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2. Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 33  
6. TERMINATION O F COVER  
 
6.1 The coverage for an insured person will terminate when one of the following 
events  occurs : 
▪ death of the insured  person ;  
  
▪ date on which the insured person 
enters into full -time military service , 
except during National Service 
reservist duty or training  in 
accordance with the Enlistment Act 
1970 ; 
  
▪ the end of the policy period during 
which the insured person attains the 
maximum age covered under the 
policy (e.g. 80 years old);  
       
      
    Applicable to both  
individual and group  
policies  
▪ date on which the policy is 
terminated;  
  
▪ date of expiry of the period for which 
the last premium payment is made on 
account of the insured person’s 
insurance;  
  
▪ the total amount of claims made has 
reached the lifetime limit;  
  
▪ date of cessation of  the insured  
person  as an employee .     Applicable to group  
    policies only  
 
 
7. CLAIMS  
 
7.1 In the event of a claim, the  insured ( policy owner /employer ) is required to 
furnish the following supporting documents to the insurer:  
▪ claim form to be completed by the insured;  
▪ physician ’s statement by the attending doctor;   
▪ discharge summary; and  
▪ original medical bills.  
 
  

Health Insurance   
34 Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 7.2 These are the standard documents  required by the insurer to assess the claim. 
The insurer reserves the right to call for other necessary documents . As 
mentioned previously, for any patient claiming under an Integrated Shield Plan  
approved under Medisave, all he need s to do is to inform the hospital of the 
name of t he insurer, fill in a standard claim form and the hospital will file the 
claim on his behalf for inpatient expenses , through the MediClaim System. This 
applies to public hospitals and major private hospitals  in Singapore . 
 
7.3 The policy owner  is required to notify the insurer within a specified period of 
time (e.g. 90 days) after the date of incurring the medical costs.  
 
 
8. NOTICE No.: MAS 117 - TRAINING AND COMPETENCY REQUIREMENTS – 
HEALTH INSURANCE  
 
8.1 This Notice  issued on 26 January 2004 and last revised on 16 April 2020,  is 
issued pursuant to sections 71 and 154(4) of the Insurance Act 1966  and  
(a)  applies to:  
(i) a direct insurer;  
(ii) a direct insurance broker;  
(iii) an exempt direct insurance broker;  
(iv) a licensed financi al adviser; or  
(v) an exempt financial adviser,  
 
which carries on a business in relation to health insurance products, whether or 
not it carries on any other business; and  
 
(b) applies to —  
(i) any person employed by or who act as an insurance agent for a direct 
insurer, other than a Trade Specific Agent;  
(ii) any person employed by or who act for a direct insurance broker or an 
exempt direct insurance broker; or  
(iii) any person employed by or who acts a s an appointed representative 
for a licensed financial adviser or an exempt financial adviser,  
 
who provides advice on or arranges contracts of insurance or both, in respect 
of health insurance products.  
 
8.2 This Notice sets out the minimum examination requ irements and continuing 
professional development (“CPD”) requirements in respect of shield plans. 
Please refer to Appendix 2D  for Notice No: MAS 117 which has been entirely 
extracted from MAS website.  
 
8.3 The last revision of Notice No: MAS 117 on 16 April 20 20 also outlined certain 
relief measures during the COVID -19 situation as detailed in paras 7A to 7D of 
the Notice as detailed in Appendix 2D.  
 

2. Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 35  
APPENDIX  2A 
 
ABC Insurance Company (Singapore) Ltd  
21 Any Street, ABC Centre, Singapore 654321  
Tel: (65) 6789 8181   Fax: (65) 6789 8282  
 
MEDICAL EXPENSE INSURANCE  (WITH SUB -LIMITS)  
 
 
Core Benefits  Benefit Limits  
Room & Board Daily Limits  
(max.


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string_value:
90 days per Disability 
Period per Policy Year)   
$300  
Intensive Care Unit  
(max.15 days per Disability 
Period per Policy Year)   
In-Patient Doctor/ Specialist 
Consultation   
Pre-Hospitalisation Benefits  
(max. 30 days before date of 
hospitalisation)   
Post-Hospitalisation Treatment  
(max. 90 days after date of 
discharge)   
As Charged  
Surgical Benefits   
Emergency Dental Treatment   
Emergency Outpatient  
Accidental Treatment   
Emergency Ambulance Service   
Miscellaneous Hospital 
Expenses   
Annual Limit for Core Benefits  S$100,000  
Additional Benefits   
Outpatient  
Kidney Dialysis Treatment  
(annual limit)   
S$50,000  
 
Outpatient Cancer Treatment  S$50,000  
In-Patient Organ Transplant  S$50,000  
Lifetime Limit for Core Benefit 
& Additional Benefits  S$500,000  
Emergency Assistance Services  Available  
 
 
 
 
 
 
 
 
 

Health Insurance   
36 Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 
APPENDIX  2B 
 
ABC Insurance Company (Singapore) Ltd  
21 Any Street, ABC Centre, Singapore 654321  
Tel: (65) 6789 8181   Fax: (65) 6789 8282  
 
SCHEDULE OF SURGICAL BENEFITS  
 
Hospital  ward type  Any standard ward of a 
private hospital  Any standard ward of 
a restructured 
hospital  Any 4 -bed (B1) 
standard ward of a 
restructured 
hospital  
Inpatient hospital treatment  
Daily room, board and medical 
related services1 As charged  
Intensive care unit (ICU)1 
Surgical benefit  
Surgical implants 2 
Radio surgery  3,4 
Major organ transplant benefit 5 
Stem cell transplant  benefit 4 
Accident inpatient dental 
treatment 6 
Pre-hospital treatment  
 
(Accident and emergency (A&E) 
treatment within 24 hours prior to an 
inpatient treatment for the same 
injury  or illness  is covered.)  As charged up to 90 days prior to admission.  
 
or  
 
As charged up to 180 days prior to admission  
(panel specialist  in a priv ate hospital  with certificate of pre -
authorisation , restructure hospital  or community hospital ). 
 
 
 
Post-hospital  treatment7 
 
 
 As charged up to 180 days after discharge.  
 
or  
 
As charged up to 365 days after discharge  
(panel specialist7 in a private hospital with certificate of pre -
authorisation , restructure hospital  or community hospital ). 
Stay in a community hospital  8 As charged  
Inpatient  congenital anomalies 
(first diagnosed after a waiting 
period  of 12 months)  As charged  
Inpatient  pregnancy complications 
9 (after a waiting period  of 10 
months)  As charged  
Living donor organ transplant 10 
(after a waiting period of 24 
months)  S$50,000  
per lifetime  S$30,000  
per lifetime  $20,000  
per lifetime  
 
 
 
 
 
 
 

2. Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 37  
ABC Insurance Company (Singapore) Ltd  
21 Any Street, ABC Centre, Singapore 654321  
Tel: (65) 6789 8181   Fax: (65) 6789 8282  
 
SCHEDULE OF SURGICAL BENEFITS (CONT’D)  
 
Major outpatient treatment  
Outpatient kidney dialysis  
 
 
 
 
 
 
 
As charged  Outpatient erythropoietin  
Outpatient cancer treatment4  which 
includes:  
- Chemotherapy  
- External or superficial radiotherapy  
- Brachytherapy, with or without 
external radiotherapy  
- Immunotherapy  
- Stereotactic radiotherapy  
Major organ transplant – approved 
Immunosuppressant drugs  
Special benefits  
Extra  inpatient benefit for 5 critical 
illnesses  – heart attack of specified 
severity, major cancer4, stroke, end 
stage lung disease and end stage liver 
disease   
S$150,000  
per policy year   
S$100,00  
per policy year  
  
S$50,000  
per policy year  
Inpatient  psychiatric treatment11  
(after 10 months of continuous cover)  As charged up to 
60 days per policy 
year  As charged up to 
45 days per policy 
year  As charged up to 
35 days per policy 
year  
Inpatient  psychiatric treatment11  
(within 10 months of continuous cover)  S$500 per day up to 35 days per policy year  
Family discount for child(ren)  Yes Yes N.A.


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Free new -born benefit12 S$50,000 per policy year  N.A. 
Emergency overseas treatment13 As charged  
(pegged to costs of 
private hospital s in 
Singapore)  As charged  
(pegged to costs of 
restructured  
hospital s in 
Singapore)  As charged  
(pegged to costs of 
restructured 
hospital s in 
Singapore)  
Planned overseas treatment13 As charged  
(pegged to costs of 
private hospital s in 
Singapore)  As charged  
(pegged to costs of 
restructured  
hospital s in 
Singapore)  As charged  
(pegged to costs of 
restructured 
hospital s in 
Singapore)  
Inpatient and outpatient Proton Beam 
Therapy treatment14 S$25,000  
per policy year  S$15,000  
per policy year  S$10,000  
per policy yea r 
Inpatient and outpatient Cell, Tissue 
and Gene Therapy14 S$70,000  
per policy year  S$45,000  
per policy year  S$30,000  
per policy year  
Waiver of pro -ration factor benefit for 
outpatient kidney dialysis  N.A. As charged  
(if kidney dialysis is received at a panel 
private dialysis centre15) 
Preventive treatment for cancer16 As charged  
Final Expenses Benefit17 S$10,000  
 
 
 

Health Insurance   
38 Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 
ABC Insurance Company (Singapore) Ltd  
21 Any Street, ABC Centre, Singapore 654321  
Tel: (65) 6789 8181   Fax: (65) 6789 8282  
 
SCHEDULE OF SURGICAL BENEFITS (CONT’D)  
 
 
Pro-ration factor  Restructured 
Hospital  Class A ward /  
Unsubsidised short stay 
ward   
 
 
 
 
 
100%   
100%   
85%18 Private 
Hospital  Inpatient  
(including day surgery)    
Major outpatient treatment  50%18 35%18 
Community hospital –  
Unsubsidised ward   100%  85% 
Hospital outside Singapore  50%18 35%18 
MyShield annual deductible20 for life assured age 80 years and below next birthday  
Inpatient  
Class C ward  S$1,500  
Class B2 / B2+ ward  S$2,000  
Class B1 ward  S$2,500  
Class A ward / Private hospital  
S$3,500  
Hospital outside Singapore  
Subsidised short stay ward  S$2,000  
Unsubsidised short stay ward  S$3,500  
Day surgery  S$3,000  S$3,000  S$3,000  
MyShield annual deductible20 for life assured age 81 years and above next birthday  
Inpatient  
Class C ward  S$2,250  
Class B2 / B2+ ward  S$3,000  
Class B1 ward  S$3,750  
Class A ward / Private hospital  
S$5,250  
Hospital outside Singapore  
Subsidised short stay ward  S$3,000  
Unsubsidised short stay ward  S$5,250  
Day surgery  S$4,500  S$4,500  S$3,000  
Co-insurance  
(applicable to claimable amount 
after  MyShield annual deductible)  10% 
Maximum S$25,500 per policy year.  
 

2. Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 39  
 
ABC Insurance Company (Singapore) Ltd  
21 Any Street, ABC Centre, Singapore 654321  
Tel: (65) 6789 8181   Fax: (65) 6789 8282  
 
SCHEDULE OF SURGICAL BENEFITS (CONT’D)  
 
 
Maximum claim limits  
 
 
 
 
 
 
Policy year limit  S$1,000,000  
 
or 
 
S$2,000,00021 
(Panel specialist in a 
private hospital with 
certificate of pre-
authorisation, 
restructured hospital 
or community 
hospital )  
 
 
 
 
S$1,000,000   
 
 
 
 
S$500,000  
Lifetime limit  Unlimited  
Age limits (age next birthday)   
Last entry age  75 years old  
Maximum cover age  Lifetime  
 
 
 
 
 
 
 
 
 
 
  

Health Insurance   
40 Copyright reserved by the Singapore College of Insurance Limited [ Version 1.


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4] 
APPENDIX  2C 
 
Subsidy Level For Singapore Citizens & S PRs At Public Hospitals  
 
Ward Class/  
Service Type  Singapore 
Citizen  
Subsidy Level  Singapore 
Permanent 
Residents 
Subsidy Level  
Class B2  50-65% 25-40% 
Class C  65-80% 32.5-55% 
   
 
Only Singaporeans and Permanent Residents (PRs) are eligible for hospital 
subsidies. Subsidy level accorded depend on the choice of ward class and 
resident status. Subsidy level would also depend on your income level.   
 
With effect  from 1 November 2022, subsidies for acute inpatient care will 
be means -tested based on a patient’s per capita household income (PCHI). 
A single common subsidy framework for C and B2 Wards will also be 
applied. The revised subsidy framework is as shown belo w. 
 
Ward Class/  
Service Type  Singapore 
Citizen  
Subsidy Level  Singapore 
Permanent 
Residents 
Subsidy Level  
Class B2 /C 50-80% 25-50% 
   
 
 
Source:  MOH Website   
 
 

2. Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 41  
APPENDIX  2D 
 
Notice No    :     MAS 117  
Issue Date   :     26 January 2004  
 
Last revised on: 16 April 2020*  
 
(Refer to endnote for history of amendments)  
 
TRAINING AND COMPETENCY REQUIREMENT: HEALTH INSURANCE  
 
Introduction  
 
1. This Notice is issued pursuant to sections 71 and 154(4)  of the Insur ance Act 
1966  [“the Act”] and —  
 
(a) applies to —  
 
(a) a direct insurer;  
(b) a direct insurance broker;  
(c) an exempt direct insurance broker;  
(d) a licensed financial adviser; or  
(e) an exempt financial adviser,  
 
which carries on a business in relation to health insurance products, 
whether or not it carries on any other business; and  
 
(b) applies to —  
 
(i) any person employed by or who act as an insurance agent for a direct 
insurer, other than a Trade Specific Agent;  
 
[MAS 117 (Amendment) 2010, wef 11 Aug 2010]  
 
(ii) any person employed by or who act for a direct insurance broker or 
an exempt direct insurance broker; or  
(iii) any person employed by or who acts as an appointed representative 
for a licensed financial adviser or an exempt financial adviser,  
 
[MAS 117 (Amendment) 2010, wef 26 Nov 2010]  
 
who provides advice on or arranges contracts of insurance or both, in respect  of health 
insurance products.  
 
