Active lifestyle? You need health insurance

We all know that life is uncertain. And to prepare for the future and unforeseen events it may bring, we're told constantly that insurance is crucial.

One of the reasons for this is that if you are struck with a disease such as cancer, or suffer a stroke or heart attack, you will be considered a person with "impaired health". Insurance can help give financial security, while you focus on recovery.

My Paper spoke to Ms Willni Low, a senior financial-planning consultant at Tokio Marine Life Insurance Singapore (TMLS), on the topic.

What is considered "impaired health"?

While "impaired health" may not be a commonly-used insurance term, at TMLS, its meaning may span from injury from an accident requiring surgical procedures or hospitalisation, to early stages of critical illnesses, and even to total and permanent disability.

In this age of rising medical costs, it is prudent to secure some financial protection before any incident - illnesses, accidents or occurrences of physical impairment.

Not all risks are insurable, and it may be difficult for one already with impaired health to purchase insurance policies.

What are some considerations to keep in mind when selecting a policy to cover impaired health?

One may consider the following factors:

YOUR LIFESTYLE

If you are outgoing and engage in a lot of outdoor activities, you may want to consider a personal accident policy.

FAMILY HISTORY

Some medical conditions may be hereditary. One may want to consider getting some advice on critical-illness and medical-expense insurance.

LIFE STAGE

The life stages that we go through are commonly categorised under childhood, young unmarried, young married, young married with children, married with older children, pre-retirement and retirement.

The need to have financial security in the face of impaired health applies to all life stages, especially groups that are more susceptible to deteriorating health conditions or getting injured.

DEPENDANTS AND CONTINUAL LIVING EXPENSES

We should plan beyond the medical costs for specific incidents of health impairment. When one is struck with a critical illness, it may render one unable to continue working in the same capacity and earning the same level of income.

We need to factor in the family's living expenses and contingent expenses, especially for those with dependants. For example, one may have young school-going children and would need to continue to support them.

REGULAR REVIEW OF PORTFOLIO

It is prudent to review one's insurance needs on a regular basis. It is recommended that one works through possible changes in family and financial situation with the assistance of a financial adviser.

Can you share some examples of products available?

There's Critical Illness Insurance, also known as Dread Disease Insurance, which pays a lump sum in the event that you are diagnosed to have a covered critical illness. The payment is not dependent on whether one is hospitalised, but according to a set of definitions when a claim is applicable.

It is commonly offered together with life-insurance plans.

Disability Income Insurance serves to replace a portion of your lost income when you lose the ability to work because of disability arising from an accident or illness.

Early Pay Critical Illness Insurance plans are getting more common - they pay a portion of the insured amount even in the early stages of a covered critical illness.

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