• Daniel Lee

What you need to know about the revised critical illness definition

On August 2019, the life insurance association has made an announcement on the implementation of new Critical Illness definition that is to be adopted by the industry.


The details are as follows:

  • The definitions of 21 CIs were revised whilst 16 definitions remained unchanged.

  • The names of 14 CIs were enhanced to better reflect the intent of coverage

  • The Undertaking is to be complied by insurer no later than 26 August 2020.

  • Existing policy owner will not be affected by the changes

On and after 26 August 2020, CI products using Version 2014 definitions may no longer be sold in Singapore.


So what changed?

Here ‘s an overview of the CI headers and their respective changes in bold. An asterisk has been appended to critical illnesses with changes to the wording of their definitions.

1. Major Cancers* 2. Heart Attack of Specified Severity* 3. Stroke with Permanent Neurological Deficit* 4. Coronary Artery By-pass Surgery 5. End Stage Kidney Failure 6. Irreversible Aplastic Anaemia* 7. End Stage Lung Disease 8. End Stage Liver Failure 9. Coma* 10. Deafness (Irreversible Loss of Hearing)* 11. Open Chest Heart Valve Surgery 12. Irreversible Loss of Speech* 13. Major Burns 14. Major Organ / Bone Marrow Transplantation 15. Multiple Sclerosis* 16. Muscular Dystrophy* 17. Idiopathic Parkinson’s Disease* 18. Open Chest Surgery to Aorta 19. Alzheimer’s Disease / Severe Dementia* 20. Fulminant Hepatitis 21. Motor Neurone Disease 22. Primary Pulmonary Hypertension 23. HIV Due to Blood Transfusion and Occupationally Acquired HIV* 24. Benign Brain Tumour* 25. Severe Viral Encephalitis* 26. Severe Bacterial Meningitis 27. Angioplasty & Other Invasive Treatment For Coronary Artery 28. Blindness (Irreversible Loss of Sight)* 29. Major Head Trauma* 30. Paralysis (Irreversible Loss of Use of Limbs) 31. Terminal Illness 32. Progressive Scleroderma* 33. Persistent Vegetative State (Apallic Syndrome) 34. Systemic Lupus Erythematosus with Lupus Nephritis* 35. Other Serious Coronary Artery Disease* 36. Poliomyelitis* 37. Loss of Independent Existence*


Some examples of these changes include:

For “Heart Attack of Specified Severity”, the preceding reference to “Death of heart muscle due to obstruction of blood flow” revised to “Death of heart muscle due to ischaemia”, to make it clear that both Type 1 Myocardial Infarction and Type 2 Myocardial Infarction are covered.


“Deafness (Loss of Hearing)” amended to “Deafness (Irreversible Loss of Hearing)” and the term “irreversible” defined, to recognise the possibility of future medical treatments that can restore hearing to some level as medical advances are made. Before this amendment, the definition does not cover reversible hearing loss.


So what? How will that affect you?

With the new changes made, the “grey” area has been addressed in areas of claim.


Now that the definitions have been made more specific and less lenient, it may be harder to qualify for a claim under the new definitions.


On the other hand, it may be easier to administer claims in event where you qualify under the new definitions.


Depending on your priorities, one may favor the older definitions over the newer ones.


If that is the case, it is best if you were to purchase your life insurances WITH the older definition before insurers starts to adopt newer definition in compliance with LIA’s requirement.


This is exceptionally important for people who

  • have not bought any insurance yet

  • thinking of increasing your insurance coverage

  • thinking of reassessing your insurance portfolio to identify cost saving opportunities

If you need help on insurance planning or need someone to walk you through your options in the market today, contact me here.

Disclaimer:

This article is meant to be the opinion of the author and is for information purposes only.

This article should not be seen as a financial advice

This advertisement has not been reviewed by the Monetary Authority of Singapore


Source of information:

https://www.lia.org.sg/media/2159/mu5819-part-1-of-4-_lia-ci-framework-2019.pdf


https://www.lia.org.sg/media/2160/mu5819-part-2-of-4-_lia-ci-framework-2019_lia-definitions-for-37-cis.pdf


https://dollarsandsense.sg/lias-critical-illness-ci-definitions-have-changed-heres-what-you-need-to-know-about-ci-plans-you-bought-or-intend-to-buy/

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