1A. This Notice sets out the following:  
 
(a) minimum examination requirements; and  
(b) continuing professional development (“CPD”) requirements in respect of 
shield plans.  
 

Health Insurance   
42 Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] [MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
Definitions  
 
2. For the purpose of this Notice —  
“Agents’ Registration Board” means the board set up by the General Insurance  
Association of Singapore (“GIAS”) to register any general insurance agent 
acting for one or more licensed insurers carrying on general business;  
 
[MAS 117 (Amendment) 2010, wef 11 Aug 2010]  
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
 
“business day” means any calendar day, other than a Saturday, Sunday or 
public holiday;  
[MAS 117 (Amendment) 2020, wef 16 Apr 2020]  
 
“exempt financial adviser” mean s a person exempt from holding a financial 
adviser’s licence under section 23(1)(a) to (e) of the Financial Advisers Act 
(Cap.


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110);  
 
“exempt direct insurance broker” means a person exempt from registration as 
a direct insurance broker under section 35ZN( 1)(a) to (ea) of the Act;  
 
[MAS 117 (Amendment) 2010, wef 11 Aug 2010]  
 
“health insurance product” means a life policy with accident and health 
benefits or an accident and health policy, but excludes such policy where 
accident and health benefits are pai d out only —  
 
(a) in the event of an injury to, or disability of, the insured as a result of an 
accident;  
(b) in the event that the insured becomes total and permanently disabled;  
(c) on the death of the insured by accidental cause; or  
(d) on the occurrence of a combination of the events set out in (a) to (c);  
 
[MAS 117 (Amendment) 2010, wef 11 Aug 2010]  
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
 
“integrated shield plan” has the same m eaning as in regulation 2 of the 
MediShield Life Scheme (Private Medical Insurance Scheme) Regulations;  
 
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
 
“MediShield Life Scheme” means the Scheme established under section 3 of 
the MediShield Life Scheme Act 2 015 (No. 4 of 2015);  
 
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
 
“non -integrated shield plan” has the same meaning as in regulation 2 of the 
MediShield Life Scheme (Private Medical Insurance Scheme) Regulations;  
 
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  

2. Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 43  
“relevant date” means the earliest of the dates mentioned in paragraph 7A(c), 
(d) or (e);  
[MAS 117 (Amendment) 2020, wef 16 Apr 2020]   
 
“shield plan” means an integrated shield plan or non -integrated shield plan;  
and  
 
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
 
“Trade Specific Agent” means an insurance agent for a direct general insurer 
who is —  
 
(a) not carrying on business in Singapore as his core business; and  
(b) registered with the Agents’ Registration Board purs uant to paragraph 6 
of MAS Notice 211.  
 
[MAS 117 (Amendment) 2010, wef 11 Aug 2010]  
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
 
3. The expressions used in this Notice shall, except where expressly defined in this 
Notice or where the context otherwise requires, have the same respective meanings as 
in the Act.  
 
MINIMUM EXAMINATION REQUIREMENTS  
 
Requirements to pass the health insuranc e module  
 
4. Subject to paragraphs 6, 7 and 7A, any individual —  
[MAS 117 (Amendment) 2020, wef 16 Apr 2020]  
(a) who—  
 
(i) is employed by or acts as an insurance agent for a direct insurer, 
other than a Trade Specific Agent;  
 
[MAS 117 (Amendment) 2010, wef 11 Aug 2010]  
 
(ii) is employed by or acts for a direct insurance broker or an exempt 
direct insurance broker; or  
 
(iii) is employed by or acts as an appointed representative for a licensed 
financial adviser or an exempt financial advi ser;  
 
[MAS 117 (Amendment) 2010, wef 11 Aug 2010]  
and  
 
(b) who wishes to provide advice on or arrange contracts of insurance or both, 
in respect of health insurance products,  
 
is required to pass the health insurance module conducted by the Singapore Colle ge of 
Insurance (SCI).  
 

Health Insurance   
44 Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 5. Subject to paragraph 7B, a direct insurer, a direct insurance broker, an exempt 
direct insurance broker, a licensed financial adviser or an exempt financial adviser shall 
ensure that any individual it employs or, where applicable, who acts for it, acts as its 
insurance agent or acts as its appointed representative, complies with the requirement 
in paragraph 4.


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[MAS 117 (Amendment) 2010, wef 26 Nov 2010]  
[MAS 117 (Amendment) 2020, wef 16 Apr 2020]   
  
Exclusion  
 
6. Any individual —  
 
(a) who, prior to 1 January 200 2,—  
 
(i) is employed by or acts as an insurance agent for a direct insurer; or  
 
(ii) is employed by or acts for a direct insurance broker or an exempt 
direct insurance brokers;  
 
and  
 
(b) who had been providing advice or arranging contracts of insurance or 
both, in respect of health insurance products that contain what is 
commonly known as critical illness benefit as the only accident and health 
benefits in the product,  
 
[MAS 117 (Amendmen t) 2015, wef 1 Jan 2016]  
 
is not required to comply with the requirement in paragraph 4 if he has completed a 
non-examinable  course on critical illness insurance conducted by SCI or an approved 
in-house course covering SCI’s syllabus on critical illness insurance by 1 July 2002.  
 
7. Any individual —  
 
(a) who, —  
 
(i) is employed by or acts as an insurance agent for a direct insurer;  
 
(ii) is employed by or acts for a direct insurance broker or an exempt 
direct insurance brokers;  
 
(iii) is employed by or acts as an appointed representative for a licensed 
financial adviser or an exempt financial adviser;  
 
[MAS 117 (Amendment) 2004, wef 13 Feb 200 4]  
[MAS 117 (Amendment) 2010, wef 26 Nov 2010]  
 
and  
 

2. Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 45  
(b) who provides advice on or arranges contracts of insurance or both, in 
respect of health insurance products that contain what are commonly 
known as critical illness benefit or hospital income benefit o r both, as the 
only accident and health benefits in the product,  
 
is not required to comply with the requirement in paragraph 4 if he has obtained passes 
in any of the following modules:  
 
(i) Certificate in General Insurance - Basic Insurance Concepts & 
Principles and Personal General Insurance;  
(ii) Capital Markets & Financial Advisory Services Module 9: Life 
Insurance and Investment -Linked Policies.  
 
[MAS 117 (Amendment) 2004, wef 13 Feb 2004]  
 
Relief Measures During the COVID -19 Situation  
7A An individual  
 
(a) who —  
 
(i) is employed by or is appointed to act as an insurance agent for a 
direct insurer;  
(ii) is employed by or is appointed to act for a direct insurance broker or 
an exempt direct insurance bro ker; or  
(iii) is employed by or is appointed to act as an appointed representative 
for a licensed financial adviser or an exempt financial adviser, and  
 
(b) who wishes to commence providing advice on or arranging contracts of 
insurance or both, in respect of health insuran ce products, between 16 
April 2020 and 30 September 2020 (both dates inclusive),  
 
is not required to comply with the requirement in paragraph 4, for a period of six 
months (or such longer period as may be allowed by the Authority in writing) from the 
earliest of the following dates:  
 
(a) the date the individual commences providing advice on health insurance 
products;  
(b) the date the individual commences arranging contracts of insurance in respect 
of health insurance products;  
(c) the date the individual commences providing advice on health insurance 
products and arranging contracts of insurance in respect of health insurance 
products.  
 
[MAS 117 (Amendment) 2020, wef 16 Apr 2020]  
 
7B Any –  
(a) direct insurer which employs, or appoints to act as its insurance agent, an 
individual mentioned in paragraph 7A(a)(i) who wishes to commence activities 
mentioned in paragraph 7A(b);  

Health Insurance   
46 Copyright reserved by the Singapore College of Insurance Limited [ Version 1.


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4] (b) a direct insurance broker or exempt direct insurance broker, which employs, 
or appoints to act for it, an individual mentioned in paragraph 7A(a)(ii ) who 
wishes to commence activities mentioned in paragraph 7A(b);  
 
(c) licensed financial adviser or exempt financial adviser, which employs, or 
appoints to act as its appointed representative, an individual mentioned in 
paragraph 7A(a)(iii) who wishes to com mence activities mentioned in 
paragraph 7A(b);  
 
is not required to comply with the requirement in paragraph 5 in respect of that individual 
for a period of six months from the relevant date (or such longer period as may be 
allowed by the Authority in writ ing).  
[MAS 117 (Amendment) 2020, wef 16 Apr 2020]  
 
7C A direct insurer, a direct insurance broker, an exempt direct insurance broker, a 
licensed financial adviser or an exempt financial adviser which relies on the 
exemption under paragraph 7B must for the duration where the individual relies 
on the exemption under paragraph 7A (called in this paragraph the “relevant 
individual”) – 
  
(a) put in place measures1 to properly supervise the activities and conduct of the 
relevant individual, including measures to ensure that all obligations assumed 
and liabilities incurred by the relevant individual are properly fulfilled, whether 
actual or contingent and howsoever a rising, in relation to the provision of 
advice on or arrangement of contracts of insurance or both, in respect of health 
insurance products, by the relevant individual;  
 
and 
 
(b) put in place measures, including proper training, to ensure that the relevant 
individual understands and complies with all Singapore laws that are relevant 
to the provision of advice on or arrangement of contracts of insurance or both, 
in respect of health insurance products, by the relevant individual.  
 
[MAS 117 (Amendment) 2020, we f 16 Apr 2020]  
____________________  
1 The direct insurer, direct insurance broker, exempt direct insurance broker, licensed 
financial adviser and exempt financial adviser may refer to the Frequently Asked 
Questions (FAQs) on Relief Measures Relating to COV ID-19 Situation - General Insurance 
and Health Insurance Examinations and Continuing Professional Development 
Requirements.  
 
7D Where a direct insurer, a direct insurance broker, an exempt direct insurance 
broker, a licensed financial adviser or an exempt financial adviser (called in this 
paragraph a “relevant person”) employs or, where applicable, appoints to act for 
it, or appoin ts to act as its insurance agent or appointed representative, as the 
case may be, an individual who relies on the exemption under paragraph 7A, the 
relevant person must submit to the Authority all of the following information, 
within three business days fr om the relevant date –  
 

2. Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 47  
(a) the individual’s name;  
(b) the relevant date;  
(c) the individual’s representative number, if applicable.  
[MAS 117 (Amendment) 2020, wef 16 Apr 2020]  
Additional requirements  
 
8. A direct insurer shall not accept any business in respect of any health insurance 
product from any individual whom it employs or who acts as its insurance agent and 
who has not complied with the requirement in paragraph 4 and does not fall under 
paragraphs 6, 7 or 7A of this Notice.   
 
[MAS 117 (Amendment) 2020, wef 16 Apr 2020]  
 
9. A direct insurance broker ,  an exempt direct insurance broker, a licensed financial 
adviser or an exempt financial adviser shall not pass on any business in respect of any 
health insurance product to an insurer if it is received from any individual whom it 
employs or, where applicable, who acts for it or act as its appointed representative, and 
who has not complied with the requirement in paragraph 4 and does not fall under 
paragraphs 6, 7 or 7A of this Notice.  
 
[MAS 117 (Amendment) 2010, wef 26 Nov 2010]  
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
[MAS 117 (Amendment) 2020, wef 16 Apr 2020 ]  
 
CPD REQUIREMENTS IN RESPECT OF SHIELD PLANS  
 
Minimum number of CPD training hours required  
 
9A.


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Any individual —  
 
(a) who—  
 
(i) is employed by or acts as an insurance agent for a direct insurer, other 
than a Trade Specific Agent;  
(ii) is employed by or acts for a direct insurance broker or an exempt direct 
insurance broker; or  
(iii) is employed by or acts as an appointed representative for a licensed 
financial adviser or an exempt financial adviser;  
 
and  
 
(b) who wishes to provide advice on or arrange contracts of insurance or both, 
in respect of shield plans,  
 
 
 
 
 
 
 

Health Insurance   
48 Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] is required to complete a minimum of 2 hours of structured CPD training2 on –  
 
(i) MediShield Life Scheme content;  
(ii) shield plan content; or  
(iii) a combination of MediShield Life Scheme content and shield plan 
content,  
 
before the end of each calendar year  (or within such longer period as may be allowed by 
the Authority in w riting) .  
 
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
[MAS 117 (Amendment) 2020, wef 16 Apr 2020]   
 
Exclusion  
 
9B. Any individual —  
 
(a) who—  
 
(i) is employed by or acts as an insurance agent for a direct insurer, other 
than a Trade Specific Agent;  
 
(ii) is employed by or acts for a direct insurance broker or an exempt direct 
insurance broker; or  
 
(iii) is employed by or acts as an appointed representative fo r a licensed 
financial adviser or an exempt financial adviser;  
 
and  
 
(b) who wishes to provide advice on or arrange contracts of insurance or both, 
in respect of shield plans,  
 
is not required to comply with the requirement in paragraph 9A,  
 
(i) for the calendar year that he passes the health insurance module 
conducted by SCI; or   
 
(ii) for the calendar year that he was appointed, if he was appointed 
anytime between 1 October and 31 December (both dates inclusive) of 
that calendar year.  
 
 
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
_________________  
2Structured CPD training includes lectures, conferences, workshops and courses, which 
have clear learning objectives and outcomes, and such learning objectives and outcomes 
are clearly documented and independently verified. Structured CPD training excludes 
activities that are part of the job scope of the individual referred to in paragraph 9A such 
as carrying out research on products and services for clients but will include product 
seminars prior to the launch of new products and e -learning courses.  

2. Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [ Version 1. 4] 49  
9C. A direc t insurer, a direct insurance broker, an exempt direct insurance broker, a 
licensed financial adviser or an exempt financial adviser shall ensure that any individual 
it employs or, where applicable, who acts as its insurance agent or appointed 
representati ve complies with the requirements in paragraph 9A.  
 
