Redefine Critical Illness

People buying life insurance polices from Aug 26 next year will notice changes to the definitions of critical illnesses, which may impact how policyholders are covered by the insurers.

For instance, "Deafness (Loss of Hearing)" has been amended to "Deafness (Irreversible Loss of Hearing)", with the term "irreversible" defined to recognise the possibility of future medical treatments that can restore hearing to some level as medical advances are made. 

Making the announcement on Thursday (Aug 29), the Life Insurance Association Singapore (LIA Singapore) said claims assessment and benefits will follow the definitions, and the terms and conditions stated in their existing policy contracts.

However, it added that policyholders with existing critical illness policies are not impacted by the new definitions.

LIA Singapore said all critical illness products based on definitions used from 2014, when the last update was done, may no longer be sold in Singapore from Aug 26 next year.

"This round of review addresses ambiguities that have arisen due to medical advancements and health trends in the past five years," said Mr Khor Hock Seng, president of LIA Singapore. 

"Especially with the rapidly ageing population and rising incidences of chronic illnesses here, regular reviews of the critical illnesses definitions will ensure that critical illnesses products stay relevant with changing times, and that the intended scope of coverage is clear to consumers," he added.

For example, with the critical illness "Heart Attack of Specified Severity", the reference to "Death of heart muscle due to obstruction of blood flow" has been 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.

All member companies of LIA Singapore and the General Insurance Association of Singapore will adopt the set of revised definitions.

LIA Singapore said the standardisation of critical illness definitions provides greater transparency for customers to easily assess and compare the different plans available.

Policyholders also have greater assurance in claims results with a reduced incidence of one insurer paying a claim and another rejecting it due to differences in definition applied for severe stage of the 37 common critical illnesses.

Standardisation of critical illness definitions was first introduced by LIA Singapore in 2003, which said the industry remains committed to reviewing LIA's common definitions once every three years.

In the last update in 2014, some of the 37 severe stage critical illness definitions were revised; and the maximum limit of 30 medical conditions per critical illnesses plan was abolished to allow for more medical conditions to be covered.

LIA Singapore said research findings have shown that over 90 per cent of all severe stage claims received by life insurers are for five critical illnesses: major cancer, heart attack of specified severity, stroke with permanent neurological deficit, coronary artery bypass surgery, and end-stage kidney failure.

There are nearly 548,000 people aged 65 or above, and the number will more than triple by 2030. The incidence of chronic diseases among both the young and old is also increasing.

Meanwhile, the Government's overall national healthcare spending has almost doubled since 2010, to reach $21 billion in 2016.