3 Things to Keep in Mind When Calculating How Much Critical Illness Insurance You Need

1. 3 Things to Keep in Mind When Calculating How Much Critical Illness Insurance You Need Critical illness insurance  provides you with a lump sum pay-out if you are diagnosed with any of the critical illnesses covered in the policy. LIA Singapore has outlines 37 critical illnesses that require coverage including heart attack, end-stage kidney failure, and cancer. The onset of any of these conditions may require you to stop working as you seek life-saving treatment. While your medical insurance will cover hospitalisation costs, the critical illness lump sum pay-out will come in handy to help you meet many financial obligations such as your mortgage payments, grocery bills, and other living expenses. Therefore, it is very important to choose the right sum assured foryour critical illness insurance policy. To help you out, we have listed 3 things that you must factor in when calculating the critical illness coverage that is ideal for your financial needs.

2. Current income • A critical illness can take you a few years to recover. You may have to ask forunpaid leave from your job while you receive treatment and recuperate at home. However, the bills and expenses do not take the same break. Therefore, it is advisable to have a sum assured that is equal to 4 to 5 years of your current annual income. This is because you probably won’t be able to start work immediately after you have recovered and would still need some time adjusting to a routine.

3. Expenses during recovery • Recovering from a critical illness can be a long process, and sometimes expensive, process. It can take a couple of years and your costs of living will increase in order to accommodate your new needs. For instance, prior to falling ill, you may have managed to run your home on your own but now, you might need to hire domestic help. Thus, when deciding the amount of critical illness coverage you need, do factor in the possibilities of added expenses includingthe salary for your domestic help or home modifications for accessibility.

4. Dependents in the family • Finally, you must factor in the number of dependents who actively rely on you for financial support. Remember that when you fall ill and seek treatment, your dependents will probably have no one to turn to. So, when deciding on your critical illness policycritical illness policy , make sure that the coverage payout will suffice to pay for various costs such as your child’s school fees for a couple of years, your spouse’s needs, and so on. As you probably will not have an active income while ill, it is vital that you do not exhaust your hard-earned savings in supporting your loved ones. • These are the 3 most important factors to keep in mind when calculating how much critical illness insurance you need. Do speak to an insurance consultant for advicethat is specific to your finances. We hope this article helps you. Take care and stay in good health!

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