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
 
9D. A direct insurer, a direct insurance broker, an exempt direct insurance broker, a 
licensed financial adviser or an exempt financial adviser shall obtain, and retain for a 
period of 5 years from the date of the written records, written records and supporting 
documents that show that any individual which it employs or who acts as its insurance 
agent or appointed representative has complied with the requirements i n paragraph 9A.  
 
[MAS 117 (Amendment) 2015, wef 1 Jan 2016]  
 
Contravention of requirements imposed  
 
10. Contravention of any requirement imposed under this Notice is an offence and 
attracts the penalty specified in section 55(2) of the Act.  
 
Commencement and cancellation  
 
11. This Notice shall take effect on 26 January 2004. Notice MAS 117 on “Training and 
Com petency Requirement: Health Insurance Module” dated 31 December 2002 is 
cancelled.  
 
 
 
 
 
*Endnotes of History of Amendments  
 
1. MAS Notice 117 (Amendment) 2004 dated 13 February 2004 with effect from 13 
February 2004  
2. MAS Notice 117 (Amendment) 2010 dated 11  August 2010 with effect from 11 
August 2010  
3.


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MAS Notice 117 (Amendment) 2010 dated 11  August 2010 with effect from 11 
August 2010  
3. MAS Notice 117 (Amendment) 2010 dated 26 November 2010 with effect from 26 
November 2010  
4. MAS Notice 117 (Amendment) 2015 dated 28 December 2015 with effect from 1 
January 2016  
5. MAS Notice 117 (Amendment) 2020 dated 16 April 2020 with effect from 16 April 
2020  
 
 
 

3
MEDICAL EXPENSE INSURANCE
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Three broad categories of 
Health Insurance• A reimbursement for the cost of medical treatment or nursing care; or
• A periodic income upon disability or hospitalisation; or
• A fixed cash amount upon disability or suffering from a major illness.
Types of coverage 
provided under a Medical 
Expense Insurance policy• Inpatient expenses.
• Outpatient expenses.
• Catastrophic outpatient expenses.
Some policies also extend cover to include:
• Emergency medical evacuation.
• Private nursing home care.
Other benefits offered by 
insurers under a Medical 
Expense Insurance policy• Specific disease insurance;
• Miscarriage benefit;
• Private nursing home care;
• Daily hospital cash;
• Emergency medical evacuation benefit; and
• Final expenses benefit.CHAPTER
02
Key features of Medical Expense Insurance
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Stand-alone or a rider Medical Expense Insurance can be offered as a rider or a stand-alone policy. If 
issued as a rider, it is often attached to a permanent Life Insurance policy. Note that 
it is not common in Singapore for Medical Expense Insurance to be offered as a 
rider.
Choice of plans Insurers normally offer Medical Expense Insurance with a variety of plans, giving the 
policy owner the option to choose a plan that best meets his needs and budget.
Family coverage Unlike other types of Health Insurance, most Medical Expense Insurance policies 
allow the policy owner to include immediate family members (i.e. spouse and 
children) in the policy. Most insurers also give the policy owner the flexibility of 
selecting different plans for his family members. In addition, some insurers give a 
family discount (e.g. 5%) if the application is submitted at the same time.
Reimbursement of 
expensesBenefits under the Medical Expense Insurance are provided on a reimbursement 
basis, i.e. the insurer will reimburse the policy owner up to a maximum dollar 
amount, or limit for each medical expense item covered under the policy which the 
insured person incurs.
Expense participation 
(deductible, co-insurance 
and pro-ration factor)• A deductible is a flat dollar amount of medical expenses that the policy owner 
must pay out of his own pocket, before the insurer will begin making any 
benefit payment under the policy. It is usually on a per year basis, i.e. it is 
applicable again on the yearly renewal of the policy.
• Once the policy owner has satisfied the deductible, he is then eligible for 
reimbursement under the policy. However, if there is co-insurance, he is 
required to pay a specified percentage (e.g. 10%) of the total covered medical 
expenses which are in excess of the deductible. This helps to reduce over-
consumption.
• When the insured person is admitted to a hospital better than and/or ward 
higher than what he is entitled to under his existing insured plan, a percentage 
(expressed as pro-ration factor in the benefit schedule) is applied on the actual 
charges incurred and covered under the policy. Therefore, the benefit payable 
is reduced, to take into account the differences in the Government subsidies 
applicable to the ward type of the insured plan.

4
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Benefit limits • Lifetime limit. This amount is the maximum total amount of all reimbursements 
that the insurer is liable to the policy owner throughout the life insured’s 
lifetime.
• Annual limit. It is the maximum annual reimbursement for benefits payable by 
the insurer as stated in the Schedule of Benefits of the policy.
• Event limit. The maximum amount payable per disability or illness as defined in 
the policy
Covered charges All Medical Expense Insurance policies will specify the expenses and its limits 
that will be covered under the plan. Charges, services and expenses are three 
interrelated terms used.
Geographical limit Most Individual Medical Expense Insurance policies will automatically terminate if 
the insured resides outside of Singapore for more than a specified period of time 
(e.g. 180 days). However, some insurers will terminate the policy only if the insured 
is not a Singapore Citizen or Singapore Permanent Resident (SPR).


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180 days). However, some insurers will terminate the policy only if the insured 
is not a Singapore Citizen or Singapore Permanent Resident (SPR).
Waiting period A period of time stated in the policy which must pass, before some or all of his 
Health Insurance coverage can begin. In other words, the insurer is liable to pay 
any claim amount filed only after this waiting period. The waiting period is not 
applicable for accidental injury. This means that, in the case of injury caused by an 
accident, the insured will be covered immediately.
Age limits Most insurers issue this policy to people who are as young as 15 days old and below 
a specified maximum age of entry, e.g. 74 or 75 years old. Children are allowed 
to be insured under the parent’s policy up to the age 18 or 25 years, if he is still 
pursuing full-time tertiary education.
Premiums The premiums for Medical Expense Insurance are usually based on age band and 
increase as one ages, i.e. if a person crosses to the next age band, he has to pay 
a higher premium upon renewal, based on the new age band that he falls under. 
Premium rates are not guaranteed and may be adjusted on the premium due date 
or next renewal date to account for higher claims, medical inflation, etc.
Renewability Some Medical Expense Insurance policies are issued on a guaranteed renewable 
basis. This means that the insurer cannot terminate the policy owing to poor claims 
experience, so long as the policy owner pays his premium to keep the policy in 
force. All the IP policies are guaranteed renewable.
Common exclusions under 
Medical Expense Insurance• Pre-existing conditions that were present during a specified period (e.g. 12 
months) prior to the inception of the insurance;
• Congenital anomalies;
• Cosmetic surgery, dental treatment and vision care;
• Convalescent and special nursing care, general medical check-up;
• Pregnancy, infertility, birth control, childbirth and their related complications;
• Mental or nervous disorder, drug addiction and alcoholism;
• Acquired Immune Deficiency Syndrome (AIDS) and its related complications, 
sexually transmitted diseases;
• Flying or aerial activity, other than as a fare-paying passenger on a regularly 
scheduled flight of a commercial aircraft;
• Hazardous sports, such as mountaineering, scuba diving, ice skating, bungee 
jumping, etc.;
• Illnesses or injuries arising from war, nuclear, participation in strike, riot or civil 
commotion;
• Self-inflicted injuries and injuries resulting from a criminal or unlawful act;
• Purchase of hospital-type equipment, such as wheelchair, dialysis machine, etc.; 
and
• Treatment for obesity, weight reduction or improvement.
Exclusions vary from insurer to insurer. Clients should be advised and reminded 
to read the policy documents i.e. they need to understand the specific exclusions 
imposed by their insurers.

5
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Limitations (co-ordination 
of benefits) under Medical 
Expense Insurance• The purpose of this Clause is to ensure that the total claims made by the policy 
owner cannot exceed the total actual medical expenses incurred.
• Should the policy owner be able to obtain payments from other sources, the 
amount payable by the insurer under a Medical Expense Insurance policy will 
be reduced, so that the total benefits received will not exceed the total incurred 
medical expenses.
General guidelines on 
how group policies can be 
extended to cover
Employees’ immediate 
family membersUnlike other types of Health Insurance, most Medical Expense Insurance policies 
allow the policy owner to include immediate family members (i.e. spouse and 
children) in the policy. Most insurers also give the policy owner the flexibility of 
selecting different plans for his family members. In addition, some insurers give a 
family discount (e.g. 5%) if the application is submitted at the same time.
Underwriting 
requirements for both 
individual and group 
coversThe main source of underwriting information for individual Medical Expense 
Insurance is the proposal form. For group coverage, the employer is required to 
complete a Group Insurance Fact-Finding (GIFF) Form which is the main source 
of information for the underwriting assessment. For small groups (e.g. below 10 
members/employees), the underwriter may also require the individual employee to 
complete a health declaration form.
Subsidy distinction 
between citizens and non-
citizensOwing to the differences in healthcare subsidy for citizens, SPR and foreigners, 
some insurers apply a citizenship factor on the hospitalisation claims. Citizenship 
factor means a percentage applied to the medical expenses of an insured person 
(who is not a Singaporean), that is claimable under the policy.


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Citizenship 
factor means a percentage applied to the medical expenses of an insured person 
(who is not a Singaporean), that is claimable under the policy.
When the coverage of an 
insured person under a 
Medical Expense Insurance 
policy will terminate• Death of the insured person. 
• Date on which the insured person enters into full-time military service, except 
during National Service reservist duty or training in accordance with the 
Enlistment Act 1970.
• The end of the policy period during which the insured person attains the 
maximum age covered under the policy (e.g. 80 years old).
• Date on which the policy is terminated.
• Date of expiry of the period for which the last premium payment is made on 
account of the insured person’s insurance.
• The total amount of claims made has reached the lifetime limit.
• Date of cessation of the insured person as an employee. Applicable to group 
policies only.
Documents to be 
furnished in the event of a 
claim• Claim form to be completed by the insured;
• Physician’s statement by the attending doctor; 
• Discharge summary; and
• Original medical bills.
These are the standard documents required by the insurer to assess the claim. The 
insurer reserves the right to call for other necessary documents.


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These are the standard documents required by the insurer to assess the claim. The 
insurer reserves the right to call for other necessary documents.


Health Insurance   
50 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]       CHAPTER 3  
GROUP MEDICAL EXPENSE INSURANCE  
 
 
 
 
CHAPTER OUTLINE  
 
1. Introduction  
2. Group Insurance  
3. Individual & Group Medical Expense Insurance  
4. Portable, Transferable Medical Benefits & Shield Plans For Employees  
Appendix 3A - Transferable Medical Insurance Certification  
 
 
 
LEARNING OUTCOMES  
 
After studying this chapter, you should be able to:  
▪ know the criteria for a group to be eligible for Group Insurance cover  
▪ state the characteristics of a Group Insurance policy  
▪ understand the Medical Insurance  requirements  for foreign workers  
▪ explain the differences between a compulsory and a voluntary plan  
▪ list the advantages of a compulsory plan and a v oluntary plan  
▪ understand the difference s between Individual and Group Medical Expense 
Insurance  
▪ understand how the Portable Medical Benefit s Scheme (PMBS) works  
▪ know the advantages of the PMBS  
▪ understand how the Transferable Medical Insurance Scheme (TMIS) works  
▪ know the areas that an employer must do in order to be eligible for the TMIS  
▪ explain the two main features under the TMIS, namely:  
- continuation benefit  
- transferability benefit  
▪ list the medical expenses that qualify under the TMIS Special Benef it 
▪ state the differences between PMBS and TMIS  
▪ understand the provisions of a n Integrated S hield Plan on tax deductions  
 
 
 
 
 
 
 

3.Group Medical Expense Insurance
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  51 Contents  
CHAPTER OUTLINE  ................................ ................................ ................................ ...........  50 
LEARNING OUTCOMES  ................................ ................................ ................................ .... 50 
1. INTRODUCTION  ................................ ................................ ................................ ....... 52 
2. GROUP INSURANCE  ................................ ................................ ................................  52 
A.Medical Insurance Requirement For Foreign Workers  ................................ .... 53 
3. INDIVIDUAL & GROUP MEDICAL EXPENSE INSURANCE ................................ ..... 54 
A.Compulsory & Voluntary Plans  ................................ ................................ ........  54 
A1. Advantages Of A Compulsory (Non -Contributory) Plan  ..........................  55 
A2. Advantages Of A Voluntary (Contributory) Plan  ................................ ....... 55 
B.Individual Versus Group Insurance  ................................ ................................ .. 55 
4. PORTABLE, TRANSFERABLE MEDICAL BENEFITS & SHIELD PLANS FOR
EMPLOYEES  ................................ ................................ ................................ .............  56 
A.Portable Medical Benefits  Scheme (PMBS)  ................................ .....................  57 
B.Transferable Medical Insurance Scheme (TMIS)  ................................ .............  58 
B1. How To Qualify For The TMIS?  ................................ ................................ .. 58 
B2. How Can The Two TMIS Features Benefit The Employees?  ....................  58 
B3. What Are The Medical Expenses That Qua lify Under TMIS Special 
Benefits?  ................................ ................................ ................................ ..... 60 
B4. Who Are The Employees Eligible For TMIS Benefits?  ..............................  60 
B5. How Are The Claims Paid?  ................................ ................................ .........  60 
B6. How Do Insurers Verify The Eligibility Of An Employee Under The TMIS?
 ................................ ................................ ................................ .....................  60 
B7. Will It Cost More For A Company To Adopt The TMIS?  ...........................  61 
C.PMBS Versus TMIS  ................................ ................................ ...........................  61 
D.Provision Of Medisave -Approved Shield Plan ................................ .................  62 
E.  Ad -hoc Contributions To Employees' Medisave Accounts  .............................  62 
APPENDIX  3A ................................ ................................ ................................ ....................  63 


Health Insurance  
52 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 1. INTRODUCTION
1.1 Medical Expense Insurance  (MEI)  policies can be issued on an individual or a
group basis. Hence , it is important that you know how a group policy works and
what the differences are between an individual policy and a group polic y. This
chapter aims to give you an understanding of the se two categories of policies.
In addition, you will also learn about two me dical benefit schemes, namely the
Portable Medical Benefits Scheme and the Transferable Medical Insurance
Scheme , introduced by the Government in year 2003.
2.


