Critical Illness Plans (Singapore)

In are you prepared for a critical illness in Singapore?, we look at why it is important to get a critical illness protection especially in Singapore. There are also 5 myths of financial planning that is important for us to relook the fundamentals of financial planning (singapore).

One of the readers of Journey With Money mentioned that she is not sure what kind of plans are out there in the market and what would best suit her needs. While everyone’s needs are certainly different, there are generally 3 ways a critical illness plan can be constructed.

Investment Linked Plan (ILP)

A critical illness coverage is most likely an unit deducting rider on this plan. For purpose of this discussion, we will not be touching on the features of an ILP. Despite many misconceptions of the plan (whether good or bad), it is a popular plan among the younger generations.

The advantage of having a critical illness rider on this plan is because you will only be paying the cost of insurance at your current age. Critical illness coverage is cheaper when you are young compared to when you are older. As a result, more premiums are allocated to investment units. However, coverage will be more expensive in future.

There is only one pay out in an event of a critical illness. After which, the critical illness rider will terminate.

Life Insurance

In Singapore, a limited payment premium life plan is very popular. This means paying for a limited period (example: 20 years) and you can be covered for life (till age 100). A critical illness is a non participating rider attached to the main plan.

The advantage of having a critical illness rider on this plan is because of the limited paying function. This means you will not need to worry about paying premiums when you retire or at an older age. However, this means that initial premiums will be more expensive.

There is only one pay out in an event of a critical illness. After which, the critical illness rider will terminate.

Term Insurance

In Singapore, term coverage is popular among investors and families. They want to use their money to do stock investment. This is because this is the cheapest form of insurance. There is no cash value in this policy.

The advantage of having a critical illness term insurance is because it is cheap compared to an ILP or a Life plan. However, there is no cash value in the policy.

There may or may not be a single payout in an event of a critical illness.


In Singapore, most people are under insured especially for critical illness. Research has also shown that generally people’s standard of living falls after a critical illness and they can only afford to be diagnosed with only one critical illness. With medical advancement, critical illness can also be detected early now. A single payout or a simple plan may or may not be a sufficient coverage anymore.

Today, there are more extensive plan that covers for early stage critical illness. This is for people who goes for medical checkup and wants to treat the illness ASAP.

Fortunately, insurers have stepped up their game and offer plans that covers for more than one critical illness. This gives the assurance that people still can maintain their standard of living in an unfortunate event of a second or third critical illness.
Disclaimer: The above does not form any basis of recommendation. To find a plan that is suitable for you, please talk to your financial adviser.

In Journey with money, we want to empower individuals to retire early and avoid financial pitfalls such as this. Such a financial pitfall will delay retirement by at least a decade if not forever. If you already have done financial planning (singapore) or have a financial planner, that’s fantastic. You should be proud that you have taken the first step. However, there are many still unaware of this. We will like to offer our readers (even if you have a plan already or not) a free review by our in-house Financial Planner. He will cater a uniquely designed portfolio for your specific needs and your journey with money.

Feel free to leave comments below or contact him at

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