How to Plan for Critical Illness Coverage for Your Family and You

Critical illness protection isn't a particularly pleasant purchase. But if it can make you feel that way, even when you're in the pink of health, imagine the agony when a sudden illness strikes.
When life-threatening illness strikes, it’s regrettable and often too late to find ways to adjust our finances. Our minds are flooded with the well-being of our loved one, neglecting the impending financial collision.

As much as we dislike pondering over it, the cold reality is that critical illnesses, and any sudden medical issues, can cause a crippling dent on your financial standing.

Critical Illness Insurance Explained

Critical illness coverage can be purchased on its own, or added to life insurance policies. Some common coverage includes cancer, heart attacks, strokes, and organ failures. It’s important to examine the list of critical illnesses and details of each illness before making any commitment. Take your time to digest the information, and seek clarification from your Financial Planner whenever you’re uncertain.

Most critical illness insurance policies pay out a lump sum upon the diagnosis of a critical illness, or after having surgery. During this stressful period, you will need time to recuperate and are unlikely to return to work soon, causing a disruption to your income. The lump sum serves to cover your daily expenses so that your standard of living remains unchanged during the recuperation period. You may wish to include the medical costs in the lump sum, if your health insurance isn’t in place, or use it to make up for any loopholes for your existing policies.

Why Purchase Critical Illness Coverage?

At some point in our lives, we’ve heard, or even witnessed the devastating effects of what an illness can do. These threats are real, and their destructive effects cause a great deal of sadness, hardship, distress and dreams lost. On top of that, there are expensive medical costs to worry about. With medical advancements, we also see the rising medical costs in the treatment and prevention of illnesses.

It’s plain to see that critical illness coverage isn’t only meant for yourself, but also for the benefit of your family. It relieves an unwell family member of his or her financial obligation, and reduces the feeling of guilt one might have for causing financial stress to the family.

Review Your Existing Health Insurance

This is an essential step to take as you begin the planning process. It’s important to ensure that you’re not duplicating any coverage, as doing that would cost you more over time and result in the poor allocation of your funds.

Finding out what you already have, working out with your Financial Planner what your required amount is, and what the shortfall might be will help you to arrive at the ideal amount and the type of critical illness coverage you need.

How Much Critical Illness Coverage is Needed?

Extra insurance coverage isn’t like an extra investment, which pays off in the long run. It is an extra expense akin to losing money. With that in mind, do ensure that you have sufficient protection and nothing more than what you need. Your Financial Planner can help you to work out the actual amount based on your needs and requirements.

The worst case scenario is to realise that you aren’t adequately covered in the event the disease strikes. It’s therefore highly recommended that you have periodical reviews to ensure that your needs can be met with rising medical costs and inflation.


Critical illness protection isn’t a particularly pleasant purchase. But if it can make you feel that way, even when you’re in the pink of health, imagine the agony when a sudden illness strikes. Tackle these issues now, rather than wait till it’s too late. It’s reassuring to know that you’ve done your best to protect yourself and your family, and that necessary medical treatment can be sought without having to worry about finances.


Our team of consultants are here to help. Drop us an email.


Jamson Chia graduated from The National University of Singapore in 2003 with Bachelor of Engineering (Hons). Possessing an interest in financial planning, he furthered his education, and obtained the prestigious title of a Certified Financial Planner (CFPCM) in 2007. He is also one of the few privileged advisors in his company to attain the Business Insurance title.

Jamson currently heads the team as an Financial Services Director, where he is responsible for providing quality service and advice, especially in the Small and Medium Enterprises and High Net Worth Market. He is also responsible for grooming new talents, where he holds an impressive track record. Various consultants under his training have qualified for numerous awards ranging from AIA’s Million Dollar Club, to the highly acclaimed international Million Dollar Round Table (MDRT) award.

Within the first 5 years of his career, Jamson has achieved an admirable feat of being a member of the Million Dollar Round Table for 3 consecutive years, and he is currently one of the youngest directors in AIA.

Jamson is a Financial Services Director with AIA. The statements or opinions expressed on this site are his own, and do not represent those of AIA.

Follow Strategic Alliance on Facebook
Follow Strategic Alliance on LinkedIn

This post first appeared on LinkedIn.