Know The Difference: Critical Illness vs Cancer Insurance Plans

Find out what's the difference between a critical illness vs cancer insurance plan with an exercise footwear analogy!

Similar to a critical illness plan, a cancer insurance plan will pay the sum assured in the event of a cancer diagnosis. The payout from your cancer insurance plan can also help to cover for lost wages, medical and non-medical costs.

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Between critical illness plans and cancer insurance plans, which one should you pick to cover your needs? Here’s a critical look at both types of insurance plans and how they fit into your insurance portfolio.

Think of critical illness plans as your sports shoes: they cover multiple critical illnesses, much like how sports shoes can be multi-purposed for running, badminton, gymming and even soccer.

Cancer insurance plans? Well, think of them like your soccer boots. They are better suited to provide targeted coverage for cancer, much like how soccer boots provide better grip of the turf and are ergonomically padded for ball control. However, cancer insurance plans only provide coverage for cancer.

Here’s the lowdown on the differences between critical illness and cancer insurance plans:

  • Why do you need a critical illness or cancer insurance plan
  • Comparison table
  • About critical illness plans
  • About cancer insurance plans
  • Which should you get?

Why get a critical illness plan or a cancer insurance plan?

Cancer is the number one cause of death in Singapore, accounting for nearly 30% of deaths each year. For men, colon-rectum cancer is the most common type of cancer. For women, breast cancer is the most common, affecting close to 30% of women.

Here in Singapore, our MediSave,  MediShield Life and Integrated Shield Plan help to pay for our medical costs. This includes hospital bills and selected costly outpatient treatments such as dialysis and chemotherapy for cancer.

Medical costs aside, you could incur additional costs during the entire course of cancer, from screening to recovery, of which some are not covered by your health insurance plans. Examples include medical supplements, mobility aids, transport costs, or the loss in income.

Critical illness plans and cancer insurance plans provide lump sum payouts, which you can use to help cover these extra costs.

That said, what are the key differences between these two types of insurance plans?

Critical Illness Plans Cancer Insurance Plans
What it covers 37 critical illnesses, typically at the late stage of the illness Covers all types of cancers, at all stages of cancer
What it doesn’t cover (Exclusions) Early stage critical illnesses or early detection of cancer (unless the policy specifically mentions coverage for this) Other types of critical illnesses, such as stroke, kidney failure, liver failure, coma and more
Why get it To receive a payout in the event you are diagnosed with a covered critical illness To receive a payout in the event you are diagnosed with cancer, regardless of whether its an early or late stage diagnosis
Available as a rider? Yes Yes
Cost More expensive, when compared to cancer insurance plans

E.g. A non-smoking male aged 30 can get S$50,000 coverage for 40 years at around S$330 per year with Singlife.

Highly affordable

E.g. You can get a sum assured of S$50,000 for less than S$100 in premiums each year. Cancer insurance plans are typically renewable annually, where your premiums are likely to increase year on year as you age.

 

Critical illness plans: The sports shoes

Currently, there are 37 critical illnesses defined by the Life Insurance Association (LIA) Singapore. To help you get a better idea of what critical illnesses include, here are five prominent critical illnesses that make up over 90% of all severe stage claims received by life insurers in Singapore:

  • Major cancer
  • Heart attack of specified severity
  • Stroke with permanent neurological deficit
  • Coronary artery bypass surgery
  • End-stage kidney failure

A critical illness plan gives you a lump sum payout when you are diagnosed with a critical illness that is covered by the plan.

This payout can be used to help reduce your financial burden, whether it’s to cover your medical costs, mobility aids, health supplements or just about any other costs you incur while on your road to recovery. It can also help to cover your general living expenses or even the potential loss in income or savings.

If you’re looking for a plan that covers a wider range of critical illness with varying levels of severity, you can consider an early critical illness plan. Find out more about the differences between critical illness plans and early critical illness plans here.

Pros Cons
Critical illness plans Covers a wide range of 37 illnesses, not just cancer. This includes other common illnesses such as heart attack, stroke and kidney failure.

Highly affordable compared to early critical illness plans.

Typically covers the late stage of critical illnesses. This means you might not be eligible for claims if the illness is detected early.

Costlier than cancer insurance.

 

The LIA recommends that an average working adult should have about S$316,000 in critical illness coverage, about 3.9 times the average annual pay of $81,663. Here are some of the best critical illness plans in Singapore.

Major cancers are considered a critical illness. However, like many other critical illnesses on LIA’s list, only late stage cancers are covered under critical illness plans. For example, all tumours which are histologically classified as pre-malignant, non-invasive, or having any degree of malignant potential, are excluded.

It is common knowledge that early detection and treatment of cancer could lead to better outcomes. If you’re looking for cancer coverage even in the early stages, this is where cancer insurance plans come into play.

Cancer insurance plans: The soccer boots

Similar to a critical illness plan, a cancer insurance plan will pay the sum assured in the event of a cancer diagnosis. The payout from your cancer insurance plan can also help to cover lost wages, medical and non-medical costs.

For an early stage diagnosis, some cancer insurance plans such as TIQ Cancer Insurance and FWD Cancer Insurance give 100% payout; while others such as MSIG CancerCare Plus plan might provide partial benefit payout, with the remaining sum assured to be paid out in the future should the cancer return.

Some cancer insurance plans come as riders, such as the AIA Cancer Relief Income Rider that provides a monthly income after you’re diagnosed with a major cancer. There are also cancer insurance plans focused on providing coverage for cancer survivors with recurrent cancers, such as the AXA Cancer ReCover.

In terms of affordability, cancer insurance plans are far less taxing on the wallet than critical illness plans.

You can get a sum assured of S$50,000 for less than S$100 in premiums each year. Coverage can also go up to S$200,000, depending on how high you need your coverage to be. Cancer insurance plans are typically policies that are renewable annually. As premiums ultimately depend on your age and health, this also means that your premiums are likely to increase year on year as you age.

Pros Cons
Cancer insurance plans Targeted coverage for cancer specifically.

Covers all forms of cancer, at all stages, from early, intermediate to late stage.

More affordable than critical illness plans.

Only covers cancer and not other critical illnesses (e.g. loss of hearing, stroke, kidney failure).

 

The big question: Which C-word should you get?

Can you play soccer in sports shoes? Sure you can. But will soccer boots be a better choice for the sport? Definitely. If you can afford it, you’d have both a pair of sports shoes for all purpose use and a pair of soccer boots just for football.

For maximum coverage, you can get both a critical illness as well as a cancer insurance plan, with cancer insurance providing an extra layer of coverage specifically for cancer. You can also double dip, which means that if you are diagnosed with late stage cancer, you could receive payouts from both your critical illness as well as your cancer insurance plan.

A critical factor to consider is your financial situation and whether you can afford to get both types of insurance plans. If you’re cash strapped, it depends on your priorities — can you spare the cash for a critical illness plan, or would you prefer to first protect against cancer at a lower cost?

One final consideration is your family history. If your family members have a history of getting cancer, you might want to get higher cancer insurance coverage. If your family has a history of other critical illnesses, such as stroke, diabetes or muscular dystrophy, critical illness coverage could be of greater importance.

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