You may had heard from your friends or relatives complaining that insurance company are cheats because they refuse to pay when they make a claim for cancer. A person will be cover for cancer, stroke and several other list of illnessness under the benefit of major illness. Most people did not know there are a few requirements to fulfill before a major illness payout will be paid. For e.g. to successfully make a cancer claim, it must be either be malignant or the growth is uncontrollable. Therefore, a doctor may diagnose a patient to have a cancerous mole but classify it as benign and no payout will be done. One of the main requirement of a successful major illness claim is (as the name says) it must be serious enough and this in layman terms refers to the full blown stage of an illness.
Due to consumer’s demand, there are products that will pay at the diagnosis of an illness at the initial stage. These plans are known as an “Early Payout Critical Illness” (EPCI) plan. In the same example of cancer, an EPCI plan will pay at the pre-cancerous stage or Carcinoma-in-situ. These plans are usually term plans and it is very costly. It can cost as much as 5x of a term plan with critical illness. I will recommend a term plan to cover for death but I seldom encourage the use of term plans to cover for critical illness as you do know when your financial liabilities or financial responsibility to your dependents stop but you never know when critical illness will strike. I am in the business long enough to see hardcore believers of ‘Buy term invest the rest’ regretting getting a CI term plan because they get a 15 years term & the critical illness occured just after the term plan expired! Most EPCI plans are not only term plans but the maximum age of coverage would be up to 75. Thus, if you have been reading my post, I usually will not place such a plan in priority because a comprehensive medical plan can cover the cost of treatment at this stage and the premium is likely to be a fraction of an EPCI.
However, I had change my views on EPCI because NTUC had launched a EPCI whole life plan. It covers 3 stages of critical illness –
- Early Stage
- Intermediate Stage
- Advance Stage
What this means is that if a critical illness is diagnosis at the initial stage, a payout will be done. If the condition worsen and develope into intermediate stage, another payout will be made. The policy holder will also be paid if he is diagnose with Advance stage of the illness. He can also make more than one claim if he is diagnose with a different specified critical illness. Unlike several EPCI plans in the market, this is a whole life. It covers EPCI for as long as you live instead of the possibility of having an diagnosis after you term plan expire. As a whole life plan, it also generates cash values so you will still get back some money if you think you do not need an EPCI plan after a certain age. Last but not least, the premium is comparable to term plans of its similar nature.
I would encourage you to consider this plan for a slightly more comprehensive coverage. If you are currently having a term plan of such nature, I will seriously encourage you to do a review and have a look at this plan-NTUC Vivocare. Do talk to a financial adviser before making any changes to your insurance plans.
The diagram shows the developement of an colorectal cancer.
My IFA@Sg 