Adjusting Critical Illness Policy Definitions to Emphasis Underlying Disease Rather Than Specific Surgical Procedures
Ministry of FinanceSpeakers
Summary
This question concerns an inquiry by Dr Hamid Razak on whether the Monetary Authority of Singapore will engage the Life Insurance Association Singapore (LIA) to base critical illness policy definitions on underlying disease and severity rather than specific surgical procedures. On behalf of the Prime Minister and Minister for Finance, Mr Gan Kim Yong explained that severe stage critical illness policies provide lump-sum payouts for financial impact, currently utilizing established procedures as objective indicators of disease severity and recuperation. In its next review commencing in 2027, the LIA will explore placing less reliance on specified procedures and more on underlying disease and severity for certain medical conditions. Such modifications require careful consideration because they will directly influence the scope of coverage, claims experience, and policy premiums. Any updated definitions resulting from the review will apply only to newly sold insurance products.
Transcript
36 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.