Health x Wellness
85 percent of Singaporeans lack sufficient critical illness coverage
50 percent of Singaporeans feel financially prepared for the onset of a critical illness, but only 15 percent have sufficient critical illness coverage
According to a survey commissioned by AXA Insurance on Singaporeans’ financial preparedness for emergencies, 1 in 2 Singaporeans aged 18-65 said they feel financially prepared for the onset of a critical illness such as like cancer, heart attack, and stroke.
However, only 15 percent of respondents have critical illness coverage that meets the Life Insurance Association (LIA) Singapore’s recommended level of 3.9 times of annual income.
Compared to an earlier 2018 AXA survey, results showed that the ownership of critical illness insurance has grown from 52 percent to 72 percent.
Among the different types of emergencies, there were significantly more Singaporeans who said they feel financially prepared for minor emergencies such as daily medical needs (89 percent) and hospitalisation expenses (70 percent), compared to major emergencies like critical illnesses (50 percent) and death of family breadwinner (51 percent).
Many people in Singapore know by now the importance of life insurance protection and getting coverage for critical illness. With our survey, we wanted to uncover if people are truly prepared for the financial implications of critical illness. Not only do we need to ask ourselves ‘Are we covered?’ but also ‘Are we covered enough?’
Li Choo Kwek-Perroy, Managing Director, Life, AXA Insurance.
Among those who said they feel financially prepared for critical illnesses, 6 in 10 cited having insurance protection as a reason for their confidence. However, 79 percent did not have the recommended amount of protection, and 92 percent did not have an accurate view of the amount of coverage needed to sustain through recovery.
There is also concern regarding specific roles from the household pertaining to critical illness coverage and protection:
- 82 percent of sole breadwinners who shoulder the financial responsibility for their family did not have adequate critical illness coverage
- 27 percent of sole breadwinner said they did not have any critical illness coverage at all
- 59 percent of homemakers said they did not have any critical illness protection
- 35 percent of those who are self-employed said they did not have any critical illness protection
Singaporeans might have a false sense of financial preparedness due to misconceptions towards critical illness coverage
The survey found that 95 percent of Singaporeans have one or more misconceptions about critical illness plans or coverage. Common misconceptions include:
- Critical illness plans pay out regardless of diagnosis stage: Over 6 in 10 Singaporeans think that they will receive a payout from their critical illness plan regardless of diagnosis stage, even though some plans may exclude early stage critical illnesses.
- Hospitalisation plans will cover every need: 54 percent of Singaporeans believe that their hospitalisation plan will cover all their needs if they are diagnosed with a critical illness, despite the fact that there may be other costs such as insurance co-payments, medical appliances, supplements, and even their daily expenses that will continue to be incurred if they need to take time off work to recuperate.
- Critical illness plans are expensive: 72 percent think that critical illness plans are expensive
Photo by Sandy Millar on Unsplash
