Don't get short changed when claiming your major illness benefits

When diagnosed of a major illness, you are not alone. Here’s what you can do to prevent the above. If you feel that there is a change in your health, I strongly advise that you seek medical consultation at the soonest possible. I will let the medical practitioner do what they are good at. Similarly, you should seek advice from a professional financial planner on the financial impacts of risk management.

While insurance agents can SELL you insurance products that are tied only to their company, the obvious choice is either of term or whole life (with accelerated or additional critical illness) insurance or disability insurance, etc.  If you are not covered totally, you will get short changed

The concerns of Hospital and surgical expenses, disability income, long term care income, etc may have been 'overlooked' by your insurance agents or may not surface as some insurers do not provide or carry these products. Of course, you may seek the advice of several insurance agents or ONE independent financial adviser depending on your preference. Not covering on all aspects of risk management will get you short changed.

What to do? Depending on your family medical history, you will derive the probability of being diagnosed of a major illness.

Planning? Let us take Cancer for the sake of a discussion. I would consider the following financial impacts on being diagnosed of a major illness.

·         Potential loss of income

·         Time horizon for loss of income

·         Family expenses and medically related additional expenses

·         Need or nursing care

·         Pre, in and post hospitalization expenses

·         Other outpatient consultation expenses, radiotherapy, chemotherapy, etc.

Your next step is to list and prioritize the above.

Where or who to seek advice from? Having equipped with more knowledge, you are now prepared to seek your choice of professional advice. Risk transfer is one risk management technique and often used in financial risk management. The recommendation of insurance plans could come in the form of term insurance or whole life. For a discussion, please read Risk Management: Considerations before choosing Term or Whole Life Insurance plans. Having the adequate amount of coverage according to your list of financial goals, when implement and executed will not get you short changed.

News article. In a recent article ‘Cancer rates set to surge’ dated May 20, 2011 it was mentioned that ‘every two hours, someone in Singapore dies of cancer. (This is rather alarming.) Over the next decade, it could get worse!

On a separate note, researches had shown that most Singaporeans are under insured. As Singaporeans are not accustomed to IFA, they buy from their insurance agent. My assumption is that tied insurance agents sell insurance that are limited to what their company can offer. Training may not be provided for areas they may not offer solution and hence the public just buy what their insurance agents can offer. My suggestion is that the relevant authorities can look into this area of training. But what could the insurer do to offer solutions ‘to all areas of risk management’. There is none at the moment! This may seem to be the ‘chicken and egg’ problem.

On part 2 of this article, I would offer the possibilities of 'term of whole life insurance' for the above problem. I assure you that you will be shock and enlightened. However, the decisions is always your! Click here, later.