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

Rachel Yeo
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In case you didn’t already know, the changes to the definitions of critical illnesses (CI) announced by the Life Insurance Association (LIA) of Singapore in Aug 2019 will take effect on 26 Aug 2020.

After 26 Aug, all critical illness (CI) products based on the last 2014 CI definitions update will not be sold in Singapore. Instead, subsequent CI products sold will be based on the new 2019 CI definitions update. 

As such, all member companies of LIA and the General Insurance Association (GIA) of Singapore will need to comply and adopt the new standardised set of revised definitions by the above-mentioned date.

Also, if you are an existing policyholder with an existing critical illness plan, do note that you will not be impacted by the new definitions unless you have to renew your CI policy after 26 Aug.

This update involves the tightening of certain CI definitions, like:

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

However, there has still been quite a bit of ambiguity around this issue as just today (21 Aug 2020), The Business Times reported that the Monetary Authority of Singapore (MAS) has stepped in to put a stop to the misleading sale of CI plans.

We will be breaking down this news, take an in-depth look at the changes to the CI definitions as well as provide a status update on the insurers that have adopted the new definitions.


TL;DR: Ultimate Guide to The 2019 Critical Illness Definition Changes

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.

LIA Singapore made the following changes with these goals in mind:

  • Tighten the definitions and make them more specific, ensuring that the intended scope of coverage is clearer to consumers.
  • Reduce ambiguity that stemmed from medical advances and healthcare trends over the past five years.
  • Ensure that CI policies stay up to date and relevant to Singapore’s rapidly ageing population and to address the increasing number of chronic illnesses.
  • Standardise critical illness definitions to ensure greater transparency for customers to easily assess and compare the different plans available.

Disclaimer: The information is meant for educational purposes and does not regard any specific investment objectives, financial situations or particular needs any person might have and should not be relied upon as the provision of financial advice. When in need of insurance advice, you should always approach any licensed financial advisers that you trust.


MAS Intervenes to Stop Misleading Sales of Critical Illness Plans

MAS has stated that it received feedback about misleading sales practices with regards to the fresh CI definition changes.

Monetary Authority of Singapore building. Photo: Jason Quah

Reportedly, there have cases of some unscrupulous financial advisors (FAs) who have been exaggerating claims that the new definitions will make it harder for policyholders to make claims on more illnesses.

Some of these FAs were alleged to have used aggressive sales tactics to pressure consumers into purchasing insurance policies or investment products without doing the due diligence to ensure that their clients have taken the time to fully understand that the products are suitable for them.

In response, MAS issued a circular to MAS-licensed and exempt FA firms to remind their representatives not to engage in such sales practices.

In addition on June 22, the LIA reiterated in a press statement that:

Changes made to the Critical Illnesses’ definitions and names are meant to express the intent of the coverage with greater clarity, so that customers do not misunderstand what is being covered and what is not. There is no change to the intended scope of coverage, when compared against the definitions of 2014.

So do keep your eyes open.

To provide further clarity for you to make the best possible decision with regards to CI plans; let’s take a look at what are the changes.

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 exclusions for:

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

Pros and Cons of the Critical Illness Definition Changes

As such 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.

Don’t go rushing into purchasing insurance policies before fully understanding whether these products are suitable for you and align with your financial goals.

There’s no need to rush to get a CI coverage just because of a few changes in definitions.

If you don’t need a CI plan because you already have sufficient coverage, that’s ok.

Cutoff Dates For Insurers That Have Adopted the New 2019 Critical Illness Definition Changes

If you have carefully assessed that you need CI coverage, here is the latest information about which insurers have or have not adopted the new 2019 CI definition changes.

InsurerCut-off Date (2020)
Insurers that have adopted the new 2019 CI definitions
Etiqa-
Singlife-
Manulife15 August
NTUC17 August
AIA19 August
China Taiping19 August
Prudential19 August
AXA21 August
Insurers that have not adopted the new 2019 CI definitions
Aviva25 August
Tokio Marine25 August

Information accurate as of 21 Aug 2020.

Got Other Questions About Critical Illness Insurance?

Check out our SeedlyCommunity page dedicated to critical illness insurance-related questions!

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