How Much Should Your Critical Illness Cover Be?

Critical illness insurance benefits a large amount of money if you are diagnosed with a serious illness or pre-listed critical illness like kidney disease, cancer, etc.

If you think of insurance as an umbrella, then the decision would be much more comfortable. You need protection from the Sunray or the rain. You would buy an umbrella depending on how much protection do you need; the size of the umbrella will vary accordingly.

The same goes for an insurance cover. You are buying critical illness insurance that indicates that you need sufficient financial protection to cope with the situation to ensure that you have adequate funds at the difficult times.

Do you need a critical illness insurance cover?

Before calculating the amount of insurance cover you need, confirm whether you need a critical illness insurance cover. The idea of buying this insurance appears when one is diagnosed with a serious illness. Ask these questions to make sure you need the insurance or not– Will still be able to earn? Will you need travel expenses due to your treatment?

Will any alterations need to be done in your home? Will you need to hire people to assist you in things that you will no longer be able to do?

Benefited with a lump sum money during such a critical situation will help you a lot because diagnosed with severe illness will break a person emotionally as well as financially. If you have the financial condition to be able to buy critical illness insurance, then you must go for it.

Now to be sure about how much cover you need from a health insurance Singaporeyou need to think through different factors;

The income you need

A critical illness insurance plan is an income replacement during a severe illness. To calculate the income you need, a straightforward method is to multiply your total income in a year with the estimated number of years you think you need to stay under medical care. Don’t forget to add household expenses, loan EMIs, etc., because your family will also suffer with you in this crisis.

Another major thing you need to consider is how long your family will be financially relying on you. For example, your children’s educational expenses and marriage expenses are basically how long your family needs you as a money provider.

Calculate total expenses 

You need to calculate all the expenses during the days when you will be ill or under medical treatment. These include not only medical expenses but also monthly expenses your family needs for living. You can add costs like car installments, food, mortgage payments, home care, and groceries. Then deduct the amount from the source of incomes rather than yours. Now multiply the final amount with the number of years you are expecting to be unable to earn.

All the medical expenses

Until today, medical science has improved itself a lot. Almost every disease has a cure. So, if you are seriously ill, then you will be cured for sure. But the whole process will cost a lot. Especially when nowadays, the cost of everything is on fire! So when you are adding all the above regular expenses, don’t forget to add each of the expenses that are associated with your treatment. This must include the costs you will need even while staying home during your critical illness like installing a lift for being unable to use stairs etc.

Add in your savings and liquid assets.

How much have you saved until now? How many acids do you have, which can be converted into money in case of an emergency? How much this money e-will helps to cover your medical expenses along with family and home expenses? You can deduct all this from the total costs you have calculated before or keep it as a safeguard.

How much benefit are you expecting to get?

Some companies provide allowances and pensions for the medical conditions of their employees. Generally, this is provided weekly. If you need it, you can apply for financial support to the local councilor.

The total amount you have calculated, keeping the above points in mind, must be equivalent to the money you need to as the insurance cover.

Other factors:

  • If you are not the source of income of your family
  • If you are expecting that all of your expenses may increase in future
  • The amount you need to pay each month to service your debts, the number of your outstanding mortgages and other high ticket debts
  • Think of your children’s educational costs if it is going to be consistent for an extended period, then you have imagined before or if you need to provide a bulk amount as your child-care cost. Check if any of your friends or your loved ones can assist you in this.
  • Create a benchmark on the rate of the expected increase of all the expenses. For example, the National average earning expects 4% growth annually to calculate child-care and labor costs.
  • The budget is an essential consideration. Always fix a budget for everything you are about to purchase. The budget is an indication of your ability to spend money on something. Your policy may just get canceled due to a delay or lack of payment.

How do I make sure that the critical illness insurance plan will payout?

  • There are some main reasons a company may reject a claim,
  • Failing to disclose the proper information
  • Claiming for a condition that is not mentioned in the policy
  • The condition which you want to cover may not meet the minimum definition
  • Not having all the required medical information that is necessary while claiming
  • Fraud claim

The best way to make sure the insurance cover is to make sure you are filling an honest form and fulfilling all the required criteria for claiming a particular company’s insurance policy. For example, if you want to buy a critical illness insurance plan from HL Assurance Singaporemake sure you are aware of all the criteria and requirements so that you will not have to face any inconvenience while claiming.