You may think critical illness insurance can provide financial support for your family, but if you are not careful, you will not be paid even if you suffer one of the defined critical illnesses.
Do you know if a person’s death happens immediately after a heart attack, even if he has a critical illness insurance, his or her family may not receive any payout from the insurer?
This is because there is a killing clause called “survival period” in some critical illness insurance policies. You may have never heard of it, but you really need to take note. Here is why…
People always jokingly say “you can die in Singapore but you cannot survive if you fall sick”, so some people purchase only critical illness coverage without death benefit. They either want to save some premium or they think death coverage is irrelevant to them.
However, unknown to many people, such standalone critical illness insurance policy normally has a clause called the “survival period”.
Critical illness survival period is usually defined as this
The survival period is the length of time you, the insured, must survive after you have been diagnosed with a covered critical illness. Once you have passed the survival period, the insurance benefit will be paid.
The length of survival period varies among different insurers, it can be 14 days or 30 days, etc.
In another word, If the insured person dies within the survival period, your family will not receive a critical illness insurance payout at all!
Why? Because critical illness insurance benefits are meant to be used by the insured as a living benefit to recover from illness, not a Death benefit.
Now you can think about it. Singapore’s top critical illness is cancer, but the second leading cause of mortality is heart disease. Heart disease accounted for 20.1% of deaths in Singapore in recent years, while cancer accounted for 29.3 percent. Many heart disease patient may not be able to pass the survival period.
Time to review your insurance policy
It is important to make sure that you purchase critical illness insurance as a rider of a life insurance. This clause will not apply to you because you are covered death benefit anyway.
If you have any more question about critical illness insurance, leave your comments below, I will try to help.