The Life Insurance Association has identified 37 types of critical illnesses. Out of these, cancer is among the most prevalent.

According to an infographic done by the Singapore Cancer Society, 1 in 3 deaths are caused by cancer; an even more worrying note is that 16 people die from cancer daily.

The costs of being stricken with critical illnesses are not just limited to medical costs. There are also financial costs at play. For instance, the need to replace one’s income, as a result of being unable to work. One’s income serves to continue supporting existing financial responsibilities such as household expenses, utilities, and other necessary payments like bills.

2 Main Parts of Critical Illness Coverage

Critical Illness coverage can be split into two main parts: standard critical illness plans and early critical illness coverage plans. Standard critical illness plans only provide coverage for advanced stages of critical illnesses while early critical illness coverage plans include coverage for early stages.

The purpose of early critical illness coverage is to allow one to focus on recovery while not needing to be concerned with other financial responsibilities. Normally, the chances of recovery from a critical illness are higher when addressed at an early stage. Not needing to worry about income sources would greatly aid the recovery process.

Looking at both early and standard critical illness coverage, it is advised to ensure the coverage amounts to 5-7 years of one’s yearly income. The Life Insurance Association mentions that statistically, it takes that long for one to either recover fully or pass away. This period of coverage can be further broken down as such:

• Early Critical Illness coverage: 1-2 years

• Critical Illness coverage: 3-5 years

Ideal Coverage

Ideally, the coverage one should take would be a total of 7 years of income. It can be split according to the recommendation above (2 years of early coverage, 5 years of standard coverage). However, with different individuals having different financial circumstances, not everyone may be able to afford 7 years’ coverage from the get-go. Hence, the leeway provided in the form of minimally 5 years, with a split of 2 years of early coverage, and 3 years of late coverage.