I’ve been reviewing my insurance coverage lately and realised that I am lacking in 2 areas: disability income insurance and early critical illness.
I feel that I’m adequately covered for all other aspects – death, total permanent disability, critical illness, personal accident and hospitalisation. However, because I have no dependents, I’m starting to think whether CI coverage is necessary for me since these usually pay out in the more severe stages of the disease – what can you do with the money when you’re so ill other than leaving it for your dependents?
Disability Income Insurance
Currently, my biggest asset is my skill in the workforce and I need to protect my only source of income (i.e. employment income). Disability income insurance is thus attractive for a young working adult like me. There are 3 insurance companies that provide this form of insurance: AIA Premier Disability, Aviva IdealIncome and GE PayAssure.
Below is a comparison I made for them 3 based on their product summaries. I do not guarantee the accuracy of these information, this is just for my own reference.
||AIA Premier Disability
|Annual premium for 25yo non-smoker female for $2K monthly payout
(till age 60)
(till age 65)
(till age 60)
(till age 65)
|Equivalent monthly premium
||$35 / $38
|Definition of total disability during non-working periods
||Unable to perform 2 of 6 ADLs
||Unable to perform 3 of 6 ADLs
||Unable to perform 2 of 6 ADLs
|Partial disability benefit
All calculated the same
|Catastrophic disability benefit
||12x = $24,000
||6x = $12,000
Based on these information, Aviva appears to be most expensive and most difficult to qualify for payout. Its rehab and death benefits are also the least attractive.
I like the added catastrophic disability benefit provided by AIA, which I suspect is the reason for its high premium rate over GE. However, like I mentioned, I feel that I am adequately covered for death and total permanent disability, so I am truly looking for a basic no-frills disability income insurance.
So, GE PayAssure is looking especially attractive to me right now due to its affordable premium. Of course, I have to find a competent GE insurance agent who is ready to answer my list of questions about a specific clause of the product summary.
Early Critical Illness Insurance
There seems to be 2 schools of thought for this form of insurance.
- It is meant to take care of policyholder (which is applicable for me since I have no dependents)
- It can cover for treatment costs that might not be covered by H&S insurance
- It helps with living expenses if the policyholder needs to take break from working
- It is good if you do not have enough savings to tide over that period
- Depending on family history and lifestyle choices, the probability of claiming this insurance might be high.
- It is relatively expensive.
- You could probably do a better job saving up that money for early CI instead of paying for premiums.
- There may be overlaps with disability income insurance. So if you have disability income insurance, is early CI necessary?
- Early CI rarely knocks you out of work.
- Small chance of successful claim.
- Common cancers like breast / prostrate may not be covered?
Budget is key for me, especially since I’m pretty fresh into the workforce and can’t afford to overdose on insurance. Even if I were to purchase one, I would probably get a small sum assured like $50,000.
I did a quick search of premium rates of early CI plans out there based on information available on the companies’ websites for a 30yo, non-smoker male of sum assured $50K. This is a non-exhaustive list and in order of premium rate:
- AXA Early-payout LivingEnhancer: $318/yr till 65yo
- Aviva My Early CI: $444/yr till 99yo
- PruEarly Stage Crisis Cover: $500/yr till 75yo
- AXA Early stage criticare: $600/yr till 65yo
- Manulife ManuComplete Care: $627/yr
- Aviva My Multipay CI: $675/yr till 75yo
- Tokio Marine EarlyCare: $768/yr
I took a close look at one of the product summaries for all the conditions covered (not going to reveal which one) to analyse the definition of “early” CI in detail.
As a rule of thumb, I’ve considered the following conditions to be relatively prevalent in SG: dementia, parkinson’s disease, stroke, cardiac related issues, cancer, loss of sight, loss of hearing, paralysis, kidney failure, motor neurone disease, multiple sclerosis, muscular dystrophy. The others? Not so much, but this is just my own layman opinion.
So how “early” should the state of your CI be to qualify for early CI payout?
- Dementia: require constant supervision, “severe”.
- Parkinson’s: cannot be controlled by medication, cannot perform 2 of 6 ADLs independently
- Stroke: undergo craniotomy or shunt
- Cardiac related issues: undergo balloon angioplasty with minimum 60% stenosis / undergo keyhole surgery / insertion of permanent pacemaker / undergo valvotomy or valvuloplasty
- Paralysis: irreversible loss of function of one entire limb
- Kidney failure: surgical removal of one kidney
- Loss of hearing: 60dB (i.e. moderate-severe hearing loss)
- Loss of sight: total and irreversible loss in one eye
- Benign brain tumour: surgical removal / burr hole surgery
- Cancer: carcinoma in situ (pre-malignant and non-invasive are thus excluded), T1N0M0 for thyroid cancer
I don’t know about you but these definition of “early” don’t exactly sound “early” to me. Perhaps I had too high expectations coming into this.
So if you get a early CI plan covering till age 65, the likelihood of claiming during that period of life based on the above severity is extremely low. Of course unless you have significant family history, then that’s a whole other story.
I might potentially look into Aviva My Early CI as it covers till age 99.
So I guess you can tell from this post that I’m gonna get the DII but possibly not early CI insurance unless the Aviva My Early CI is super attractive or reasonable to me in terms of their T&Cs.
What are your thoughts?