Singapore’s top killer may be cancer, but the second leading cause of mortality is heart disease. According to an Asiaone article, Heart disease accounted for 20.1 per cent of deaths in Singapore in 2008, while cancer accounted for 29.3 per cent.
Many people are aware of the risk of such critical illnesses and have purchased critical illness insurance. However, many might be shock to know if death happens immediate after a heart attack, their family may not receive any payout from the insurer. Why?
People always jokingly say “you can die in Singapore but never fall sick”, so some people purchase only critical illness coverage without death benefit. However, such standalone critical illness insurance policy normally has a clause called the “survival period”.
The survival period is the length of time you, the insured, must survive after you have been diagnosed with a covered critical illness. Once you have passed the survival period, the insurance benefit will be paid. The length of survival period varies among different insurers, it can be 14 days or 30 days, etc.
If you, the insured person, dies within the survival period, your family will not receive a critical illness insurance payout. This is because critical illness insurance benefits are meant to be used by the insured as a living benefit to recover from illness, not a Death benefit.
If, however, you purchase critical illness as a rider of a life insurance, the clause does not apply to you because you will be paid death benefit anyway.
It is time to review your insurance policy and see if such clause is in your insurance contract. If in doubt, contact your financial adviser.