Life Insurers to change definition of Critical Illness

Life Insurers in Singapore are making the shift in the definition of critical illness next year (Aug 26, 2020). Life Insurance Association Singapore (LIA Singapore) said claims assessment and benefits will follow the definitions, and the terms and conditions stated in their existing policy contracts.

Life Insurers to change definition of Critical Illness
Life Insurers to change definition of Critical Illness

What does all these means?

In Singapore, the definition of Critical Illness have been standardized so that there will be no dispute on why an insurer is able to claim for a Critical Illness and another insurer is unable. The last time the definition of Critical Illness have been updated was in 2014.

If you have bought your Life Insurance with the Critical Illness rider from 2014 until now, you can view the definition of the Critical Illness here (Critical Illness Definitions 2014). Your policy will continue to follow this current definition.

Moving forward, new policies will follow the new definition if you buy your policy after Aug 26, 2020.

How will you be affected?

As mention above, if you buy your life insurance with the critical illness rider before Aug 26, 2020, your policy definition will follow the critical illness definition for Version 2014.

New policies after Aug 26, 2020 will follow the new definition.

For policies from now until Aug 26, 2020 the insurer can adopt either Version 2014 or Version 2019 (Critical Illness Definitions 2019) definitions. If the insurer chooses Version 2014, the CI product must be withdrawn by 26 August 2020.

Why was this done?

The objective of the review exercise was to bring LIA’s 2014 common definitions up to date and aligned with advances made in medical technology and medical practice and also to address areas of ambiguity based on insights gained from the past five years of experience.

The definitions of 21 CIs were revised whilst 16 definitions remained unchanged. The names of 14 CIs were enhanced to better reflect the intent of coverage.


Will this be better for me?

This is very subjective and you will not be able to find an absolute answer. Insurers or the LIA will not commit to this answer. Instead of asking this question, perhaps a better question will be whether you are well-insured or not.

A working adult in Singapore has critical illness cover of just $60,000, well under the LIA recommendation of about $316,000 which translates to about 3.9 times the average annual pay of $81,663. These are just ball park figures give a guide on what you should have.


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