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In addition, you will also learn about two me dical benefit schemes, namely the
Portable Medical Benefits Scheme and the Transferable Medical Insurance
Scheme , introduced by the Government in year 2003.
2. GROUP INSURANCE
2.1 Group I nsurance , one example being  the Employee Benefit  Insurance,  provides
coverage to many people under one  master  policy. The requirement is that
several people must first be members of a group , before they can be eligible to
purchase the insurance. The  group must have been formed for some purpose s
other than to obtain insurance, such as companies, trade unions , professional
associations  and clubs.
2.2 The characteristics of Group Insurance include:
(a) Master Contract – Group In surance is issued under a single contract called
the master contract which is kept by the master , i.e. employer, club or
association.  Unlike individual insurance, when a n insured member of the
contract dies or leaves the group, only this member’s coverage is
terminated. The plan itself w ill still carry on , because it belongs to the
holder of the master contract. For example, under a company’s  Group
Insurance policy, the employer is the policy owner, while the employee s
or any of their immediate family membe rs (spouse and children) if
included are the insured person s.
(b) Minimal Underwriting Requirements  – If the group size is large  enough,
the underwriter may either require the members to complete a health
declaration form , a simplified application form , or waive all underwriting
requirements  and rely on the pre -existing condition exclusion clauses in
their policies to avoid anti -selection risks.
(c) Experience -rating  – It is usually underwritten based on the past claims
exper iences of the group to be insured. Such a practice is called
experience -rating.
(d) Cost Effective ness  – It provides low-cost protection owing to savings in
administrative costs , since  only one Group Insurance policy is issued.
(e) Plan Continuation  – The pla n is usually renewable on a yearly basis.  As
such, at the end of each policy period, your corporate client will need to
review the plan to assess the comprehensiveness of the coverage. You
have to  advise your client on this aspect.
Portable  
Transferable  

3. Group Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   53  
(f) Eligibility Requirements  – Group Insurance policies usually define eligible 
members as those in a specified class. For example, most Group 
Insurance policies state that an employee must work full-time , in order to 
be eligible for coverage . Part-time workers will be excluded from the class 
of eligible employees.  Others include age specifications , e.g. from the age 
of 16 to 65 years and that the insured employees have to be Singaporeans, 
Singapore Permanent Residents ( SPRs), or with valid employment passes 
in order to be eligible.  
 
2.3 In addition, Group Insurance policies have an actively -at-work clause which 
requires an employee to be actively at work on the day  that the insurance 
coverage takes effect , in orde r to be eligible for the cover. If an employee is on 
sick leave or annual leave on the day that the insurance coverage takes effect, 
he will not be covered by the Group Insurance policy until he returns to work.  
 
2.4 Some employers may also include a probationary period (typically three to six 
months) requirement that a new employee must wait , before becoming eligible 
to enrol in the Group Insurance plan. Such an arrangement will avoid the 
administrative work involved with new employees resigning shortly after 
joining the company. It also helps to reduce the overall premium payable for 
the Group Insurance  policy.  
 
A. Medical Insurance Requirement For  Foreign Workers   
 
2.5 Since 1 January 2008, subsidies on hospital bills for foreigners have been 
removed. With this revision, t he Ministry of Manpower (MOM) requires every 
employer to buy, pay and maintain a minimum Medical I nsurance coverage  for 
its foreign workers and foreign domestic workers (maids) during their 
employment stay in Singapore  This insurance is compulsory to  every S Pass 
holder and Work Permit holder  before MOM issues or renews their work permit.  
 
2.6 The insurance coverage must be at lea st S$15,000 per year  and covers medical 
bill incurred for inpatient and day surgery, including hospital bills for conditions 
that may not be work related.


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2.6 The insurance coverage must be at lea st S$15,000 per year  and covers medical 
bill incurred for inpatient and day surgery, including hospital bills for conditions 
that may not be work related.  
 
2.7 A co -payment arrangement may be made with the Work Permit holder if the 
following conditions are met : 
▪ The co -pay amount is reasonable and does not exceed 10% of the 
employee’s monthly salary . 
▪ The duration co -payment does not exceed six (6) months .- The co -payment 
option is explicitly in the employment contract or collective agreement and 
has the worker’s full consent . 
 
2.8 For all Work Permit and S Pass holders  entering Singapore from 1 January 2021,  
they are required to have a COVID -19 medical insurance policy before they 
arrive in Singapore which:  
▪ covers at least $10,000 for their medical expenses i f they develop COVID -19 
symptoms or test positive within the first 14 days of arrival in Singapore; 
and 
▪ covers workers on work pass in -principle approvals (IPAs).  


Health Insurance   
54 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 3. INDIVIDUAL & GROUP MEDICAL EXPENSE INSURANCE  
 
3.1 Medical Expense Insurance can be issued on an individual or a group basis. 
Individual insurance policies are issued to individuals. In some instances, such 
a policy can be extended to include the individual’s immediate family members 
(usually spouse and ch ildren).  
 
3.2 Group Medical Expense Insurance policies are more often purchased by 
employers as part of their employee benefits to attract and retain their 
employees . Like the individual insurance policies, the coverage of Group 
Medical I nsurance policies can also be extended to cover the employees ’ 
immediate famil y members (spouses and children) . An example  on how the 
cover may be arranged for an employee and his immediate family members 
under a Group Medical Insurance policy is shown in Table 3.1. 
 
Table 3.1: Example On How The Cover May Be Arranged For An Employee 
And His Immediate Family Members Under A Group Medical Insurance Policy  
 
Insured  Person  Commencement Date Of Cover  
New employees and 
dependants  Date of employment or date of 
confirmation  upon probation . 
New dependants  (provided 
that employee s are already 
insured)  Spouse  – at any time within a specified 
period of time  (usually 30 days) after 
marriage.  
 
Child  – at any time between 15 and 30 
days after birth.  
Employer effects a new Group Medical I nsurance policy  
Compulsory Plan – Employee and dependants  will be covered from the date 
of commencement of the policy , as long as the employee is actively at work 
or on normal paid leave.  
 
Voluntary Plan – Employee  and dependants  can join the scheme at any time 
within a specified period of time (usually 30 days) from the commencement 
date of the policy  or the enrolment period.  
 
Note : Most insurers will grant the cover only to the employee’s dependants  
who are residing in Singapore.  
 
A. Compulsory & Voluntary Plans  
 
3.3 Group Insurance policies can be issued on a compulsory or voluntary basis. For 
a compulsory (also known as non -contributory) plan, all the eligible employees 
must be covered under the plan, and the premium s have to be paid solely by 
the employer. A voluntary (also known as contributory) plan, on the other hand, 
does not require full participation from the employees who may be expected to 
pay part of the premium s. However, the insurer will normally require a 
minimum number of employees or percentage (e.g. 75%) of participation in the 
plan.  The advantages of both types of plans are  described below : 

3. Group Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   55  
A1. Advantages Of A Compulsory (Non -Contributory) Plan 
 
(a) It provides ease of administration , since there is no regular payroll 
deduction to monitor.  
(b) It comes  with l ower costs owing to less administrative work involved , and 
the greater pooling effect of risks  as a result of many lives insured .  
(c) It helps the employer  to retain greater control of the benefit structures and 
provisions.  
 
A2. Advantages Of A Voluntary (Contributory) Plan 
 
(a) Employer  
▪ Participating employees assume part of the cost s of the benefit s as 
provided under the Group Insurance plan.


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A2. Advantages Of A Voluntary (Contributory) Plan 
 
(a) Employer  
▪ Participating employees assume part of the cost s of the benefit s as 
provided under the Group Insurance plan. 
▪ It generates interest and appreciation from the participating employees  
of the Group Insurance  plan.  
 
(b) Employee s 
▪ It gives the participating employees some control over the Group 
Insurance plan. 
▪ They can o btain cover age at a lower premium rate than buying it 
individually.  
 
B. Individual Versus Group Insurance  
 
3.4 There are some  differences between I ndividual and Group I nsurance. Table 3. 2 
shows the differences between them.  
 
Table 3. 2: Differences Between Individual & Group Insurance  
 
 Individual Insurance  Group Insurance  
Eligibility  Only the individual who 
applies for the coverage 
is covered.  
 
An individual need s 
only to be insurable , in 
order to be granted  the 
coverage.  Only members who belong to the 
group and are actively at work are 
covered.  
 
Members under a group must 
satisfy the eligibility requirements 
as stated in the Group Insurance 
policy , before they are granted the 
coverage.  
Contract  Each individual policy 
owner gets a policy 
contract.  Only one master contract is issued 
to the employer or an affiliated 
organisation. The number of 
insured  members  is more than 
one. 
Choice of 
Plan An individual policy 
owner has the right to 
select the amount of 
coverage that he wants.  Insured members may or may not 
have the right to decide on the  
amount of coverage that they 
want. In the employer -paid 
plans/compulsory plans, the 

Health Insurance   
56 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  Individual Insurance  Group Insurance  
amount of coverage is determined 
by the employer.  
Underwriting  Individual’s health 
history, lifestyle and 
financial status are 
evaluated.  Group as a whole is  evaluated 
depending on the gender and age 
distribution of the group, 
occupation mix and past claims 
experience . 
Termination 
of Cover  
 Coverage continues 
until the individual or 
insurer chooses to 
terminate it.  
 The individual life insured’s 
coverage stops when he leaves 
the group. However, the insurance 
plan continues for the remaining 
members.  
Premium  Cost of coverage is 
higher because of 
individual underwriting 
and higher 
administrative costs.  
 
Premium is age -related.  Cost of coverage is lower because 
of group underwriting and lower 
administrative costs.  
 
Premium is unit -related.  
 
3.5 The above information is a general description of how a Group Insurance policy 
works. It applies not only to Medical Expense Insurance policies , but also to all 
other types of Health Insurance policies , which you will learn about in the 
chapters that follow.  
 
 
4. PORTABLE , TRANSFERABLE MEDICAL BENEFITS  & SHIELD PLANS  FOR 
EMPLOYEES  
 
4.1 With shorter employment tenure and frequent job changes in the tight labour 
market, employees will need continuous inpatient medical provision , when they 
change jobs or during the period of unemployment. With each change, the 
employee may lose his medical benefits provided by the respective employer.  
 
4.2 This will result in the employee being left with no cover while waiting to join 
his new employer, or he may become uninsurable and unable to be covered 
under his new employer’s Group  Medical Expense Insurance policy.  To 
incentivise employers to make the move towards enhancing the portability of 
inpatient  or hospitalisation medical benefits for their employees, the Singapore 
Government , since 1 April 2004,  has revised the tax policy to allow employers 
implementing any of the following portable medical bene fits options to enjoy 
higher tax deduction for medical expenses of up to 2% of the total employees’ 
remuneration:  
▪ Portable Medical Benefits Scheme (PMBS) ; 
▪ Transferable Medical Insurance Scheme (TMIS) ;  
▪ Provision of a Shield Plan ; or 
▪ Ad-hoc Contributions to Employees' Medisave Accounts.  

3. Group Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   57  
4.3 Let us now look at the two schemes in greater detail.  
 
A. Portable Medical Benefits Scheme (PMBS)  
 
4.4 This scheme  rides on the Medisave/MediShield Life framework.


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A. Portable Medical Benefits Scheme (PMBS)  
 
4.4 This scheme  rides on the Medisave/MediShield Life framework. Under this 
scheme, the employer s, instead of providing their employees with Group 
Medical Insurance coverage, make additional monthly contribution s to the 
employees' respective Medisave accounts . Employees can then use the 
Medisave contributions to purchase MediShield Life or any one of the private 
insurers’ Integrated Shield Plans , to cover the ir inpatient or hospitalisation 
needs.  
  
4.5 Any surplus Medisave contribution will accumulate in the employee’s Medisave 
Account and generate interest. Do v isit the Central Provident Fund ( CPF) Board  
website at www.cpf.gov.sg  to find out the latest Medisave interest rate. The 
savings in the employee’s Medisave Account can be used to meet his future 
medical needs, as well as the medical needs of his dependants . 
 
4.6 The advantage of this scheme is that the employee can continue to be medically 
insured , even though he may be unemployed or is in -between jobs.  This is 
because the coverage will continue as long as  the premium is paid, regardless 
of his employment status . It also reduces duplication of insurance plans and 
premium payments . 
 
4.7 The employer will enjoy a 2% tax deduction. To be eligible for the tax deduction, 
the employer must satisfy the following condi tions:  
▪ The scheme must cover at least 20% of the local employees1 recruited as at 
the first day of financial year being assessed , and all local employees  who 
commence their employment during that financial year ; 
▪ For full -time employees, the additional monthly contributions to Medisave 
accounts should be at least 1% of each employee’s gross monthly salary, 
subject to a minimum amount of S$16 per calendar month ; and  
▪ For part -time employees2, the additional monthly Medisave contributions 
should be compute d based on 1% of their actual gross salary  for the calendar 
month . 
 
4.8 An employer who wish es to make additional Medisave contribution for his 
employee s may register with the Employer  Registration Section  of the CPF 
Board  with a new CPF Submission Number .  
 
4.9 However, for employers who choose not to implement either the PMBS or 
TMIS, their tax deductibility in respect of medical expenses will be maintained 
at the present 1% of the total employees’  remuneration .  
 
 
1   Local employees refer to Singapore citizens or Singapore Permanent Residents employed on a full -time 
or part -time contract of employment, regardless of the number of hours worked.  
2  Part-time employees refer to employees who are required under their contr act of service with their 
employers to work regularly for less than 30 hours a week.   


