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:
- major cancer
- heart attack of specified severity
- stroke with permanent neurological deficit
- coronary artery bypass surgery
- 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.
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