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Living longer in poor health? Here’s how you can prepare for costly medical bills
Almost half of Singapore residents worry about potential cost of medical treatments, survey reveals
Healthcare costs remain one of the top-of-mind issues for Singapore residents, a survey finds.
PHOTO: GETTY IMAGES
Kareyst Lin, Content STudio
Living longer is rarely seen as bad. But can you afford to live out those extra years comfortably if you fall ill?
Singapore Department of Statistics (SingStat) numbers reveal that men and women are living longer, at 80.7 years and 85.2 years respectively in 2022, compared with 73.9 and 78.1 years in 1993.
The downside is that the proportion of Singapore residents diagnosed with cancer at ages 70 years and above more than doubled across the five-year periods from 1968 to 1972 (16.3 per cent), and 2016 to 2020 (38.2 per cent).
These figures are from the Singapore Cancer Registry’s Annual Report 2020 released last December.
Individuals aged 60 to 69 years old also made up the largest proportion of newly-diagnosed cancer patients in almost every five-year period.
From 2016 to 2020, an average of 16,150 cancer cases were reported yearly across all age groups. This is a sharp increase from the average of 2,414 annual cases reported in the five-year period from 1968 to 1972.
While age is a factor, critical illnesses can strike at any age.
In their lifetime, about one in every four to five Singapore residents may develop cancer, according to a 2016 report by the National Registry of Disease Office (NRDO) based on data from 2010 to 2014.
Depending on the severity of their condition, patients risk losing their income if most of their time is spent focusing on recovery and treatments such as chemotherapy and radiation therapy.
“For most critically-ill patients, this makes it hard for them to retain a full-time job,” says Mr Roy Tang, assistant vice-president, Tiger Advisory Group, an agency branch representing Manulife Singapore.
Mr Tang, 34, has 13 years of experience in the financial advisory industry. About 40 per cent of his clients are aged between 35 and 50 years old, and another 40 per cent are aged 51 and above.
By the numbers
- 1 in every 4 to 5
Singapore residents may develop cancer in their lifetime, says a report by National Registry of Disease Office (NRDO) in 2016
- 44
Average number of people diagnosed with cancer every day from 2016 to 2020, reveals the Singapore Cancer Registry Annual Report 2020
- 49%
Of Singapore respondents worry about the potential cost of treatment should they be diagnosed with a serious illness, says the Manulife Asia Care Survey 2023
Health as a money concern
Little wonder then that healthcare costs remain one of the top-of-mind issues for Singapore residents.
The Manulife Asia Care Survey 2023 found that 49 per cent of Singapore respondents worry about the potential cost of treatment if they’re diagnosed with a serious ailment. Forty-two per cent said they are concerned about losing their job or income if they fall ill.
Published in March, the survey polled 1,037 Singapore respondents between late December 2022 and early January 2023. It covered 7,224 respondents in seven markets across Asia.
What can you do to ease your concerns? A critical illness insurance plan, which pays a lump sum payout if you are diagnosed with a critical illness covered by the policy, can help. The Life Insurance Association (LIA) has standard definitions for 37 severe-stage critical illnesses, including major cancer, stroke, and heart attack.
“(A critical illness insurance plan) can help to pay for your medical expenses and cushion the financial impact of an unforeseen and serious health scare,” Mr Tang says.
A worrying gap
But how much critical illness insurance coverage is enough? LIA advises that you have an insured sum that is equivalent to five years of your annual income.
This is based on the assumption that an average person may take five years to recover from a critical illness, to return to work, or to adjust his or her lifestyle needs.
For an individual earning $4,000 a month, the recommended insured sum would be $240,000.
“Amid other financial commitments such as housing, investments, and caregiving responsibilities, most people (without coverage) would find it challenging to fork out a five- to six-figure lump sum to cover their medical and living expenses for five years,” Mr Tang says.
The LIA highlighted a glaring gap in critical illness protection among working adults in Singapore in its 2017 report.
It found that an average working adult in Singapore has critical illness cover of just $60,000. The amount is a far cry from the recommended amount of about $316,000 by LIA, based on an annual income of about $81,000.
This means their policies would meet just 20 per cent or so of their needs if they are diagnosed with a critical illness.
Due to perceived higher risk by insurers, premiums of critical illness insurance plans tend to increase with age. Which begs the question: At what age does it get “too expensive” to consider purchasing a critical illness insurance plan?
“Never,” says Mr Tang. “The cost associated with critical illnesses, should you be diagnosed with one, will always be much more expensive than the premiums that you pay.”
Never too early to start
To safeguard against sudden financial strain, Mr Tang advises young adults to ensure sufficient critical illness insurance coverage as soon as they start working.
“The optimal time to purchase a critical illness insurance plan is when you are still young and healthy,” he explains.
Besides age, medical history and lifestyle (such as smoking and excessive drinking) are factors that could increase the premiums of critical illness plans.
But insurance is rarely at the top of young adults’ minds when they receive their first pay cheque.
Mr Tang observes that young adults are typically more concerned with immediate financial and lifestyle pressures. These could include giving their parents an allowance, affording the lifestyle they want, and achieving short-term goals such as paying for their wedding and first home.
For many, the turning point comes a few years down the road, when they realise how expensive medical treatments can be.
Mr Tang says: “It could be witnessing a friend or family member being diagnosed with a critical illness, that prompts the realisation that they need to be prepared for unforeseen events.”
Plug the early-stage gap
For working adults, Mr Tang recommends setting aside about 10 per cent of their monthly income for insurance premiums.
These should cover the must-have insurance plans: Life insurance, hospitalisation and personal accident plans, and critical illness coverage.
Life insurance provides a lump sum payment if you die, are terminally ill or suffer permanent disability. Hospitalisation plans reimburse your medical expenses, treatment bills, and hospitalisation costs. A personal accident plan will cover your medical expenses and loss of income that arise from an accident.
For those covered under their company’s group insurance, is it still worth paying for personal insurance plans?
Mr Tang advises against relying purely on employee insurance benefits. “Once you retire or leave the company, you lose the insurance coverage. If you have pre-existing conditions, these will not be covered by the subsequent insurance plans you purchase, or which your new employer provides.”
If you can afford it, Mr Tang also recommends buying an early-stage critical illness insurance plan.
“It has become more common for critical illnesses, such as cancer, to be detected at earlier stages due to advancements in medical technology and more frequent health screening among the general population,” he explains.
An early-stage critical illness insurance plan provides a payout for conditions not covered by a traditional critical illness plan, such as earlier stages of cancer. Typically, traditional critical illness insurance plans cover only advanced stages of cancer (defined as major cancer by LIA).
For many people, illness and death are taboo topics, especially among the older generation. In many families, the topic of insurance comes up for the first time when a health scare happens, observes Mr Tang.
“This needs to change,” he stresses.
He suggests building a habit of checking in with family members on their protection plans. These include understanding whether they are adequately covered, which agent to contact for claims, and whether there is a will in place, should the need arise.
“Don’t wait till your loved one is diagnosed with a serious illness to find out that they are not protected with insurance.”
This is the seventh of a nine-part series titled “Your wealth and well-being”, in partnership with Manulife Singapore.
