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Why Changes to Critical Illness Definitions Matter to Parents

Photo by Hush Naidoo on Unsplash

Do you know that 95% of claims for Critical Illness (CI) are likely to be affected by the changes to the Critical Illness definitions that will kick in from 26 August 2020?  What does this mean for parents?

Research findings by the Life Insurance Association of Singapore (LIA Singapore) show that over 90 per cent of all severe stage claims received by life insurers are for five critical illnesses: major cancer, heart attack of specified severity, stroke with permanent neurological deficit, coronary artery bypass surgery, and end-stage kidney failure. This means that 4 out of the top 5 critical illnesses or about 95% of all claims will be affected by the new definitions.

If you have missed this Straits Times report on 29 Aug 2019, here is a primer on what is to come.  Now is not too late to help ourselves and our loved ones, especially our kids, secure a good critical illness policy before the new changes kick in from 26 August 2020.

After a round of revisions to the definitions in Feb 2015, the Life Insurance Association Singapore (LIA Singapore) announced another round of changes with changes made to 14 headers and 21 definitions. This was done as “with the rapidly ageing population and rising incidences of chronic illnesses here, regular reviews of the critical illnesses definitions will ensure that critical illnesses products stay relevant with changing times, and that the intended scope of coverage is clear to consumers”, according to LIA president, Mr Khor Hock Seng.

In layman’s speak, this means that with an aging population, the number of critical illness claims are rising quickly and hence the insurers have to tighten the claim requirements to ensure they remain in business.

The revised definitions included tighter and more stringent definitions for Major Cancers, Heart Attack, Stroke, Benign Brain Tumour, Coma and Aplastic Anaemia.

The new framework would also require one to jump through more hoops for the claims to be made, as clinical diagnosis by doctors must now be supported by diagnostic tests in more instances. Lastly, for other conditions like deafness, blindness and aplastic anaemia, it must now be “irreversible” before a claim can be made.

With stricter definitions coming onboard soon, it makes sense for parents to review our coverage and more importantly for our children to ensure that their critical illnesses coverage will not be compromised by the changes in the definitions come 26 Aug 2020. This is a gift that also comes with the added advantage that premiums are cheaper for our young ones!

To understand the implications better, you may wish to talk to your financial advisor or attend this webinar.


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