PSA: Changes to Critical Illness Definition to Take Effect From 26 Aug 2020
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PSA: Changes to Critical Illness Definition to Take Effect From 26 Aug 2020

Rachel Yeo
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Planning to buy a life insurance policy with critical illness coverage but haven’t done so?

Now is a good time as any to review your critical illness coverage (or lack thereof).

Earlier in June, Today reported that despite S$47.6 million in life and health insurance premiums being deferred between April 1 and June 5; insurers told the paper that:

it will not be a reason for them to raise premiums.

In addition, you might want to review your critical illness coverage as you’ll be affected by the changes to the definitions of critical illnesses.

According to the Life Insurance Association (LIA) Singapore, these changes will take effect from 26 August 2020.

And they involve the tightening of certain critical illness (CI) definitions, like:

  • “Deafness (Loss of Hearing)” will be amended to “Deafness (Irreversible Loss of Hearing)”, and
  • “Major Cancers” to “Major Cancer”

Naturally, this would result in more exclusions

Michael Scott Saying No
Source: The Office | Giphy

How will these revisions affect you?

Let’s find out.


TL;DR: Changes To Critical Illness Definitions That Will Be Implemented

Pros Cons
1. Those suffering from Thalassaemia Major or Haemophilia can now get covered under the HIV CI condition.
1. Stricter, more exclusions for Benign Brain Tumor, Coma, Stroke, Aplastic Anaemia, Heart Attack, and Major Cancers among other things.



2. Viral Encephalitis:
Previously, viral infection has to be the cause for it. Now, scope is expanded to include all causes, not just viral infection.
2. More requirements set up for claims to be made. E.g, Other serious coronary artery disease now need invasive procedures to confirm it. Viral Encephalitis, Poliomyelitis all need confirm diagnostic tests.
3. Clearer definitions
will lead to reduced ambiguity for the claiming process
3. The addition of 'irreversible' to deafness, blindness, aplastic anaemia.

- This means such diseases are harder to claim now, as you have to prove that it is both chronic and irreversible.

The changes tighten the definitions and make them more specific.

Meaning there’s lesser ‘grey area’ to play with when it comes to making claims on your critical illness (CI) policy.

This should ultimately keep premium costs in check and continue to keep important insurance policies affordable for the general public.

I would think that it also helps remove ambiguity so you won’t be stuck in a situation where you think you’re covered, only to find out upon claiming that you’re not.

Note: LIA Singapore has stated that policyholders with existing CI policies are not impacted by the new definitions.

Changes to Critical Illness Headers

cinderella change dress
Source: Giphy

Changes to the definitions of critical illnesses include amendments to the headers.

Here’s a quick look at the changes that might affect you:

Critical Illness (Condition)Change of Header? Header Of CI changed to...Changes to current definition?
Major CancersYESMajor CancerYES
Heart Attack of Specified Severity
NO-YES
StrokeYESStroke with Permanent Neurological DeficitYES
Coronary Artery By-pass SurgeryNO-NO
Kidney FailureYESEnd Stage Kidney FailureNO
Aplastic Anaemia Y Irreversible Aplastic Anaemia
YESIrreversible Aplastic AnaemiaYES
End Stage Lung Disease
NO-NO
End Stage Liver Failure
NO-NO
ComaNO-YES
Deafness (Loss of Hearing)YESDeafness (Irreversible Loss of Hearing)YES
Heart Valve SurgeryYESOpen Chest Heart Valve SurgeryNO
Loss of Speech YESIrreversible Loss of SpeechYES
Major BurnsNO-NO
Major Organ / Bone Marrow TransplantationNO-NO
Multiple SclerosisNO-YES
Muscular DystrophyNO-YES
Parkinson’s DiseaseYESIdiopathic Parkinson’s DiseaseYES
Surgery to Aorta YESOpen Chest Surgery to Aorta
NO
Alzheimer’s Disease / Severe DementiaNO-YES
Fulminant HepatitisNO-NO
Motor Neurone Disease
NO-NO
Primary Pulmonary HypertensionNO-NO
HIV Due to Blood Transfusion and Occupationally Acquired HIVNO-YES
Benign Brain TumourNO-YES
Viral EncephalitisYESSevere EncephalitisYES
Bacterial MeningitisYESSevere Bacterial MeningitisNO
Angioplasty & Other Invasive Treatment For Coronary ArteryNO-NO
Blindness (Loss of Sight) YESBlindness (Irreversible Loss of Sight)YES
Major Head TraumaNO-YES
Paralysis (Loss of Use of Limbs)YESParalysis (Irreversible Loss of Use of Limbs)NO
Terminal Illness
NO-NO
Progressive SclerodermaNO-YES
Apallic SyndromeYESPersistent Vegetative State (Apallic
Syndrome)
NO
Systemic Lupus Erythematosus with Lupus NephritisNO-YES
Other Serious Coronary Artery DiseaseNO-YES
Poliomyelitis NO-YES
Loss of Independent ExistenceNO-YES

If you’re interested to find out more, you can refer to the LIA Critical Illness (CI) Framework 2019 for more details.

