Critical Illness coverage too Expensive? Here's an Alternative!

Most people would have at least a basic level of Critical Illness coverage. For those who don't I strongly recommend being covered for at least a bit. As a rule-of-thumb, the ideal amount of coverage one should have is 5 to 10 years worth of income. This would be sufficient to see us through being unable to work and the whole recovery process. However, to increase existing coverage to this level may not be affordable to everyone. One alternative is to focus on coverage against the no. 1 killer in Singapore - Cancer. Read on for more details.

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The unfortunate fact is that in Singapore, cancer remains the no. 1 killer. Almost 1 in 3 deaths are attributed to cancer1. Cancer cases have been rising over the years, and the number of people living with cancer continues to increase2. However, with advancements in cancer treatments, survival rates for people with cancer have greatly improved. Improvements in screening for some common cancers have also led to earlier detection and therefore more timely treatment for many.

Cancer survivors can now look forward to normal lifespans and a good quality of life due to newer and better treatment options. A comprehensive integrated-shield plan would take care of most of the treatment costs. However there are other unforeseen costs that would burden us should we not be prepared for it. Imagine having to worry about money for family expenses, when we are in no state of health to work. Increase in expenses may also come in the form of having to hire extra help, or increase transport costs when we have to frequent the hospital for treatment.

In view of these realities, it’s essential to have a plan that offers financial security and peace of mind. Having a lump sum payout can provide us with more options as well. AIA’s newly launched cancer insurance plan is one such plan. 

“AIA MultiStage Cancer Cover” offers 100% payout at early, intermediate or major stage cancer as well as affordable level premiums that don't go up with time. There’s only 3 underwriting questions and no need for any medical check-up. Moreover, should we sign up before 16 November 2020, we’ll even get 10% off the first year's premium.

This is as close to a no-frills, straightforward way to increase important critical illness coverage affordably, as one would get. Contact me for more info, or simply sign up here.

1. https://www.moh.gov.sg/resources-statistics/singapore-health-facts/principal-causes-of-death2. https://www.nccs.com.sg/patient-care/cancer-types/cancer-statistics

2. https://www.nccs.com.sg/patient-care/cancer-types/cancer-statistics

Changes in Critical Illness ahead! Don't be caught Off-guard!

We take a break from investments and Covid-19 this month. If you've not heard, a major shift is coming our way in the form of a revamp in Critical Illness definitions, in August 2020. Yes, we're only left with a month to react. The Life Insurance Association of Singapore (LIA) has decided to tighten conditions for claiming. On one hand, it clears up some ambiguity. On the other, it becomes a tad more difficult to get a successful claim. Read on for more info...

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The Life Insurance Association of Singapore (LIA) announced that the amendment of Critical Illness in life policies will take effect in August 2020. The changes take into account advances in medical treatment and technology which impact how critical illnesses can be treated, managed or mitigated.

Over 90% of all severe stage claims received by life insurers in Singapore are for the following five critical illnesses:

1. major cancer
2. heart attack of specified severity
3. stroke with permanent neurological deficit
4. coronary artery bypass surgery
5. end-stage kidney failure

Taking the change in “Major Cancer” definition for example, diagnosis based on “blood or body fluid tests with no identifiable tumour cells” will no longer be accepted. The list of excluded tumours have also been expanded (e.g. exclusion on “bone marrow malignancies” etc).

Another example is the change of “Deafness” to mean the “irreversible” loss of hearing, whereas previously, “loss of hearing” was sufficient.

The change results in the tightening of definitions, clarifying otherwise grey areas. This means that to claim successfully, one has to fulfill stricter definitions. More details on the changes can be found here (definitions came out in 2019, to take effect in Aug 2020).

Term or Group/ Company policies are likely to be affected by the change (e.g. a very popular term policy taken up by Singaporean men during their NS stints etc). On the bright side, personal private life policies, taken up before the coming change takes place in Aug, will not be impacted by the new definitions. 

Nevertheless, a study done and published in the Straits Times in April 2018 showed that Singaporeans have policies that would meet only 20% of their Critical Illness needs. Generally-speaking, it is advisable for one to have at least 5 to 10 years of annual income set aside or coverage of a similar amount, to meet Critical Illness needs.

In view of the changes, there’s been a rush by policyholders to obtain necessary critical illness coverage before the dateline. It would be wise to contact our trusted Financial Consultant for a review in this aspect.

Speak to me to find out more or to just have a chat on options available.

Don't Waste the $Opportunity$ of this Volatile Market

While we are coping with Covid-19, it is hard not to notice the extreme volatility of the stock market. A series of black swan events in early March 2020 resulted in the largest market plunge since Black Monday 1987. Yet a few weeks later, we witnessed the biggest single day gain of the Dow. Nobody can foretell the future but what is guaranteed, is that markets will remain volatile. In this issue, we explore two approaches to take advantage of market volatility. 

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How markets behave has a strong correlation with the expected Covid-19 situation. Australia, New Zealand and South Korea, have started to wind down their lockdown measures, while Europe and the USA are still in the midst of the battle. 

The global economy is now at Point 1. It is unlikely that it takes off (V) as experts are saying that the pandemic would be a long drawn out one. We can only hope that we’ll experience a U-shaped recovery instead of L. Regardless, here are two strategies that we can put in place to take advantage of the ups and dips. 

Dollar-Cost Averaging 

This entails investing the same amount on a regular basis, and not timing the market. In the above illustration, the same $8,000 invested over the same seven months, yields 4.07% when invested in regular sums of $1,000 monthly. This is one way to smooth out the ups and downs of the market. 

Regular Fund Rebalancing 

This method buys into stocks when it’s relatively cheaper and sells of stocks to buy bonds (take profit) when stocks rise. For example: Original portfolio of 30% bonds and 70% stocks. Stocks go up, we sell (sell high) to take profit and buy bonds, rebalancing back to 30% bonds 70% stocks. When the market drops, we sell bonds to buy stocks that are now relatively cheaper (buy low). In this way we buy low and sell high without having to time the market. Some instruments allow us to do this automatically. 

Of course there are numerous ways to profit from a volatile market. These are but two simple strategies. More importantly is to know your investment objective and volatility tolerance. Speak to us to find out more or to just have a chat on options available.