Insurance
Critical Illness coverage after age 75
By Derek  •  October 10, 2007
I recently voice my concerns about Critical Illness (CI) coverage in sgfunds. "Maybe I'm just paranoid but I always imagine myself getting a critical illness when I'm old. It doesn't help when the government says that 1 in 2 will live till 85yrs. I imagine the worst case scenario that I'm all alone and barely surviving with my retirement fund. How do I cover myself if I have a CI after age 75?" After a healthy exchange of views, the solutions are as follow:
  1. WholeLife with CI. Premium payable till age 80/85 or so.
  2. Limited Pay WholeLife with CI. Premium payable for 15/20/25 years or so. Premium is more expensive than (1).
  3. Term with CI till age 90/99
  4. Integrate CI need into retirement sum. For example, you estimate $1.2mil for retirement, and $200k for CI need after retirement, then your target retirement sum is $1.4mil. Before retirement, cover CI need with Term with CI till retirement age, premium is lower than (3).
  5. Similar to (4) but separate the investment component for CI need from retirement portoflio. Also use Term with CI till retirement age. Invest the rest with reasonable expected return so that at the expiration of term, the investment amount is equal or more than the sum assured.
The above are ideal cases and not meant to be one-size-fit-all. Based on your needs, financial savvyness, cash flow and other considerations, you may need to make adjustments and allowance for certain things. If you have noticed, I have omitted the option to use an Investment Link Plan (ILP) for CI coverage because it is too dependent on your investment returns, hence too risky. The purpose of insurance is to transfer risk. For me, since I already have a traditional WholeLife plan, I will be exploring option 1, 4 and 5.
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By Derek
Derek is an investor who follows Peter Lynch style of investing. He prefers to use simple and straight forward information for stock analysis. He started TheFinance.sg with the intention to bring together all bloggers and professionals who are interested or already in the area of Finance and Investing, and to create a community where everyone is free to write and to share their articles, experience and opinions.
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3 Comments

3 responses to “Critical Illness coverage after age 75”

  1. mooncake says:

    Hi, I got your blog add from CNA. Which co offers term + CI to say, about 85? Are the conditions very strict? Thanks.

  2. Derek says:

    Hi mooncake,

    You can try AXA LivingEnhancer or HSBC Value Long Term Plus. Sorry, couldn’t provide u with more, you can try consulting a qualified IFA.

  3. mooncake says:

    Hi Derek
    Thanks for your tips. I will most certainly look them up as my current CI plans only provide to age 60, but most big illnesses start after that. Thanks for taking the trouble to update the stock picks! Happy blogging.

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