabilities – for replacement of annual income for five years. Your adviser might suggest up to ten years, depending on your circumstances.

There’s no “one-size-fits-all” CI plan. So, speak to us on tailoring your CI plan to best fit your specific financial situation today.

APEX ADVISORY GROUP

Alex Ang

Alex Ang has over a decade of success in financial advisory. Since 2015, he has consistently been ranked among the top 10 advisers at . The Chartered Financial Consultant is also a 10-time qualifier of the IPP Chairman’s Round Table (CRT).

Known for this comprehensive experience and knowledge, Alex serves a wide demographic of clients – from mass-market, to mass-affluent and high net worth individuals. Today, he supports an extensive network of long-term clients who appreciate his impeccable service and advice.

Alex’s goal is to nurture the next generation of leaders in the financial planning industry. Always willing to share his knowledge and expertise with his team as well as new advisers, he is also known for his outstanding leadership capabilities. The passionate mentor is adept in identifying talents and guiding them through learning programmes he tailors to their unique personalities. Under his tutelage, many of his mentees have achieved successes of their own within short time frames.

 

Contact Alex Ang at:

Corporate E-mail:
alexang@ippfa.com

IPP Financial Advisers Pte Ltd

78 Shenton Way #30-01 Singapore 079120Tel: +65 6511 8888 enquiry@ippfa.com   

IPP Financial Advisers Pte Ltd

 

78 Shenton Way #30-01 Singapore 079120
Tel: +65 6511 8888 | enquiry@ippfa.com