Critical Illness: Is there a Magic Number for Coverage?

   Recently, a few of my friends have had to go for checkups and surgery due to cysts or tumours. Cancer as a fact of life in Singapore is as real as it can get. It's no longer just an "aged" person's disease. Insurance companies, such as AIA, have also shifted to focus on preventive action. Programmes such as AIA Vitality aim to encourage healthy living. Living healthily is still no guarantee of continued good health. We must also be prepared for the unexpected. This month we look the factors to consider when planning for the "Magical Number" of dollars that we'll need in the event that cancer does strike.

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How much insurance should I get if I have cancer?

Once diagnosed with cancer, a patient would have 2 questions in mind: 1) how long more will he survive and 2) how much money will be needed to support a reasonable standard of living for that duration.

Immediate changes to lifestyle have to be made. Theses may include changes to diet and living habits (try to exercise more etc). While such changes may not cost much more, there are other areas where cost must be factored in:

          1)  Surgeon’s fee and consultation by oncologist
          2)  Hospital bill & room-board charges for inpatient treatment
          3)  Chemotherapy and post hospital follow up including TCM

The above costs will vary according factors such as severity of condition, choice of hospital and treatment, duration of treatment and the organ affected. For example, there has been a claim of $580,000 by a blood cancer patient after just 18 months of treatment.

          4)  Loss of income during treatment & recuperation

If we are also supporting our parents, spouse or children, the impact of this loss will also affect them. Fixed expenses still have to be paid. Our loved ones may even have to reduce their spending. We may have to give up future plans because the above costs eat into our savings. Moreover, income loss will also bring emotional stress to our family. A client of ours was replaced by her company during her treatment, although she had worked for 9 years. As a result, she suffered income loss of about S$167,000; all in the short time span of 2 years.

          5) Decrease in Quality of Life

Someone else in the family may need to work harder or start work to provide for what has been lost. Future plans may have to be abandoned due to lack of funds. The repercussion from inadequate planning is unlimited. We've come across delays in wedding plans, stopping of children’s tuition, business expansion put on hold and retirement abandoned, amongst others.

The above 5 considerations are but the most common to take note. There may be more factors to plan for based on individual needs. The seriousness of the matter cannot be overstated. We have only discussed the example of cancer. There are also the rest of the Critical Illnesses to plan for; not to mention other protection against accidents, disability, death etc.

It is essential to ensure that we have adequate protection,won't you agree? Approach your trusted Financial Services Consultant for a review of your Risk Management foundation today.