Cheap Critical Illness Cover For Those In Their 30s

Profile: Adam, a 30 year old non-smoker male

Adam has adequate life insurance. However, he is still worried about burdening his family with his medical and daily expenses should a critical illness strike. While he wishes to receive some form of coverage against critical illnesses, he is only able to set aside a budget of $600 a year and is unsure of what he can get with this budget.

In this article, we look at several options and recommend the coverage option that we feel will best cater to Adam's needs.

Critical illness coverage options

Adam has five options for critical illness coverage. The options are:

1. Direct purchase critical illness insurance
2. Addition of an early critical illness (ECI) rider to a 5 year renewable term plan
3. Standalone single pay-out critical illness plan
4. Addition of an early critical illness (ECI) rider and multiplier to a whole life plan
5. Standalone multi-pay critical illness plan

Getting critical illness coverage on an annual budget of $600

_{^Premiums shown are before discounts and are calculated based on the profile of an age 30, non-smoker male. Accurate as of 3 November 2020.}

With an annual budget of $600, the two options within Adam’s budget are FWD Big 3 Critical Illness and TM Term Assure 2.

A Comparison

_{*Premiums shown are before discounts and are calculated based on the profile of an age 30, non-smoker male. Accurate as of 3 November 2020.}

Understanding FWD's Big 3 Critical Illness

With 90 per cent of critical illness claims coming from cancer, heart attack and stroke, FWD Big 3 is designed to cater to these three critical illnesses.¹ With premiums made affordable this allows more the opportunity to receive coverage against critical illnesses.

Understanding Tokio Marine's TM Term Assure 2 with ECI rider (5 year renewable)

The addition of an ECI rider will allow your term plan to also cover for critical illnesses. With an ECI rider, your death benefit payment will be accelerated in the event of a claim for a covered critical illness and your death benefit will be reduced accordingly. Plan will cease upon the full pay-out of your sum assured.

As the premiums of a 5 year renewable term plan is lower than that of a regular term plan, this will offer an affordable alternative to critical illness insurance.

Our recommendation for Adam: Add-on ECI rider

For early critical illness coverage, it is important to remember that no two plans are similar. Therefore, while both plans fall within Adam’s budget of $50 a month, our recommendation for Adam is to add-on an ECI rider to a 5 year renewable term plan (TM Term Assure 2).

With less than a $30 difference between the annual premiums for $100,000 coverage, we feel that the price difference between FWD Big 3 Critical Illness and TM Term Assure 2 with an ECI rider is negligible. Moreover, between the two, TM Term Assure 2 with an ECI rider covers for a wider scope of critical illness conditions and procedures and may provide a more comprehensive coverage for critical illnesses.

While some critical illness plans may include more benefits such as multiple coverage for critical illnesses or complimentary health checks, we feel that such plans are not aligned with Adam’s needs. As Adam is looking for basic critical illness coverage and has a budget of $600 a year, we feel that these perks may be a good-to-have and not a must-have for him. Alternatively, should Adam have any existing term or whole life insurance plans, he could also consider just adding an ECI rider onto his existing plans for coverage.

A last point to note is that premiums for this 5 year renewable term plan with ECI rider will increase with age and coverage level chosen. Therefore, while we will recommend this 5 year renewable term plan with ECI rider for Adam, this may not necessarily be the better critical illness coverage option for other age groups or those with other coverage concerns.

On understanding critical illness coverage:

The Basics Of Critical Illness Insurance

Choosing the right critical illness coverage. Part 1

Choosing the right critical illness coverage. Part 2

Comparing Critical Illness Coverage 2020

Critical illness coverage on a budget for age 40 and above

Click on the button below if you would like to know more about getting affordable critical illness coverage.

Information is accurate as of 3 November 2020 with changes subjected to the insurer's discretion.

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Best Critical Illness Insurance Singapore 2020

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^{1Source: https://www.genre.com/knowledge/publications/ri15-4-droste-xiang-en.html}