Below are part of the articles from The Sunday Times, read the full stories here.

Nearly everyone is cutting back on his spending.

Luxury items are out for many people, but others are also holding off on the purchase of insurance products such as investment-linked insurance plans (ILPs).

But no matter how grim the economy, experts warn that it is most unwise to defer basic protection needs against death and illness.

As an added incentive to buy such policies, insurers recently launched innovative critical illness products which attempt to offer enhanced coverage.

Critical illness plans

In a nutshell, a critical illness policy pays out the sum that is insured upon the diagnosis of any of 30 specified critical illnesses such as cancer and heart attack.

This cover benefit is typically bundled as an optional rider with a basic whole life, term or an ILP.  …

For the bundled plans, an ‘accelerated’ critical illness rider with a life policy will pay out the insured sum upon diagnosis of any of the 30 critical illnesses and the policy terminates with no death benefit remaining.

Plans with an ‘unaccelerated’ rider will pay out a critical illness claim upon diagnosis but the death benefit remains and is payable upon the insured’s death. That is, as long as premiums continue to be paid.

Some consumers feel that one downside of a critical illness benefit is that it usually allows claims only when the insured person is in the more advanced stages of a critical illness. It is no wonder that a common complaint is that it pays the claims only ‘when the person is about to die’.

For instance, the definition for cancer is ‘a malignant tumour characterised by the uncontrolled growth and spread of malignant cells and the invasion of tissue’.

This excludes non-invasive ‘cancer in-situ’, which refers to cancerous cells that have not yet invaded the surrounding or underlying tissue.

With medical advances and the growing emphasis on early illness screenings, you are likely to detect critical illnesses earlier than before. Financial support from an early critical illness claim payout will help patients seek treatment early.

‘An earlier benefit payout based on less stringent criteria gives better peace of mind,’ said Mr Tan Siak Lim, Alpha Financial Advisers’ business unit director.

This article was first published in The Straits Times.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
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