A Summary of the Major Changes to the Definitions

With the numerous changes that are happening to the CI definitions, here are the more important ones that you should take note of:

Category Changes ( Major Changes + Added Definition)Changes ( Exclusions Added to Terms) Reason for Exclusion?
Major Cancers "Major Cancer diagnosed on the basis of finding tumour cells and/or tumour-associated molecules in blood, saliva, faeces, urine or any other bodily fluid in the absence of further definitive and clinically verifiable evidence does not meet the above definition" added to the definition. Skin confined primary cutaneous lymphoma and dermatofibrosarcoma protuberans" is specifically excluded now.

All bone marrow malignancies which do not require recurrent blood transfusions, chemotherapy, targeted cancer therapies, bone marrow transplant, haematopoietic stem cell transplant or other major interventionist treatment
Excluded terms are easily treatable and does not fulfill the intent of a severe stage coverage.
Heart Attack Death of heart muscle due to obstruction of blood flow changed to Death of heart muscle due to ischaemia.nil -
Stroke with Permanent Neurological DeficitChange in header, added exclusion. Secondary haemorrhage within a pre-existing cerebral lesion.
Irreversible Aplastic Anaemia
Aplastic Anaemia changed to
Irreversible Aplastic Anaemia.

Addition of Haematopoietic stem cell transplantation.
- -
Coma -For the above definition, medically induced coma and coma resulting directly from alcohol or
drug abuse are excluded
-
Muscular Dystrophy
The unequivocal diagnosis of muscular dystrophy must be made by a consultant neurologist.
--
HIV Due to Blood Transfusion and Occupationally Acquired HIV
Evidence for infection via blood transfusion is no longer required.

"The insured does not suffer from Thalassaemia Major or Haemophilia" has been removed.

Such cases are hard to find physical prood. There's no need for victim to go through the trauma of gathering evidence from contaminated blood transfusion after being diagnosed with HIV.
Benign Brain Tumour
Included exclusions:
Abscess, Angioma and Tumours of Skull Base.
-
Severe Encephalitis
Viral Encephalitis changed to Severe Encephalitis.

Permanent Neurological deficit has to be documented for at least 6 weeks.

Diagnosis has to supported by any
confirmatory diagnostic tests
permanent and permanent neurological deficit will not be “within” the definition. -
Blindness (Irreversible Lost of Sight)
The blindness must not be correctable by surgical procedures, implants or any other means.--
Other Serious Coronary Artery Disease
Has to be proven by by invasive coronary angiographyNon-invasive coronary angiography as diagnosis not acceptable.

Branches of the coronary arteries are not included.
-
PoliomyelitisDiagnosis has to be confirmed by a consultant neurologist or specialist in the relevant
medical field.
--

With the changes, there will be stricter exclusions for:

  • Coma
  • Heart Attack
  • Stroke, and
  • Major Cancers, amongst others.

Given that we won’t know what (illness) would hit us in the coming years, tighter definitions would mean less extensive coverage.

However, not all changes are bad…

Pros and Cons to the Critical Illness Definition Changes

Here’s an overview of the pros and cons of the changes being made to the CI definitions:

Pros Cons
1. Those suffering from Thalassaemia Major or Haemophilia can now get covered under the HIV CI condition.
1. Stricter, more exclusions for Benign Brain Tumor, Coma, Stroke, Aplastic Anaemia, Heart Attack, and Major Cancers among other things.



2. Viral Encephalitis:
Previously, viral infection has to be the cause for it. Now, scope is expanded to include all causes, not just viral infection.
2. More requirements set up for claims to be made. E.g, Other serious coronary artery disease now need invasive procedures to confirm it. Viral Encephalitis, Poliomyelitis all need confirm diagnostic tests.
3. Clearer definitions
will lead to reduced ambiguity for the claiming process
3. The addition of 'irreversible' to deafness, blindness, aplastic anaemia.

- This means such diseases are harder to claim now, as you have to prove that it is both chronic and irreversible.

So… Should I Buy A Critical Illness Cover Now?

You’re probably wondering if you should buy critical illness cover before the changes hit.

Source: Giphy

As with any kind of insurance, you should only buy critical illness coverage if you’ve assessed that you need it.

If you are sufficiently covered, there’s no need to rush to get a CI coverage just because of a few changes in definitions.

You’ll want to consider whether the current definitions are more lenient and to your advantage.

Or if the changes to be effected will be more beneficial to your case.

But if you’re already planning to get life insurance with CI coverage…

Check out my colleague Xue Miao’s comprehensive comparison of the best standalone Critical Illness policies in Singapore!010720-Best-CI-insurance-002But, when in need of insurance advice, you should always approach any licensed financial advisers that you trust, or visit our community platform that is dedicated to critical illness-related questions!

About Rachel Yeo
Breaking down complicated financial pieces into idiot-proof articles.
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