Please Buy Critical Illness Insurance

Posted 15 September, 2016 by Clearly
in Stellar Guidance

I was quite surprised to come across an article with the polar opposite of our title, published by a highly reputable personal finance site in Singapore.

In it, were reasons for not buying Critical Illness insurance, an expansion of views from an ex-Insurance CEO, who eschewed (deliberately avoids) buying CI cover to a large degree.

I was aghast at the title until I read between the lines to understand the author’s intentions – to show and demonstrate a certain set of conditions under which CI insurance need NOT be bought.

That’s all and well, if a reader examined the article closely. But I suspect the nature of the title itself would have skewed the perception about CI cover negatively.

Running a site that is a proponent of Life Insurance, I was understandably upset.


Almost as upset as he is


But hey! What’s life without a few differing opinions?

Give me a few minutes – and allow me to explain why CI insurance is bloody important.

And no, you don’t have to read between my lines.


The likelihood of CI is increasing – so is the Survival Rate


It’s no secret. We are living longer – and dying more frequently to disease because of that.

The average life expectancy of males in Singapore is 80 years (up from 73 in 1990).

For females, it is 84 years (up from 78 in 1990).


The top five causes of death in 2011:

Cancer – 28.5%
Heart Disease – 23.5%
Pneumonia – 15.7%
Stroke – 8.4%
Lung Disease – 2.5%

All in they account for nearly 80% of all deaths. We are living longer due to improvements in medical science, but living longer also exposes us to a greater chance of disease.


How does that work?


As we live longer, we expose ourselves to more unhealthy lifestyle factors (stress, lack of exercise, bad diets, even the foaming agent in our shampoos is a carcinogen).

Good news is, every other day there are new breakthroughs being made in cancer research, new vaccines being discovered, new ways of treating diseases. Translation: a higher chance for cures and a more optimistic future.


Case in point: Close up of a Cancer Cell. A new technique has been discovered to kill cancer cells within 2 hours, done in a non-invasive and targetted manner. No healthy cells are killed in the process. Reported July 2016


Doesn’t that mean a greater emphasis should be placed on CI Insurance?


CI Insurance is meant for Income Replacement – and a Whole lot more


Detractors of CI Insurance will proclaim loudly: Your Medishield Life and Integrated Shield Plan will take care of your hospitalization and treatment bills. Why else would you need to have CI insurance?

My answer to that is: Would those very same detractors think it is enough the moment they receive a diagnosis?

Shield Plans are good – we think they are essential.

But insufficient.


What it says on the tin


Because it covers hospitalization bills alone. Shield plans do not compensate you for lost income, neither will it pay out any meaningful sum of money for other essential needs other than medical treatment.


There might be a need to engage a helper after the treatment.
Special dietary needs.
Long term medication.
Inability to work while recuperation.
Experimental Treatment, even. (Might not be covered under the Shield Plans)


Long story short, the payout provided by CI Insurance can be used in any way you see fit, which is a great option to have. Like a parachute to be carried on you.

Wouldn’t you want to have this parachute in case Life suddenly pushes you out of the plane?


To address any potential Critical Illness protection shortfall on your own, check out FWD Insurance. They have a fully online and hassle free purchase experience.


CI Insurance is not an Investment – You always want it to have 0 Returns


Another bizarre gripe we hear all the time about CI insurance is that it provides a low rate of return. Supposedly, the chance of a claim is a mere 5%. (We don’t have the stats to prove or disprove that, but we don’t need it)

So some of us might think: Isn’t that money down the drain? I could be making so much more returns if I invested this money into something else, like stocks, ETFs, property, etc.


A variant of this gripe is that CI cover usually tags along with another plan like Whole Life insurance, which has a low rate of return. But the idea is still the same – money is “lost”.


Even the Captain is confounded


To that, we say: Curiouser and Curiouser!


Insurance is an expense. Always has been, always will be. And it should be an important one too.

We never buy insurance in the hopes of making a claim – do you? We just hope that it stays there unused, gathering dust. Till the end of our days, if we are lucky.


For those who are keen to make insurance a sound investment, we know exactly how to go about it.


Just purchase all the Life Insurance you can afford, wait for a year until the suicide exclusion clause is not in effect. Then jump off the tallest building you can find. Or if you can’t wait that long, find a friend and arrange for a fatal “accident”.