Health Insurance   
58 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] B. Transferable Medical Insurance Scheme (TMIS)      
 
4.10 The TMIS is a private hospitalisation insurance arrangement among 
participating insurers . It is  to provide continuous Medical Expense Insurance 
coverage to an employee , starting from the date of leaving the  service of his 
employer  for whatever reasons up to  a period of 12 months , as long as the 
insurance premium is paid.  
 
4.11 A TMIS policy is an enhancement of the existing employer -sponsored Group 
Medical Expense Insurance  outside of the CPF Medisave framework . It is 
basically an employer -sponsored Group Medical Insurance programme with 
the following two additional features:  
▪ continuation of coverage; and  
▪ transferability  of benefits . 
 
4.12 Let us look at how the TMIS works.  
 
B1. How To Qualify For The TMIS?  
 
4.13 To qualify  for the TMIS, the employer must:  
▪ have a group size of 11 or more employees ; 
▪ take up a Group Medical Expense Insurance plan;  
▪ insure at least 50% (computed using X/Y x 100%, where X  = all local 
employees who are on the PMBS or TMIS , and Y  = total number of local 
employees in the  employing  company) of its local employees , subject to a 
minimum total of 11 employees. The benefits can be provided for pre -
defined categories of employees, e.g.


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The benefits can be provided for pre -
defined categories of employees, e.g. rank -and-file employees or 
executives;  
▪ pay 100% of the premium for the Group Medical Expense Insurance 
coverage ( Note : Employers are allowed to recover the premiums for 
continuation benefits after the termination of employment, whol ly or partly 
from the employees, based on agreement with the employees); and  
▪ not give their employees the option as to whether they wish to be insured 
under the Group Medical Expen se Insurance plan.  
 
B2. How  Can The Two TMIS Features Benefit The Employees?  
 
4.14 Continuation  Of Coverage Benefits  
 
This feature enables an employee whose employment is terminated either by 
his employer, or on his own accord, to continue enjoying hospitalisation 
coverage from the employment termination date up to a period of 12 months 
(not exceeding the prescribed statutory age).  
 
  
Employees are 
not given option 
as to whether 
they wish to be 
insured under the 
Group MEI Plan . 

3. Group Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   59  
4.15 Transferability  Of Benefits  
 
This feature enables an employee who resigns from one employing company 
which holds a TMIS policy, and joins another which also holds a TMIS policy , 
to enjoy the following benefits:  
(a) automatic coverage under the new employer’s Group Medical Expense 
Insurance plan , without  the need to provide  evidence of good health;  and 
(b) waiver of any exclusion on pre -existing medical conditions if the 
employee has been  continuously insured under one or more TMIS plans 
for 12 months before joining his new employer. If he has not been insured 
continuously for at least 12 months under the TMIS plans before joining 
his new employer, he will be entitled to the waiver when he  completes the 
12 months of continuous coverage under the new employer’s TMIS plan.  
 
4.16 However , if the employee is hospitalised  for treatment of a condition which is 
pre-existing when he joins the new employer, he will enjoy a lower benefit 
within the first 12 months of cover under the new employer’s plan. The cover is 
the lower entitlement of either the:  
▪ new employer’s TMIS plan; or    
▪ prior employer’s TMIS plan.  
 
4.17 Example 3.1  illustrates  how an employee’s medical fees are covered should he 
contract an illness while working for his previous employer.  
 
Example 3.1  
 
Danny  changed his job in year 2019. Below are the details:  
 
Date of termination with Employer A – 1 January 2019 
Date of employment with Employer B – 15 January 2019 
 
Benefit Entitlement             Employer A          Employer B        
Daily Room & Board           S$250 per day    S$350 per day   
Total of eligible benefits      S$5,000             S$8,000  
 
Danny  was hospitalised on 1 April 2019 due to an illness while he contracted 
while in Employer A’s employment. He received  a total benefit  of S$5,000  as 
he has not been continuously insured by Employer B for 12 months  as at 1 
April 2019  
 
Should Danny be once again hospitalised on 1 March 2020 , the total benefit 
that he would receive  would be  S$8,000.  
 
4.18 Note that the transferability of benefit s will not be available , if the employee 
moves from an employer with a non -TMIS group Medical Expense Insurance 
plan to an employer with a TMIS plan, and vice versa.  
 

Health Insurance  
60 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] B3. What Are The Medical Expenses That Qualify U nder TMIS Special Benefits?  
4.19 The following  are the medical expenses that qualify under the TMIS benefits:  
▪daily room and board charges;
▪intensive care unit charges;
▪charges for miscellaneous hospital services;
▪charges for in -hospital doctor’s visits; and
▪charges for inpatient and outpatient benefits .
4.20 All pre/post hospitalisation outpatient, emergency outpatient accident and 
outpatient kidney dialysis/cancer treatment expenses are not eligible for TMIS 
benefits , even if they can  be reimbursed u nder the TMIS plan.  
B4. Who Are The Employees Eligible For TMIS Benefits?


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B4. Who Are The Employees Eligible For TMIS Benefits?  
4.21 To be eligible  for the TMIS benefits, an employee must be:  
▪below the prescribed statutory retirement age;
▪a Singapore  Citizen  or SPR based in Singapore;
▪working full -time with the same employer; and
▪working on a permanent employment contract , or on a temporary
employment contract with a term of 24 months or more.
4.22 At the time of writing, the current statutory minimum retirement age is 63 years 
old in Singapore.  This means that employers are not allowed to dismiss any 
employee below age 63 because of the employee’s age. The retirement age will 
be raised gradually to 65 by 2030.  Currently, employers must offer re -
employment to eligible employees who turn 63, up to the re -employment age 
of 68. This provides older workers with more opportunities to work longer, if 
they wish to do so. It is not compulsory for workers to continue working until 
the re -employment age.  On the contrary, it is their choice whether th ey wish to 
do so. The re -employment age will be raised gradually to 70 by 2030  
B5. How Are The Claims Paid?  
4.23 Claims for continuation of benefits will be payable from the 
previous employer’s TMIS plan.  
4.24 Claims for transferability of benefits on or after the employee has joined the 
new employer will be payable from the new employer’s TMIS plan.  
B6. How Do Insurers Verify The  Eligibility Of An Employee Under The TMIS?  
4.25 An employer has to issue a Transferable Medical Insurance Certificat ion (TMIC) 
(see Appendix 3A) at the request of an employee upon the termination of his 
employment. The TMIC must be submitted to the insurer when the employee 
submits a claim for Continuation Benefit , or to the new employer’s insurer 
should a claim arising from a pre -existing condition be made within 12 months 

3. Group Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   61  
of joining the new employer.  
 
B7. Will It Cost More For A Company To Adopt Th e TMIS?  
 
4.26 The insurer will charge an additional premium if a policy is issued under the 
TMIS. However, this will be partially offset by the additional tax deduction (1%) 
which the employer is entitled to.  
 
C. PMBS Versus TMIS  
 
4.27 The differences  between PMBS and TMIS are  described below : 
 
PMBS  TMIS  
The e mployer makes an additional 
contribution to the Employ ee’s 
Medisave Account for him to  purchase  
the policy on his own.  
 The e mployer purchases the policy.  
Can purchase only a Medical 
Insurance policy approved under the 
Medisave Scheme  (e.g. an Integrated 
Shield Plan from an approved private 
insurer) . 
 Can purchase any Group Medical 
Expense Insurance policy offered in 
the market other than those 
approved under the Medisave 
Scheme.  
 
The c overage is lifetime  for most 
Integrated Shield Plans  in the 
insurance market.  
 The c overage expires at the 
prescribed statutory retirement 
age.  
The coverage continues even when 
the employee is between jobs or out 
of a job , as long as the premium is 
paid.  
 The coverage continues up to a 
maximum period of 12 months 
from the date of termination from a 
job.  
 
There are deductibles and co -
insurance features.  Riders c an be 
purchased  to offset the deductibles 
and co -insurance.  
 It is unlikely  to have deductibles 
and co -insurance features , as 
Group Medical Expense Insurance 
policies rarely have these features.  
 
Treatment for pre -existing illnesses is 
typically excluded.  
 Waiver on pre -existing conditions 
is allowed, when employees 
change jobs and where both 
employers provide TMIS benefits.  
 
The e mployer has no control over the 
policy which the employee has 
purchased.  The e mployer continues to have full 
control over the Group Medical 
Expense Insurance policy , and the 
level of benefits can be structured 
according to the corporate 
employee benefit philosophy.  

Health Insurance   
62 Copyright reserved by the Singapore College of Insurance Limited [Version 1.


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Health Insurance   
62 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] D. Provision Of Medisave -Approved Shield Plan   
 
4.28 This is a variation of the PMBS , where the employer may choose to pay for a  
Medi Shield Life or Integrated Shield Plan ( IP) for the  employees. An employer 
providing employees with an IP can claim tax deduction for medical expenses 
incurred, up to 2% of the total employees’ remuneration, upon meet ing the 
following qualifying conditions:  
▪ provide an IP  for at least 20% of the local employees as at the first day of the 
financial year being assessed , and all local employees who commence their 
employment during that financial year; and  
▪ pay IP premium s on behalf of the employees directly to the approved insurer , 
or reimburse the premium s into the respective employees’ Medisave 
Accounts.  
 
4.29 However, the additional tax deduction  as mentioned above excludes premiums 
for the “Riders on IPs” that cover deductibles and co -insurance payments. This 
is because the Singapore Government does not want to incentivise employers 
to take up such riders that can potentially result in an over -consumption of 
healthcare services.  
 
E.     Ad-hoc Contributions To Employees' Medisave Accounts    
 
4.30 An employer can make ad -hoc Medisave contributions to the employees' 
Medisave Accounts, even if it is not adopting any of the portable medical 
benefits options  as described earlier . 
 
4.31 To encourage such contri butions, the employer can get an additional tax 
deduction beyond the 1% limit for the amount o f ad-hoc Medisave contributions 
made . Additional contributions are subject to a limit of  $2,730  per employee per 
year.  The overall tax deduction for medical expenses will be subject to the 
overall cap of 2%.  
  
4.32 If the employer wishes to make additional Medisave contributions for the 
employees, the employer will need to register with the Employer and Accounts 
Management Section of the CPF board for a new CPF Submission Number. 
Such contributions are tax -free, and are subject to a cap per employee per year. 
Refer to the MOM website under schemes for employers and employees for the 
cap amount: http://www.mom.gov.sg   
 
 
 


3. Group Medical Expense Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   63  
APPENDIX  3A 
 
TRANSFERABLE MEDICAL INSURANCE CERTIFICATION  
(Important Note: Applicable for TMIS eligible employee only)  
 
Policy Particulars  
 
Name of policy owner            ___________________________________________  
Name of Insurer                     ___________________________________________  
Policy Number                       ___________________________________________  
 
Life Insured’s (or Insured Member’s) Particulars  
 
__________________________________________   
__________________________________________  
__________________________________________    
__________________________________________  
__________________________________________     
Period of Employer’s Coverage   
 
Period of Continuation Coverage  
 
Commencement Date _____________   
Commencement Date ____________  
Termination Date       _____________  Termination Date       ____________  
 
Policy Benefits  Maximum Limit  
 
Room & Board (xx days)  S$ _____________________  
Intensive Care Unit (xx days)  S$ _____________________  
Hospital Services  S$ _____________________  
Surgical Benefit  S$ _____________________  
In-hospital Doctor’s Visit Per Day  S$ _____________________  
 
Certification  
 
 I/We certify that the information furnished here is true, correct and complete:  
 
 
_____________________________  
Signature of Authorised Officer   
 
                             ____________________  
                             Company Stamp  
  Name:  
  Designation:  
  Date Issued:  
 
 
Source: LIA Website – “Transferable Medical Insurance Certificate” (1 January 2004)  
 
 
 Name of Life Insured  
NRIC/Passport No.  
Date of Birth  
Date of Employment  
Date of Termination  

6
GROUP MEDICAL EXPENSE INSURANCE
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Criteria for a group to 
be eligible for Group 
Insurance coverThe requirement is that several people must first be members of a group, before 
they can be eligible to purchase the insurance. The group must have been formed 
for some purposes other than to obtain insurance, such as companies, trade 
unions, professional associations and clubs.
Characteristics of a Group 
Insurance policy• Master Contract. 
• Minimal Underwriting Requirements.
• Experience-rating.
• Cost Effectiveness.
• Plan Continuation.
• Eligibility Requirements.
In addition, Group Insurance policies have an actively-at-work clause.


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• Minimal Underwriting Requirements.
• Experience-rating.
• Cost Effectiveness.
• Plan Continuation.
• Eligibility Requirements.
In addition, Group Insurance policies have an actively-at-work clause.
Characteristics of Medical 
Insurance for foreign 
workersInsurance coverage must be at least S$15,000 per year and covers medical bill 
incurred for inpatient and day surgery, including hospital bills for conditions that 
may not be work related.
Differences between 
a compulsory and a 
voluntary plan• For a compulsory (also known as non-contributory) plan, all the eligible 
employees must be covered under the plan, and the premiums have to be paid 
solely by the employer.
• A voluntary (also known as contributory) plan, on the other hand, does not 
require full participation from the employees who may be expected to pay part 
of the premiums.
Advantages Of A 
Compulsory (Non-
Contributory) Plan• It provides ease of administration, since there is no regular payroll deduction to 
monitor.
• It comes with lower costs owing to less administrative work involved, and the 
greater pooling effect of risks as a result of many lives insured. 
• It helps the employer to retain greater control of the benefit structures and 
provisions.
Advantages Of A Voluntary 
(Contributory) Plan• Employer
 »Participating employees assume part of the costs of the benefits as 
provided under the Group Insurance plan.
 »It generates interest and appreciation from the participating employees of 
the Group Insurance plan.
• Employees
 »It gives the participating employees some control over the Group Insurance 
plan.
 »They can obtain coverage at a lower premium rate than buying it 
individually.CHAPTER
03

7
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Differences between 
Individual and Group 
Medical Expense Insurance• Individual insurance policies are issued to individuals.
• Group Medical Expense Insurance policies are more often purchased by 
employers as part of their employee benefits to attract and retain their 
employees.
• Can be extended to include the individual’s immediate family members (usually 
spouse and children).
Individual Insurance Group Insurance
Eligibility Only the individual who 
applies for the coverage 
is covered.
An individual needs 
only to be insurable, in 
order to be granted the 
coverage. Only members who 
belong to the group and 
are actively at work are 
covered.
Members under a group 
must satisfy the eligibility 
requirements as stated 
in the Group Insurance 
policy, before they are 
granted the coverage. 
Contract Each individual policy 
owner gets a policy 
contract.Only one master 
contract is issued to 
the employer or an 
affiliated organisation. 
The number of insured 
members is more than 
one.
Choice of Plan An individual policy 
owner has the right to 
select the amount of 
coverage that he wants.Insured members may or 
may not have the right to 
decide on the amount of 
coverage that they want. 
In the employer-paid 
plans/compulsory plans, 
the amount of coverage 
is determined by the 
employer.
Underwriting Individual’s health 
history, lifestyle and 
financial status are 
evaluated.Group as a whole is 
evaluated depending 
on the gender and age 
distribution of the group, 
occupation mix and past 
claims experience.
Termination of Cover Coverage continues until 
the individual or insurer 
chooses to terminate it.The individual life 
insured’s coverage stops 
when he leaves the 
group. However, the 
insurance plan continues 
for the remaining 
members.
Premium Cost of coverage 
is higher because 
of individual 
underwriting and higher 
administrative costs.
Premium is age-related.Cost of coverage is 
lower because of group 
underwriting and lower 
administrative costs.
Premium is unit-related.

