3 Terrifying Facts About Critical Illness, You (Probably...) Didn't Know

Critical illnesses such as stroke, Alzheimer's disease, and brain tumor, are ailments that can strike when you least expect it and getting the right treatment can lead to a significant financial strain on your family. An Integrated Shield plan (IP) can help cover hospitalization costs, but is it enough?

Fundsupermart Oct 14, 2016 7041

You've heard about rising medical costs in Singapore, or might know a loved one recovering from a critical illness. In our earlier article on “To Your Insurance Agent, You Are Just a $4,000 Cash Cow”, we have shown how Ronald can get coverage for protection needs through term or whole life plans. As we move forward in life and age catches up on us, our healthcare and medical expenses will be a significant cost to look at.

Here are 3 terrifying facts about critical illness we have uncovered, and how a critical illness plan may prepare you better for the unexpected event from happening.

#1 Pneumonia is the 2nd leading cause of death

Everyone knows that Cancer is the number 1 killer in Singapore, constituting 29.7% of all mortality cases in 2015. However, a lesser known fact is that Pneumonia is the 2nd highest cause of death, coming in at 19.4%1.

For the un-initiated, you may not know what Pneumonia is. It is an inflammation of the lungs where some of the symptoms includes coughing, chest pain, fever, and problems with breathing. Sounds familiar?

Remember the simple cold or flu you had just a while ago? When left untreated or improperly cared for, the influenza virus can lead to further complications resulting in Pneumonia. A recent news report on the cause of the death by the young lady is from lung infection2

A word of advice the next time you caught a flu? Go see a doctor.

#2 Most people are only prepared to survive ONE critical illness

According to AIA Health Matters Survey 2016, 32% of people are diagnosed with more than one critical illness3. Most people’s personal savings and with some family member's help, can weather the cost of a single critical illness. However, should a 2nd critical illness strike, there is a high likelihood that the burden can exceed the financial capability of most people.

Based on Ministry of Health’s hospital bill size statistics, during the period of 1 Aug 2015 to 31 Jul 2016, for Singapore General Hospital the cost for Pneumonia with serious complication can run up to $31,406 for the 90th percentile4. This means 1 in 10 patients paid more than this amount to seek treatment for Pneumonia.

That amount is just the hospitalization bill alone. Once you account for the follow up consultation, medication and so forth, the cost can easily be much higher than expected.

#3 Your Medisave may not be enough!

In 2015, the number of Medisave account holders stands at 3.3 million out of which 2.5 million account holders are being covered by Private integrated shield plans. In additional, the average balance per Medisave account nationwide is at $22,700.5

From the statistics shown in #2 on the cost for Pneumonia with serious complications, it is easy to deduce that a person suffering from such ailment will easily wipe out their Medisave savings, if there are no withdrawal limits in place. Your Integrated Shield plan is great for covering your hospitalization costs, however the recurring medical costs from follow up consultations and medication (which can be very expensive) will erode the cash savings that you have painstakingly set aside. In addition, during the recovery process, the ability to continue to work for your income might be reduced significantly.

How a Critical Illness plan can help you

Sarah, age 35, is a non-smoker. She is looking at having coverage for critical illness where her main concerned is not to burden her family’s finances through hefty medical bills. One solution is to utilize a critical illness plan that can pay out a lump sum to help cover the medical costs which will help to ease the financial burden during her recovery period.

Table 1: Critical Illness plans (e.g. NTUC Income VivoCare 100, Manulife ManuCompleteCare, Tokio Marine TM EarlyCare)

Product
Sum Assured
Premium Term
Annual Premiums Paid
Estimated Total Commission Received from Insurer
Savings You Get Through Insurance@FSM
Critical Illness Plan

$100,000

(with Minimum Protection Benefit of $200,000 till age 65)

20 Years, Covers for whole life
$4,378.70

$5,692.31

(approx. $3,502 first year commission)

$1,700

From table 1, Sarah may want to insure herself with a $100,000 sum assured coverage, which comes at an annual premium of $4,378.70. Based on Insurance@FSM’s 30% commission rebate, Sarah will enjoy an estimated total savings of $1,700.

Some available plans on Insurance@FSM:

NTUC Income - VivoCare 100 (Whole Life), Manulife - ManuCompleteCare (Term), Tokio Marine - TM EarlyCare (Term)

Integrated Shield plans are to cover hospitalization costs, while Term or Whole Life plans are to look out for your dependents' well-being. A Critical Illness plan is to help you ease your financial burden. In the event of a covered critical illness being diagnosed, a proportionate lump sum will be paid out that can help cover your outpatient treatment, medication, nursing, daily survival and living expenses.

Being able to receive a lump sum which offsets majority of her medical costs, Sarah is able to focus her energy on recovering well. Though we cannot tell when such illness will strike ourselves or our loved ones, it pays to be well prepared for the unexpected.

Here at Insurance@FSM, we help to make your coverage more affordable with our 30% commission rebate. Contact our investment advisers at advisory@fundsupermart.com to book an appointment and get your financial needs reviewed today..

1Source: https://www.moh.gov.sg/content/moh_web/home/statistics/Health_Facts_Singapore/Principal_Causes_of_Death.html

2Source: http://www.straitstimes.com/singapore/lung-infection-not-massage-cause-of-womans-death

3Source: http://www.straitstimes.com/singapore/aia-survey-uncovers-3-gaps-in-critical-illness-coverage-here

4Source: https://www.moh.gov.sg/content/moh_web/home/costs_and_financing/hospital-charges/Total-Hospital-Bills-By-condition-procedure.html

5Source: https://www.moh.gov.sg/content/moh_web/home/statistics/Health_Facts_Singapore/Healthcare_Financing.html


Interested to learn more? Check out these articles:

To Your Insurance Agent, You Are Just a $4,000 Cash Cow!

Do You Know That Medical Inflation in Singapore is 15% now? Part 1 / Part 2 / Part 3

With Medishield Life, will I be sufficiently covered?

All You Need to Know About Health Insurance



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