In Singapore, 1 in 4 people may develop cancer in their lifetime, according to the Health Promotion Board’s Singapore Cancer Registry Annual Report 2021. Yet, many still assume that their existing critical illness (CI) insurance is sufficient. This assumption is dangerous.
A 2022 study by the Life Insurance Association (LIA) found that Singaporeans and PRs face a 74% protection gap when it comes to critical illness coverage. That means most people are drastically underinsured and may only realise it when it’s too late.
If you’ve already bought CI insurance, good. But are you truly covered? Here are six major coverage gaps that most Singaporeans overlook.
1. Early-Stage Illnesses Are Often Excluded
Many basic CI plans only provide payouts for late-stage illnesses. So if you’re diagnosed with Stage 0 or Stage 1 cancer, or an early heart condition, your insurer might not pay a cent.
This is a big problem because early detection is more common now due to improved screening. Yet, the financial burden of treatment can still be significant, even in early stages.
Consider multi-stage CI policies that provide payouts from the early stages of diagnosis. These help you act quickly, seek better treatment, and reduce financial stress from day one.
2. You Only Get Paid Once
Traditional CI plans are usually “single payout” policies. Once a claim is made, the policy ends. But what happens if you suffer a second unrelated illness or experience a relapse?
The reality is that people are surviving longer but not necessarily healthier. A person who survives a stroke today may be diagnosed with cancer five years later. And under a basic policy, they’d be uncovered the second time around.
Look into multi-pay CI plans that allow for multiple claims across different conditions or relapses. These offer longer-term security and peace of mind.
3. Your Coverage May Expire Too Soon
Some CI policies only provide protection until age 65 or 70. However, the risk of critical illness increases significantly with age, and many Singaporeans now live well into their 80s and beyond.
Imagine being diagnosed with a critical illness at 71, only to realise your plan lapsed a year earlier. That’s a common and costly mistake.
Choose policies that provide coverage up to age 100. These are especially useful if you want to age independently or protect your retirement years.
4. Your Payout Isn’t Enough
A common mistake is to assume that a $50,000 CI payout is sufficient. But between private hospital bills, long recovery periods, and income loss, that money can disappear quickly.
Think about it: would $50,000 really last if you couldn’t work for 1–2 years?
As a general rule, aim for CI coverage that is 3 to 5 times your annual income. This ensures that your basic living expenses, mortgage, and even children’s needs are taken care of while you focus on recovery.
5. You’re Not Covered for All Critical Conditions
Not every critical illness is listed in a standard policy. Conditions like early-onset dementia, lupus, or severe mental illnesses may be excluded entirely. Even if they severely impact your life and finances, your insurer could deny the claim.
This is especially risky if your family has a history of non-standard medical conditions.
Look for insurers who offer extended definitions or additional riders that cover a wider range of illnesses beyond the industry standard list.
6. You Haven’t Reviewed Your Plan in Years
A CI plan you bought at age 25 may no longer suit you at 35 especially if you’ve gotten married, bought a property, or started a family. Unfortunately, many Singaporeans never update their coverage after major life milestones.
This leaves you and your dependents underinsured when life circumstances change.
Make it a point to review your insurance portfolio every 1–2 years, or after any big life event. Your financial responsibilities evolve, and your coverage should too.
Critical illness insurance isn’t just about checking a box, it is about ensuring real protection when life throws you a curveball. With 1 in 4 Singaporeans facing a cancer diagnosis in their lifetime and a massive 74% protection gap, it’s clear that most of us need to revisit and reinforce our coverage.
Don’t wait for a diagnosis to find out your policy wasn’t enough.
Disclaimer: This article is intended for general information purposes only and should not be considered financial advice. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Please consult with a qualified financial advisor before making any investment decisions based on your specific financial situation and objectives.
Joel Khoo 