I am aware that the typical argument for having a CI insurance is because we just really don't know what will happen in the future and it's better to be protected. But is it really worth it paying for a high premium if, say, the money you will receive can be covered by your savings / investments instead? Let's say that one usually contracts a critical illness during an old age by which time, one already has accumulated enough savings to cover expenses during the period of recuperation.

Or should I concentrate on getting insured when permanent disability strikes by having a constant stream of income up to a certain age (say 65)?


I guess the best option in the end depends on your legislation, and maybe on the local insurance "habits" - I don't know anything singapore, but here some general thoughts about the problem.

  • What is already covered by your "normal" health insurance?
  • Taking an insurance vs. covering costs by savings is not a black-and-white decision. You may be able to get better terms for the insurance if you ask for a policy with patient contribution. And you may decide to go for a lower coverage given your savings.

More specialized thoughts:

  • First of all, I'm in a legislation where critical illness insurance is unusual, as treatment costs are covered very well by health insurance. People here rather go for disability insurance.
  • Disability insurances here usually have an option to increase the coverage (monthly pension in case of disease-related inability to work) about a certain percentage every year. This is meant to compensate inflation. However, you can skip these increases (both increasing and skipping the increase are subject to some conditions) and thus lower the real value of the coverage and the fees as you build up your savings.
  • Disability in terms of these insurances is not something that is really unlikely: at least as the contracts are here, these are also for the case that you have a longer disease (or long recovery from an accident) and are not able to work for several months, but go back to work later on.

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