8
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
How the Portable Medical 
Benefits Scheme (PMBS) worksThis scheme rides on the Medisave/MediShield Life framework. Under this scheme, the employers, instead of providing their employees with Group Medical Insurance coverage, make additional monthly contributions to the employees' respective Medisave accounts. Employees can then use the Medisave contributions to purchase MediShield Life or any one of the private insurers’ Integrated Shield Plans, to cover their inpatient or hospitalisation needs.
Advantages of the PMBS •
Any surplus Medisave contribution will accumulate in the employee’s MedisaveAccount and generate interest.
•
Employee can continue to be medically insured, even though he may beunemployed or is in-between jobs. This is because the coverage will continueas long as the premium is paid, regardless of his employment status. It alsoreduces duplication of insurance plans and premium payments.
•
The employer will enjoy a 2% tax deduction, subject to conditions.


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It alsoreduces duplication of insurance plans and premium payments.
•
The employer will enjoy a 2% tax deduction, subject to conditions.
How the Transferable Medical Insurance Scheme (TMIS) worksThe TMIS is a private hospitalisation insurance arrangement among participating insurers. It is to provide continuous Medical Expense Insurance coverage to an employee, starting from the date of leaving the service of his employer for whatever reasons up to a period of 12 months, as long as the insurance premium is paid. A TMIS policy is an enhancement of the existing employer-sponsored Group Medical Expense Insurance outside of the CPF Medisave framework.
Areas that an employer must do in order to be eligible for the TMISTo qualify for the TMIS, the employer must:•
have a group size of 11 or more employees;
•take up a Group Medical Expense Insurance plan;
•insure at least 50% (computed using X/Y x 100%, where X = all local employeeswho are on the PMBS or TMIS, and Y = total number of local employees inthe employing company) of its local employees, subject to a minimum totalof 11 employees. The benefits can be provided for pre-defined categories ofemployees, e.g. rank-and-file employees or executives;
•
pay 100% of the premium for the Group Medical Expense Insurance coverage(Note: Employers are allowed to recover the premiums for continuation benefitsafter the termination of employment, wholly or partly from the employees,based on agreement with the employees); and
•
not give their employees the option as to whether they wish to be insuredunder the Group Medical Expense Insurance plan.
Two main features under the TMIS, namely:•
continuation benefit
•transferability benefitContinuation Of Coverage Benefits•
This feature enables an employee whose employment is terminated eitherby his employer, or on his own accord, to continue enjoying hospitalisationcoverage from the employment termination date up to a period of 12 months(not exceeding the prescribed statutory age).
Transferability Of Benefits
•automatic coverage under the new employer’s Group Medical Expense  
Insurance plan, without the need to provide evidence of good health; and
•waiver of any exclusion on pre-existing medical conditions if the employee  has 
been continuously insured under one or more TMIS plans for 12 months  before 
joining his new employer. If he has not been insured continuously for  at least 
12 months under the TMIS plans before joining his new employer, he  will be 
entitled to the waiver when he completes the 12 months of continuous  
coverage under the new employer’s TMIS plan.
Medical expenses that qualify under the TMIS Special Benefit•
Daily room and board charges;
•Intensive care unit charges;
•Charges for miscellaneous hospital services;
•Charges for in-hospital doctor’s visits; and
•Charges for inpatient and outpatient benefits.
All pre/post hospitalisation outpatient, emergency outpatient accident and outpatient kidney dialysis/cancer treatment expenses are not eligible for TMIS benefits, even if they can be reimbursed under the TMIS plan.This feature enables an employee who resigns from one employing company which 
holds a TMIS policy, and joins another which also holds a TMIS policy, to enjoy the 
following benefits:

9
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Differences between PMBS 
and TMIS
Provisions of an Integrated 
Shield Plan on tax 
deductionsAn employer providing employees with an IP can claim tax deduction for medical 
expenses incurred, up to 2% of the total employees’ remuneration, upon meeting 
the following qualifying conditions:
• provide an IP for at least 20% of the local employees as at the first day of the 
financial year being assessed, and all local employees who commence their 
employment during that financial year; and 
• pay IP premiums on behalf of the employees directly to the approved insurer, 
or reimburse the premiums into the respective employees’ Medisave Accounts.PMBS TMIS
The employer makes an additional 
contribution to the Employee’s 
Medisave Account for him to purchase 
the policy on his own.The employer purchases the policy.
Can purchase only a Medical Insurance 
policy approved under the Medisave 
Scheme (e.g. an Integrated Shield Plan 
from an approved private insurer).Can purchase any Group Medical 
Expense Insurance policy offered in 
the market other than those approved 
under the Medisave Scheme.
The coverage is lifetime for most 
Integrated Shield Plans in the 
insurance market.The coverage expires at the prescribed 
statutory retirement age.
The coverage continues even when the 
employee is between jobs or out of a 
job, as long as the premium is paid. The coverage continues up to a 
maximum period of 12 months from 
the date of termination from a job. 
There are deductibles and co-
insurance features.


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The coverage continues up to a 
maximum period of 12 months from 
the date of termination from a job. 
There are deductibles and co-
insurance features. Riders can be 
purchased to offset the deductibles 
and co-insurance.It is unlikely to have deductibles and 
co-insurance features, as Group 
Medical Expense Insurance policies 
rarely have these features.
Treatment for pre-existing illnesses is 
typically excluded.Waiver on pre-existing conditions is 
allowed, when employees change jobs 
and where both employers provide 
TMIS benefits.
The employer has no control over 
the policy which the employee has 
purchased.The employer continues to have 
full control over the Group Medical 
Expense Insurance policy, and the level 
of benefits can be structured according 
to the corporate employee benefit 
philosophy.


Health Insurance  
64 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]  CHAPTER 4  
DISABILITY INCOME INSURANCE  
CHAPTER OUTLINE  
1. Introduction
2. What Is Disability Income Insurance?
3. Disability Income Insurance & Total And Permanent Disability
4. Computation Of Disability Income Insurance Benefit
5. Definitions
6. Benefits Offered Under Disability Income Insurance
7. Features Of A Disability Income Insurance Policy
8. Underwriting
9. Cessation Of Benefits
10. Exclusions
11. Termination Of Cover
12. Group Disability Income Insurance
13. General Underwriting Principles For Group D isability Income Insurance
14. Disability Income Claims
15. Conclusion
Appendix 4A - Clinical Abstract Form
LEARNING OUTCOMES  
After studying this chapter, you should be able to:  
▪describe what Disability Income Insurance is
▪differentiate between Disability Income Insurance and Total and
Permanent Disability Benefit
▪understand how Disability Income Insurance works
▪briefly describe:
-total disability
-partial disability
-recurrent disability (linked claims)
-benefit period
-deferred /elimination  period
▪know the difference between “own occupation” , “modified own occupation” , “any
occupation” and “severe disability“  definitions
▪list the eligibility criteria for payment of Disability Income Insurance benefit
▪describe the types of benefits offered by Disability Income Insurance:
-total disability benefit
-partial disability benefit

4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   65  
- rehabilitation expense benefit  
- escalation benefit  
- waiver of premium benefit  
- death benefit  
▪ know how to compute the partial disability benefit  
▪ know how the escalation benefit wo rks 
▪ explain how the limitation of disability benefit clause works  
▪ list the features of Disability Income Insurance  
▪ list the documents required for the underwriting of Disability Income Insurance for 
an individual employee , as well as for the self -employed  person  
▪ briefly describe the following underwriting consideration s for Disability Income 
Insurance:  
- occupation  
- benefit amount  
- benefit period  
- deferred /elimination  period  
▪ know when the benefits under a Disability Income Insur ance policy cease to be 
payable  
▪ list the exclusions commonly found under Disability Income Insurance  
▪ list the events that will cause a Disability Income Insurance policy to be terminated  
▪ understand the coverage and features of Group Disability Income Insur ance  
▪ know the general underwriting principles and claims procedures for both Individual 
and Group Disability Income Insurance  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Health Insurance   
66 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] Contents  
CHAPTER OUTLINE  ................................ ................................ ................................ ...........  64 
LEARNING OUTCOMES  ................................ ................................ ................................ .... 64 
1. INTRODUCTION  ................................ ................................ ................................ ....... 68 
2. WHAT IS DISABILITY INCOME INSURANCE?  ................................ ........................  68 
3. DISABILITY INCOME INSURANCE & TOTAL AND PERMANENT DISABILITY  ..... 68 
4. COMPUTATION OF DISABILITY INCOME INSURANCE BENEFIT  .........................  69 
5. DEFINITIONS  ................................ ................................ ................................ ............  71 
A. Total Disability  ................................ ................................ ................................ ... 71 
A1. Own Occupation  ................................ ................................ .........................  71 
A2. Modified Own Occupation  ................................ ................................ .........  71 
A3. Any Occupation  ................................ ................................ ..........................  72 
A4. Severe Disability  ................................ ................................ .........................  72 
B. Partial Disability ................................ ................................ ................................ .


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Any Occupation  ................................ ................................ ..........................  72 
A4. Severe Disability  ................................ ................................ .........................  72 
B. Partial Disability ................................ ................................ ................................ . 72 
C. Recurrent Disability (Linked Claims)  ................................ ................................  73 
D. Benefit Period  ................................ ................................ ................................ .... 73 
E. Deferred/Elimination Period  ................................ ................................ .............  73 
6. BENEFITS OFFERED UNDER DISABILITY INCOME INSURANCE  ..........................  74 
A. Eligibility Criteria For Payment Of Disability Income Insurance Benefit  ........  74 
B. Types Of Benefits Off ered  ................................ ................................ .................  74 
B1. Total Disability Benefit  ................................ ................................ ...............  74 
B2. Partial Disability Benefit  ................................ ................................ .............  75 
B3. Rehabilitation Expense Benefit  ................................ ................................ .. 76 
B4. Escalation Benefit  ................................ ................................ .......................  76 
B5. Waiver Of Premium Benefit  ................................ ................................ ....... 78 
B6. Death Benefit  ................................ ................................ ..............................  78 
C. Limitation Of Disability Benefit Clause  ................................ ............................  78 
7. FEATURES OF A DISABILITY INCOME INSURANCE POLICY  ................................  78 
8. UNDERWRITING  ................................ ................................ ................................ ...... 79 
A. Underwriting Requirements  ................................ ................................ .............  79 
A1. Individual (Salaried Employee)  ................................ ................................ .. 80 
A2. Self-employed Person  ................................ ................................ ................  80 
B. Underwriting Considerations  ................................ ................................ ...........  80 
B1. Occupation  ................................ ................................ ................................ .. 80 
B2. Benefit Amount ................................ ................................ ...........................  82 
B3. Benefit Period  ................................ ................................ .............................  82 
B4. Deferred/Elimination Period ................................ ................................ ....... 82 


4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   67  
9. CESSATION OF BENEFITS  ................................ ................................ ......................  82 
10. EXCLUSIONS  ................................ ................................ ................................ ...........  82 
11. TERMINATION OF COVER  ................................ ................................ .......................  83 
12. GROUP DISABILITY INCOME INSURANCE  ................................ ............................  83 
A. Coverage Provided By Group Disability Income Insurance  ............................  83 
13. GENERAL UNDERWRITING PRINCIPLES FOR GROUP DISABILITY INCOME 
INSURANCE  ................................ ................................ ................................ .............  84 
14. DISABILITY INCOME CLAI MS ................................ ................................ .................  84 
A. Claims Procedure For Disability Income Policy  ................................ ...............  84 
B. Foreign Residency During Claims Period  ................................ ........................  85 
15. CONCLUSION  ................................ ................................ ................................ ...........  86 
APPENDIX  4A ................................ ................................ ................................ ....................  87


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Health Insurance   
68 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 1. INTRODUCTION  
 
1.1 While it is appropriate for an individual to plan for his retirement and premature 
death, it is also critical for an individual to protect his earning capacity, whether 
he is an employee or a self-employed  individual . This is because he could lose 
his earning po wer should he become disabled as a result of  an accident or 
illness . If that happens, he may be incapable of paying  his living and medical 
expenses, including  the premiums to keep his insurance policies in force.  On 
top of this, his family’s current expens es need to be paid , and these expenses 
may even increase as a result of his medical treatments or the need to employ 
a personal nurse to take care of him. In addition, he may still have outstanding 
loans to repay. Thus, many families would be financially w orse off with the 
incapacity of the bread -winner s, than they would  be had the bread -winner s 
passed on .  
 
