Adjusting Critical Illness Policy Definitions to Emphasis Underlying Disease Rather Than Specific Surgical Procedures

Dr Hamid Razak asked the Prime Minister and Minister for Finance whether MAS will engage the Life Insurance Association Singapore on moving critical illness policy definitions away from being anchored to a specific surgical procedure, and towards being anchored to the underlying disease and its severity, so that insurance cover is not lost solely due to differing treatment approaches.

Mr Gan Kim Yong (for the Prime Minister): For severe stage critical illness (CI) policies, the Life Insurance Association, Singapore (LIA) periodically reviews and updates the definitions in its Critical Illness Framework to reflect changes in how critical illnesses are diagnosed and treated. Severe stage CI policies provide a lump-sum payout to help policyholders cope with the financial impact of a serious illness, rather than reimburse the cost of medical treatment or procedures. Some CI definitions therefore use established treatment procedures as objective indicators of disease severity, lengthy recuperation and consequent financial impact.

In its next review commencing in 2027, LIA will explore whether definitions for certain medical conditions and diseases can place less reliance on specified procedures, and more on the underlying disease and its severity. Any changes will require careful consideration as they affect the scope of coverage and claims experience. Premiums for such policies will also be affected as they are dependent on the probability of claims materialising. Updated definitions will apply to new products sold.