Singapore

Critical illness definitions in life policies to be amended

To keep up with medical advancements, definitions in life policies will be changed next August; existing policies not affected

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)", to recognise the possibility of future medical treatments that can restore hearing to some level as medical advances are made.

Making the announcement yesterday, the Life Insurance Association Singapore (LIA Singapore) said that policyholders with existing critical illnesses policies are not affected by the new definitions.

It added that claims assessment and benefits will follow the definitions and the terms and conditions stated in their existing policy contracts.

LIA Singapore said all critical illnesses 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 LIA Singapore president Khor Hock Seng.

"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.

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 illnesses 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 illnesses definitions was introduced in 2003 by LIA Singapore, which said the industry remains committed to reviewing the association's common definitions once every three years.

LIA Singapore said research has shown that more than 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 disease requiring bypass surgery and end-stage kidney failure.

There are nearly 548,000 people aged 65 or older here, and the number will more than triple by 2030.

The incidence of chronic diseases among both the young and old is also rising.

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

MEDICAL & HEALTH