STORY OF THE WEEK: We Need To Talk About Critical Illness Cover - Breakfast Briefing Report From Singapore

Tom Burroughes

4 November 2016

Talking to clients and prospects about the value of critical illness cover, a market so far relatively young in the Asian region, is a real value-add proposition and one that wealth managers should embrace, a recent Breakfast Briefing in Singapore heard.

Stories of how the lives of business owners and senior professionals have unravelled, causing major disruption and stress, because they lacked this form of cover were shared with an audience that gathered recently at the Swissôtel The Stamford to discuss critical illness cover (CIC). The event was called A Wake-Up Call for Asia’s HNWs – Is Your Human Capital Properly Protected Against Critical Illness? It was sponsored by do this is that they know they are going to have a financial burden if a parent falls ill,” she said.

FPI’s Simpson said that with lump sums, it is important to understand that only up to 20 per cent of the amount will be needed to cover the actual medical costs for a particular condition; however, if a person comes down with a critical illness it is often the case that such a person may have another health issue later on. That is why the first critical illness policy needs from the outset to be a strong one, he said.

Deutsche’s Smallwood discussed how, in conversation with clients in Singapore, he comes across the situation where clients, aged in their 40s or 50s and often with low costs on areas such as education, are spending considerable amounts on their own lifestyles but not appreciating the need to protect against serious trouble from a critical illness.

“For people who have critical illness cover and for people having to make claims, they have in effect protected some of that lifestyle from disruption caused by a critical illness,” he said. Smallwood said it is important to distinguish between standard medical insurance, which is designed to cover the specific medical costs of an illness or accident, and CIC, where the payout of a capital sum can be used to mitigate the additional incidental costs of a serious medical event, such as relocating or funding an income gap or long-term income reduction.