1.2 Hence, a Disability Income Insurance policy is a useful insurance product to help 
to safeguard a person’s earning capacity in any of the above -mentione d 
situation s. In this chapter, we will look at both Individual and Group Disability 
Income Insurance, including their underwriting and claim procedures.  
 
 
2. WHAT IS DISABILITY INCOME INSURANCE?  
 
2.1 Disability Income Insurance is sold as an income -protection product in that it 
helps to replace a portion of the insured’s income that he loses if he becomes 
incapacitated and unable to work as a result of an accident or  illness , subject to 
certain conditi ons, as we will see later. It is also known as Permanent Health 
Insurance  because the insurer cannot  cancel the policy, no matter how many 
times the insured make s a claim. The policy will continue to pay out until he 
return s to work, die s, or the policy en ds, whichever happens first.  Alternative 
names for this type of insurance include  “Income Protection” Insurance or 
“Income Replacement” Insurance. For the purpose of this Study Guide , we will 
use the term “Disability Income” Insurance.  
 
 
3. DISABILITY INCOME INSURANCE & TOTAL AND PERMANENT DISABILITY  
 
3.1 Many people confuse Disability Income Insurance with the Total and Permanent 
Disability (TPD) Benefit offered under Life Insurance policies. While both 
provide the insured with a cash benefit i n the event of his disability arising from 
an accident or  illness , there are distinct differences between the two benefits . 
 
3.2 The main difference between Disability Income Insurance and Total and 
Permanent Disability Benefit lies in the purpose of the insur ance  and the 
definition of “disability ”. Disability Income Insurance provides an income 
replacement if the insured is unable to work , whereas Total and Permanent 
Disability Benefit serves to accelerate the death benefit payable under a Life 
Insurance policy , to alleviate the financial burden or hardship of the insured and 
his dependants. The benefit under the Total and Permanent Disabil ity Benefit is 
payable in instalments , or one lump sum, depending on the terms and 
conditions as specified in the Life I nsurance policy.  On the other hand, Disability


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4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   69  
Income Insurance benefits are payable on a monthly basis  for up to  a fixed 
number of years  (such as five or ten years) , or until the insured  reaches a certain 
age (such as the age of 60 or 65 years ). The other differences are shown  in Table 
4.1. 
 
Table 4.1: Other Differences Between Disability Income Insurance & Total And 
Permanent Disability Benefit  
 
Disability Income Insurance  Total And Permanent Disability Benefit  
Disability definition relates to the 
extent the insured can fulfil the 
duties of his occupation.  Disability is defined to be total and 
permanent , such as loss of limbs or loss 
of eyesight.  
 
It can be purchased as a stand -
alone policy or as a rider.  It is u sually incorporated into the Life 
Insurance policies in Singapore.  
Maximum sum assured is up to a 
specified percentage of the salary.  Sum assured is not pegged to salary.  
Escalation benefit is available.  There is no  escalation benefit.  
Partial disability benefit is 
available.  Partial disability benefit is not available.  
Choice of deferred /elimination  
period is available (e.g. one 
month, three months, six months, 
etc.).  No deferred period as specified (but 
usually there is a 6-month waiting 
period requirement as proof of 
permanent disability).  
 
It is usually  only available to 
working adults  with earn ed 
income/salary.  There is u sually no restriction on non -
working people, e.g. children and 
housewives, as it is bundled with  the 
death benefit under a Life Insurance 
policy.  
 
 
 
4. COMPUTATION OF DISABILITY INCOME INSURANCE BENEFIT     
 
4.1 Disability Income Insurance policy pay s a monthly income to the insured upon 
his disability. Let us look at how it actually works , using the case of an employed 
individual. See Example 4.1 . 
 
Example 4.1: Example Of Computation Of Disability Income Insurance 
Benefit  
 
Andrew , aged 30  years , is an assistant accountant in a finance company . His 
monthly income is S$5,000. He wish es to purchase a Disability Income 
Insurance policy to provide maximum coverage . 
 
However, the maximum amount of monthly benefit that he can purchase is 
unlikely to be 100% . Why?  


Health Insurance   
70 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] Insurers will allow the benefit amount to cover only up to 75% of the insured’s 
average income over the past 12 months immediately prior to his disability. 
Most insurers also impose a ceiling on the income to be covered (e.g. 
S$15,000). Some insurers grant a lower percentage for the self -employed, e.g. 
60% of the past 12 months’ income. The purpose of replacing only a certain 
percentage of the insured’s income is to ensure that the insured will not be 
better off financially from the benefit which he receives  under his Disability 
Income Insurance policy, so that he will have the incentive to go back to work.  
 
Details of his policy  are as follows : 
 
Male, Age Next Birthday  30 years old  
Monthly Income  S$5,000  
Monthly Benefit  S$3,750 (75% of his monthly income 
being the maximum amount  as 
allowed by Alpha Insurance 
Company and assuming  that he has 
no other disability benefits).  
Escalation Benefit  5% per year  
Benefit Period  Up to  the age of 65 years  next 
birthday  
Deferred /Elimination  Period  6 months  
Annual Premium  S$599.10  
 
 
 
4.2 If Andrew  becomes disabled ( must meet the definition of “disability” as 
specified in the policy) and is out of work four and a half years after the policy 
commences, he will receive the benefit amount every month from the insurer 
after the Deferred /Elimination  Period , as long as he is unable to work. Should  
he be disabled  throughout the Benefit Period  (30 years) , he would  receive a total 
of S$2,989, 746 (S$3,750 x 12 x 66.4 388), although he would have paid only five 
years of premiums amounting to S$2,995.50 ( S$599.10 x 5). Premiums are 
waived upon disability.


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Premiums are 
waived upon disability.  
 
4.3 Now that you have seen how a Disability Income Insurance policy works, we 
will look at the definitions of the various terms used in Example 4.1 , including 
the term “disability”.  
 
 
 
 
 
 
 
 
 
 
  66.4388 is the future value annuity interest factor derived from the formula [(1+i)n-1]/i (where i = 
escalation benefit,  n = number of years). Alternatively, you may refer to Table A1  on Future Value Of 
Annuity  Factors at the back of this Study Guide.  

4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   71  
5. DEFINITIONS  
 
A. Total Disability  
 
5.1 Since the major purpose of a Disability Income Insurance policy is to provide 
income when an insured is totally disabled and unable to work, the meaning of 
Total Disability is important. As such, the term “Total Disability” is clearly 
defined in the policy and may take one of the following forms:  
▪ own occupation disability;  
▪ modified own occupation disab ility;  
▪ any occupation disability  and 
▪ severe disability  
 
5.2 Let us look at each of the definitions in turn.  
 
A1. Own Occupation  
 
5.3 This definition  considers the  occupation the insured is engaged  in. Here, t otal 
disability is defined as:  
“the insured’s inability to perform the material duties of his own 
occupation”  
 
5.4 This refers to the insured’s own occupation at the time that the disability begins. 
For example, Penny , a pianist, met with an accident which resulted in two 
fingers on her left hand and one finger on her right hand being severed. As a 
result, she was  unable to work as a pianist anymore. Thus, she had met the 
above definition of “disability ” and would  be able to claim under her Disability 
Income Insurance policy . 
 
5.5 The policy will state the insured’s occupation , and the insurer has to be notified 
of any occupation change while the policy is in force. Some insurers do not 
specify the occupation in the policy.  However, their definition states that the 
insured must be unable to follow the occupation engaged in immediately prior 
to the disability , or work at any other occupation.  
 
A2. Modified Own Occupation  
 
5.6 Here “Total Disability ” means : 
“the insured’s inability to perform any gainful occupation or a similar 
occupation for which the insured is reasonably suited by reason of 
education, training or experience”  
 
5.7 This definition is more stringent than  ”Own Occupation”  in that the definition 
is extended to include “a similar occupation”. Thus, if an insured whose service 
has been terminated by his former employer because of his disability , but 
manages to find a job which is similar in nature to the previous occupation a fter 
his recovery, he will not be able to meet the definition of “Total Disability ”.  
 
 

Health Insurance   
72 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] A3. Any Occupation  
 
5.8 This is a more  restrictive definition of Total Disability. It means : 
“the insured’s inability to perform any occupation”  
 
5.9 Again, consider Penny , the pianist, whose fingers were severed. Under the 
previous definition, she was totally disabled because she was unable to perform 
the duties of her own occupation. However , suppose that she is able to teach, 
i.e. prepare students for the piano theory examination. Under “Any 
Occupation” definition, she will no longer be considered as being totally 
disabled.  
 
5.10 Note that the above examples show  just how the term “ Total Disability” may 
be defined. The wording used may vary from insurer  to insurer , and there are 
many hybrids in the insurance market , which may not be easy to classify. 
Therefore, it  is important that you find out the exact definition as used by your 
insurer  and be able to explain it clearly to your prospective clients.  
 
A4. Severe Disability  
 
5.11 This definition follows the Long-Term Care Insurance definition where the 
insured is unable to perform at least three  of the six Activities of Daily Living  
(ADLs)  – washing, dressing, feeding, toileting, mobility, and transferring.


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5.12 The insurer uses this definition when the insured’s disability occurred during a 
non-working period (a period of time in -between jobs , where the insured is still 
covered under the plan). When a disability occurs during the non -working 
period , the benefit amount will not be based on the last drawn salary , but will  
usually be pre-determined  (e.g. S$500 a month)  and stated in the policy by the 
insurer.  
 
B. Partial Disability  
 
5.13 This is when the insured recover s from a total disability to perform some major 
duties of his occupation , but at a salary which is at least 25% lower than the pre-
disability salary.  For example, Walter was paid S$2,500 a month as a warehouse 
worker. His work involved moving materials both  with a mechanical forklift and 
by hand.  
 
5.14 After an accident, Walter’s spine was injured resulting in him having weak 
hands. Since then, he could  operate only the forklift, but was not able to move 
the materials using his hands. As such, he was given a low er pay of S$1,800 
(S$1,800  S$2,500 x 100 =  72% i.e. 28% less than his original pay). In th at 
instance, Walter was considered to be partially disabled.  
 
 
 
 
 
 

4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   73  
 
 
 
 
 
 
 
5.15 Some insurers allow Partial Disability benefit to  the insured who work s in other 
occupation  (not related to his own occupation)  on a part -time or full -time basis , 
and which pays him a salary of 75% (or less) of his Pre -disability Earnings.  
 
C. Recurrent Disability (Linked Claims)  
 
5.16 If the insured who has been receiving the disability benefits returns to work , but 
suffers a relapse within a specified period of time (usually 180 days) from the 
same cause, most insurers will waive the deferred /elimination  period , and the 
benefit payments will re -commence immediately.  
 
5.17 In such a case, the claim will be treated as a continuation of the earlier claim for 
the purpose of determining the duration of the benefit payment period.  
 
D. Benefit Period  
 
5.18 Benefit period is the max imum period for which disability benefits are payable 
to the insured for any one episode of disability. It can be short  term (e.g. five 
years) or long  term  (e.g. up to age  of 60 years ). Obviously, the shorter the 
benefit term, the lower will be the premium s. 
 
 
 
 
 
 
 
 
 
E. Deferred/Elimination Period   
 
5.19 A Disability Income Insurance policy will start paying its benefits after the 
insured has been disabled for a specified period known as the deferred , 
eliminatio n or pre -benefit  period. The condition for a deferred period eliminates 
costly claims for disabilities which are only short term. Insurers may offer to the 
insured different deferred /elimination  periods  (e.g. 45, 90 or 180 days ), or by 
number of months  (e.g. three months ). 
 
5.20 Insurers offer these various deferred /elimination  periods to meet the different 
individual’s specific needs. For example, a self -employed person may need a 
short deferred period , as his income may be immediately  affected by his 
inability to work. An employed person, on the other hand, will usually contin ue 
to receive his salary for some specified period  (e.g. three or six months) . As 
such, you should advise your prospective client to find out from his employing =  Longer Benefit   
     Period              Premium  
 
 
 
 
 
 
 =  Shorter Benefit  
      Period  Premium  
 
 
 
 Income  
 Before    
Disability  
Income  
= S$2,500  After disability, income 
was reduced to S$1,800 
(being 72% of  
pre-disability income).  

Health Insurance   
74 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] company or his employment contract to see how long his company will 
continue to pay him his sal ary in the event that he is disabled , so that he can 
select the right deferred period. This will help him to save on the premium , as 
the longer the deferred period, the cheaper will be the premium , since the 
duration and frequency of claims are thereby reduced.


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This will help him to save on the premium , as 
the longer the deferred period, the cheaper will be the premium , since the 
duration and frequency of claims are thereby reduced.  
 
5.21 You can also advise prospective clients with financial constraints to purchase a 
policy with a longer deferred period , where the premium is affordable to them , 
instead of not having the cover at all.  
 
 
 
 
 
 
 
 
 
6. BENEFITS OFFERED UNDER DISABILITY INCOME INSURANCE  
 
A. Eligibility Criteria For Payment Of Disability Income Insurance Benefit  
 
6.1 To be eligible for the disability income benefit payment, the insured MUST:  
(a) keep  the policy in force;  
(b) be working (employed)  or in -between jobs  when being disabled;  
(c) still be disabled after the deferred /elimination  period;  
(d) meet the definition of total or partial disability as stated in the policy;  
(e) not have reached the expiry age  as stated in the policy;  
(f) not have resided outside Singapore for more than a certain period of time  
(usually not more than six months ); and 
(g) not have other sources of income (e.g. payment from Work  Injury  
Compensation Insurance), which when totalled up, is more than the 
benefits due to him under his Disability Income Insurance policy.  
 
B. Types Of Benefits Offered  
 
B1. Total Disability Benefit  
 
6.2 The main benefit offered  by Disability Income Insurance is obviously the 
monthly cash benefit payable to the insured to replace his lost income  (e.g. up 
to 75%) , when he becomes totally disabled  through an accident or  illness .  
 
