Critical Illness cover – the pitfalls

http://createwealth8888.blogspot.com/2009/09/getting-to-heart-of-critical-illness.html

Bryan Nott , 23/04/2009 , News articles and press releases by Simpson Millar LLP

A recent independent study by the Financial Services Authority (FSA) warns consumers of the not giving the right information when buying critical illness policies.


Most people take out a critical illness insurance policy in case they become seriously ill.

The study revealed that:

68% of policyholders assumed they could claim for any illness that meant they could not work


55% believed they only needed to provide more information eg smoking behaviour or family history eg cancer when and if they made a claim

It is important that all consumers are aware that not every illness is covered under these types of policies and they should find out exactly which illnesses are covered and at which stage of the disease they may be entitled to make a claim.

By failing to give detailed information at the outset of the policy you could find yourself in the position of potential claims being invalid. It is also extremely important that you inform the insurance providers of any changes to your family history of illness or your own in order to ensure that any future claims have the best possible chance of being honoured.

The FSA believes that the study's results are worrying and believes that the limitation of the cover is not necessarily being adequately explained to consumers during the sales process.

The study also showed that although consumer thought they had been given all the details they needed during the sales process many were hazy on the finer points of the insurance policies.
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CreateWealth8888:
 
If one can only claim during late stage of illness, CI doesn't really help. Late stage illness means no chance for survival. The difference in claim from CI and claim from death is just probably earlier by less than six months given the survival rate from late stage of illness is probably less than six month.
 
I think it is easier to withdraw your CPF due to critical illness than to claim for CI.
 
CPF FAQ:
 
Q: Can I withdraw my CPF if I am no longer fit for employment? If so, what do I need to do?


A: You may apply to withdraw your CPF in the Ordinary and Special Accounts if you are suffering from an illness which has resulted in you being permanently unfit from ever continuing in any employment.


You may apply for withdrawal online under my cpf Online Services - My Requests if you have a SingPass. Alternatively, you can also complete the application form CPF-MGS and mail it to us.

To support your application, please mail us a doctor's letter (dated within six months of your application) stating your illness.


Once we receive your completed forms and documents, we will obtain a medical report from your doctor or refer you to our panel of doctors to assess whether you are eligible to withdraw your CPF savings on medical grounds.


 
Do consider to include medical insurance and self funding. (keep sufficient large amount of money in yr CPF account).
 
BTW, I don't have any CI coverage; but, I do have medishield plus, medisave, and enough money in the CPF account to beat the CI coverage for the same amount of CI insurance premium that I could afford to pay.