Only 15% of Singaporeans have adequate critical illness coverage

The Life Insurance Association recommends critical illness coverage 3.9 times the annual income.

Only 15% of Singaporeans have critical illness coverage that meets the Life Insurance Association’s recommended level of 3.9 times the annual income, according to an AXA survey.

One in two (50%) of Singaporeans aged 18-65 said they feel financially ready for the onset of a critical illness. Amongst those who said they feel this way, six in 10 (64%) cited having insurance protection as a reason for their confidence.

However, eight in 10 (79%) did not have the recommended amount of protection; and 92% did not have an accurate view of the amount of coverage needed to sustain through recovery. In addition, 82% of sole breadwinners did not have adequate critical illness coverage and 27% said they did not have any critical illness coverage at all. 

Moreover, 59% of homemakers and more than 35% of those who are self-employed said they did not have any critical illness protection.

Inaccurate knowledge could be a factor as 95% have one or more misconceptions about critical illness plans or coverage, the insurer said. Common misconceptions include critical illness plans paying out regardless of diagnosis stage (66%), the belief that hospitalisation plans will cover every need (54%), and that critical illness plans are expensive (72%).

Furthermore, amongst those who said they feel financially unprepared for critical illnesses, 31% cited a lack of financial knowledge as a reason.