57,400% returns, easily. Imagine what you could do with that money.


CI Coverage is “expensive” – But contracting CI without Cover is Catastrophic


There is plenty of stuff out there that can be considered “expensive” or “optional” but we buy or consume them anyway.

Artisan Coffee.
The Latest Phone/Gadget.
Tuition for the children.

You get the gist. But why draw the line when it comes to CI insurance? A cuppa a week sets us back by $28 a month. Believe me, you can get some substantial CI cover for that money.


Coffee over Cover? Really?


One keeps you awake; the other keeps you alive. Tough choice, eh?


And how much of a financial catastrophe is a Critical Illness?

There was a man who spent his final days trying to get that message across, we wrote about it here.


Assuming that Medshield Life (and your Integrated Shield Plan) takes care of all medical bills, there is still a prospect of being discharged – but yet unable to resume working.


How long can that limbo period be? A survey of 100 CI patients survivors indicated an average recovery period of 3.5 years.

How many coffees will 3.5 years of income buy you?


So Please


Go out there and buy Critical illness cover.

Buy it with a term plan.
Buy it with Whole Life.
Buy it as a stand-alone.
Buy Early Stage CI if you like.

Its up to you really – just make an informed decision. One that is grounded with reason and fortified with common sense.

Because at the end of the day, you are the at the receiving end if anything untoward happens.

Would you want to face that ordeal alone, or with a financial guardian angel?


PS. This has got to be one of the most emotionally draining articles I have ever written. The importance of CI cover cannot be understated, and I hope that I have done adequate justice to the topic. aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.

  1. Darren


    “A survey of 100 CI patients survivors indicated an average recovery period of 3.5 years.”

    Can I know where did you get this statistic from?

    1. Surely

      Dear Roy,

      Thank you for your encouraging words.
      It makes us feel appreciated and give us the impetus to continue our work.
      Do help us spread the word.

      Stay tuned too. Seeya around !

  2. Sad

    Hi, i believe you are referring to ex-ntuc income tan kin lian’s blog. He was talking about EARLY Critical Illness, not the normal Critical Illness. Early Critical Illness coverage requires high premiums and he was suggesting that you will be better off saving. The normal Critical Illness coverage premiums are not that high.

    1. Surely

      Dear Sad,

      It was not the reference that we talk about but we were aware of TKL article dated Monday, November 16, 2009.

      Seemingly that article speaks about normal CI policy.
      I quote from his blog opener.
      “I have often been asked if it is advisable to buy insurance to cover critical illness. It is difficult for me to answer this question.”

      There is no indication that he is speaking about early CI.
      In any case, we agree with you that normal critical illness is not as expensive as the early ones.

      Clearly has highlighted the needs of CI coverage for this post.
      Whether it is early CI or normal CI, I think the message remains the same.

    2. Happy

      Hi, i believe you are missing the point. They didnt mention about tkl or his blog, until you made it your own focus. triggered much? for people like you, feel free to shut up and let others wonder if you are really dumb, rather than open your mouth and confirm it to the world.

  3. Usws

    Just purchase all the Life Insurance you can afford, wait for a year until the suicide exclusion clause is not in effect. Then jump off the tallest building you can find. Or if you can’t wait that long, find a friend and arrange for a fatal “accident”.

    Time to buy term insurance

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  7. Outofasudden

    Im here to give you my testimony, out of a sudden im diagnosed with a rare fatal disease, CI pays out within a week.

    Please do yourself and loved ones a favour.

  8. Lazy Singaporean

    I can see you want your readers to have a peace of mind, which is good. But sometimes, some people just can’t afford it. Budget has to be taken in account as well. Cheers!

    1. Poh

      Like what the author said, some term CI insurance can be as low as a few cups of coffee. If you can’t afford that kind of insurance, trust me, you can’t afford to fall sick more.

  9. Right on point

    Absolutely right! I read that article you mentioned and was in fits before I could finish. As a planner, critical illness coverage is something I actively promote after hospitalization, more so than death or savings. I’m lucky that my parents bought me 2 critical illness life policies when I was young. I always tell my clients, your family needs support without you around, and even more support when you’re around but helpless.

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  11. Fussy insuree

    Anyone can enlighten me with regards to the definition of CI (major cancers) referencing to early bought policies vs now?

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