6.3 The benefit will be paid , regardless of whether or not the insured is hospitalised. 
However, his disability has to  be certified by a registered medical practitioner1 
 
1  A registered medical practitioner is a doctor who is qualified by degree in western medicine and is 
legally licensed to pr actice medicine and surgery in the geographical area of his country, but does not 
refer to a medical practitioner who is the insured himself, as well as his spouse, child or parent of the 
insured.  =  Short Deferred  
     Period  Premium  
 
 
 
 
 
 
 =  Long Deferred  
      Period  Premium  
 
 
 
 Income  
Insurers 
usually 
insure up 
to 75% of 
income  

4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   75  
in order for him to make a claim under his policy.  
 
6.4 If the insured’s total disability continues after the expiry of the deferred period, 
the insurer will pay the monthly benefit at the end of each month . For example,  
if the policy is issued for a monthly benefit of S$1,000 ( as stated in the policy 
schedule), this will be the amount that the insured will get for that month. If the 
period of disability is less than one month, the insurer will usually pay a  pro-
rata amount based on a daily rate of one -thirtieth (1 /30) of the disability benefit.  
 
6.5 The benefit ceases when the insured recovers and returns to work, either full-
time  or part-time , and even to a different occupation . 
 
B2. Partial Disability Benefit  
 
6.6 Partial Disability Benefit is also known as “Rehabilitation Benefit”. It provides a 
reduced benefit to the insured if he is able to return to work at a reduced income 
of 75% of his Pre-disability Earnings, or lower, even though he has not been 
fully recovered. The reduced benefit is computed based on the following 
formula:  
 
 
Pre-disability Earnings − Present Earnings    
           X    Tota l Disability Benefit  
   Pre-disability Earnings  
 
  

Health Insurance   
76 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 6.7 Example 4.2  shows how the partial disability benefit is arrived at.  
 
Example 4.2: Computation Of Partial Disability Benefit  
 
Larry , a lecturer who earn s S$8,000 a month suffered brain injury in a car 
accident. This caused him to be totally disabled for two years during which he 
received S$6,000 (75% of his Pre-disability Earning s) a month from his 
Disability Income Insurance policy. In the third year, he man aged to find a job 
in a printing firm that paid him S$1,000 a month.


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In the third year, he man aged to find a job 
in a printing firm that paid him S$1,000 a month. In view of this, the insurer 
reduced the monthly benefit to S$5,250, calculated as follows:  
 
   S$(8,000 – 1,000)  
                                    X    S$6,000    =  S$5,250 
          S$8,000                                    
 
Note: You can see that the total monthly benefit and reduced income after the 
partial disability is S$6,2 50 (S$5,2 50 + S$1,000). This is still lower than the 
original income of S$8,000 a month before th e disability.  
 
6.8 The insurer will pay a pro -rata amount , based on a daily rate of one -thirtieth 
(1/30) of the partial disability benefit if the period of the partial disability is less 
than a month.  
 
B3. Rehabilitation Expense Benefit  
 
6.9 Insurers  encourage the disabled insured to participate in rehabilitation 
programmes. They will reimburse an insured for the rehabilitation costs 
incurred. The benefit is  limited to a per disability basis and may include items , 
such as:  
▪ training courses;  
▪ medical aids (e.g. wheelchair , walking frame, crutches ); and  
▪ workplace modifi cations.  
 
6.10 The insured must first get the insurer’s approval in writing , before going ahead 
with any rehabilitation programmes, etc. The rehabilitation benefit may be 
payable in addition to the monthly disability benefit  (e.g. up to three times the 
monthly benefit ). 
 
B4. Escalation Benefit  
 
6.11 Escalation benefit is a benefit offered by insurers as a hedge against inflation. 
With  an additional premium, the insured can opt for a 3% or 5% escalation 
benefit per annum.    
 
6.12 This benefit is useful for long -term disabilities. Example 4.3  illustrates how the 
escalation benefit works.  
 
 
 

4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   77  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Example 4.3: Illustration Of The Working Of The Escalation Benefit  
 
Eddy, an engineer, became disabled on 30 June 2018. He was insured for 
S$6,000 (75% of his monthly salary of S$8,000) and had opted for a 3% per 
annum escalation benefit and a 6 -month deferred period.  
 
The events following his disablement were as follows:  
 
Date  Event  
1-1-2019  Insurer made the first monthly payment of S$6,000  
1-2-2019  Insurer made the second monthly payment of S$6,000  
 
 
 
 
 
 
 
 
 
 
1-1-2020  Insurer paid S$6,180 [(S$6,000 + S$6,000 x 3% (escalation 
benefit)]  
1-2-2020  Eddy had since found a job as a clerk which paid him S$2,000 
a month. The insurer paid him a partial disability benefit of 
S$4,635 derived as follows:  
 
 Pre-Disability Earnings – Present Earnings  X Disability  
Benefit   Pre-Disability Earnings  
   
= S$(8,000 – 2,000)  X   S$6,180  S$8,000  
= S$4,635   
 
 
 
Eddy will continue to receive the Disability Income benefit until he dies or 
when the benefit period expires, depending on which is earlier.  
Eddy continued  
 
to be disabled  
Insurer continued to  
 
pay S$6,000 each 
month  

Health Insurance   
78 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] B5. Waiver Of Premium Benefit  
 
6.13 The premiums due under the Disability Income Insurance policy will be waived 
during the disability benefit payout period (applies to both total and partial 
disability).  If the insured has paid the premium annually in advance, the waiver 
of the premium will  effect from the next premium due date, even though the 
disability benefit payment has started. In other words, the premiums paid will 
not be refunded.  
 
B6.


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In other words, the premiums paid will 
not be refunded.  
 
B6. Death Benefit   
 
6.14 Most insurers provide a lump sum amount to be paid to the insured’s 
dependants , in the event of the insured’s death . 
 
C. Limitation Of Disability Benefit Clause  
 
6.15 To ensure the insured will not be better off financially by claiming, insurers have  
a limitation clause in their policies. The purpose is to  prevent over -insuring by  
restrict ing the monthly benefit payable , so that the total benefit (including other 
Disability Income policies that the insured may have) shall not exceed the 
insured’s pre -disability earnings or some proportion of it.   
 
6.16 In the event  of a claim, the disability benefit payable will be reduced by the 
following sources of income:  
▪ payments from other insurance  policies  against disability (except the Total 
and Permanent Disabilit y Benefit under Life Insurance policies) , including 
Work Injury Compensation Insurance ; and  
▪ any continuing salary, commission or other incomes derived from the 
insured’s occupation or business in which he was engaged immediately prior 
to his disability.  
 
6.17 In other words, the amount of disability income benefit paid together with any 
of the above sources of income will at no time be more than the amount of 
monthly benefit insured under the policy.  That is why it is important for the 
insured to select the rig ht deferred /elimination  period , especially if his employer 
will continue to pay him his salary even after he is disabled. If his employer 
pays him six month s’ salary in the event  that he is disabled , and the 
deferred /elimination  period chosen by him is three months, the insurer will not 
pay him any benefits after his  deferred /elimination  period has expired , as long 
as the employer continues to pay him his full salary.   
 
 
7. FEATURES OF A DISABILITY INCOME INSURANCE POLICY  
 
7.1 The features of a typical Disability Income Insurance policy are  described below : 
(a) It can be issued as a stand -alone (for which then, no rider  is possible) 
policy, or as a rider to a basic Life Insurance plan . 
(b) It provides a regular monthly income during the insured’s total and partial 
disablement . 


4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   79  
(c) The premiums are waived during the benefit period . 
(d) The benefits may be level , or may increase at a given rate . 
(e) There is a choice of deferred /elimination  period . 
(f) There is a choice of benefit period . 
(g) There is a choice of escalation benefit (if available) . 
(h) The level premium can be paid on a monthly, quarterly, half -yearly or 
annual basis , depending on the insurer ’s practice . 
(i) There is payment of partial disability benefits if a person returns to work 
earning a lower income . 
(j) There is provision of rehabilitation expense benefit . 
(k) There is provision of death benefit . 
(l) There is no restriction on the use of the cash benefits paid . 
(m) Disability benefit may discontinue if the insured stays outside Singapore 
for a sp ecified period . 
(n) The cover will be terminated if the insured resides outside Singapore for 
more than a  continuous  specified number of  days , within any one policy 
year, unless the insurer grants the insured the continuity of cover  (an 
additional premium may be charged) . 
(o) The cover will be terminated if the insured is not engaged in any full-time 
occupation or profession for a continuous period of a specified number of 
days, when he is not suffering from a disability (see Section 11  of this 
chapter for the other causes for the termination of a policy) . 
(p) The policy is usually guaranteed renewable and non -cancellable (the 
insurer has the right to adjust the premium rates if th e insured changes 
his occupation to one which is of a higher risk) by the insurer . 
(q) There is no surrender value, i.e. the insured cannot return the policy to the 
insurer for cancellation in exchange for cash payment . 
(r) No assignment is allowed . 
(s) The policy can not be written as a third -party policy . 
(t) The benefits received are non -taxable . 
(u) The policy will lapse if the premium is not paid within the 30 days ’ grace 
period.  
 
 
8. UNDERWRITING  
 
A. Underwriting Requirements  
 
8.1 The underwriting process for Disability Income Insurance is very similar to Life 
Insurance.


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8. UNDERWRITING  
 
A. Underwriting Requirements  
 
8.1 The underwriting process for Disability Income Insurance is very similar to Life 
Insurance. The different underwriting tools for individual employees and the 
self-employed persons are described below : 
 
 

Health Insurance   
80 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] A1. Individual  (Salaried Employee)  
 
8.2 Proposal  form  (also called Application form)  plus:  
▪ computerised  payslip;  or 
▪ certified letter from company  (with company letterhead) or 
▪ Notice of Assessment ; or 
▪ Central Provident Fund ( CPF) Statement ( six months) and large amount 
questionnaire if the annual benefit is more than a certain amount, e.g. 
S$60,000;  and 
▪ medical test  report  (e.g. medical examination  report , etc.) based on the age 
and amount of disability benefit proposed.  
 
A2. Self-employed  Person  
 
8.3 Proposal  form  plus: 
▪ Notice of Assessment for the last three years; or  
▪ audited company’s accounts for the last three years; and  large amount 
questionnaire if the annual benefit is more than a certain amount  (e.g. 
S$60,000 ); and 
▪ medical test  report  (e.g. medical examination  report , etc.) based on the age 
and amount of disability benefit proposed.  
 
8.4 The underwriter  will process the proposal form in the same way  as explained 
in later chapter of this Study Guide, except that he will be looking at the risk of 
the proposer (intending insured) being disabled through an accident  or illness , 
rather than the risk of death.  
 
B. Underwriting Considerations  
 
8.5 The underwriting considerations for Disability Income Insurance are similar to  
the other classes of Health Insurance . Underwriters  will pay more attention to 
the following factors:  
▪ occupation;  
▪ benefit amount;  
▪ benefit period;  and 
▪ deferred /elimination  period.  
 
B1. Occupation  
 
8.6 Occupation  is a crucial underwriting consideration for two reasons. Firstly, 
some occupations have a higher risk of disability from accidents (e.g. lorry 
driver), or  illnesses , than others. Secondly, it is easier to return to work with 
some degree of incapacity in s ome occupations than in others. For example, 
not only is a manual worker more likely to be disabled than an accountant, but  
also is easier for an accountant to work with, say, a broken arm than  that for a 
manual worker. Thus, most insurers have a rating structure depending on the 
class of occupation. A typical rating structure is as shown in Table 4.1 .  
   
Proposal  
Form   

4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   81  
 
Table 4. 2: Rating Structure Based On The Class Of Occupation  
Class I  Professions and occupations involving indoor work mainly of 
a sedentary (deskbound) nature, e.g. accountants , doctors , 
and lawyers.  
Class II  Office -based occupations with significant travelling to sites or 
production lines, shop -based jobs involving minimal manual 
work and senior supervisory positions for light manufacturing 
companies, e.g. insurance representatives , tour guides, and 
journalist s. 
Class III  Occupations involving light skilled manual work, medical 
related occupations, shop -based occupations involving light 
manual work, e.g. baker s, deliverymen, and hawkers.  
Class IV  Occupations involving semi -skilled or unskilled manual work 
of a medium to he avy nature, e.g. bus driver s, commercial 
airline crew, and armed security guards.  
Decline 
(uninsurable)  Occupations involving very heavy manual work, highly 
specialised skills, dangerous conditions or highly variable 
income, e.g. construction workers , oil riggers, professional 
divers , timber loggers , musicians , and authors.  
 
8.7 Rate tables are usually based on Class I with extra premium for the other 
classes. Many insurers will not grant coverage to those in hazardous jobs, such 
as motorcycle delivery drivers. Housewives are  usually not insurable as they 
have no regular income, a lthough some insurers may offer a limited benefit.


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Many insurers will not grant coverage to those in hazardous jobs, such 
as motorcycle delivery drivers. Housewives are  usually not insurable as they 
have no regular income, a lthough some insurers may offer a limited benefit.  
 
8.8 Hence , it is a key requirement that the insured should inform the insurer in 
writing of any change in his occupation, especially if the new occupation is 
more hazardous, or he has taken on a part -time job  which expose s him to 
accidental or health hazards (e.g. exposure to radiation). In fact, insurers will 
require the insured to inform them within a specified number of days (e.g. 21 
or 30 days) of the change of occupation. The insurer reserves the right to 
impose a loading, reduce the benefit , or to exclude  any claim arising as a result 
of his new occupation , especially if it is more hazardous  than the previous one . 
Failure to inform the insurer of the change in occupation entitles the insurer to 
repudiate any claim made under the policy , or to adjust the benefit payable.  
 
 
  
 
 
 
 
 

Health Insurance   
82 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] B2. Benefit Amount  
 
8.9 The underwriter will assess to ensure the benefits proposed are reasonable for 
the type of occupation , nature of work involved,  and stated earnings.  
 
B3. Benefit Period  
 
8.10 The benefit  period is the duration that the insurer needs to pay out the benefit. 
Underwriters may use this to determine the terms of acceptance.  
 
B4. Deferred /Elimination  Period  
 
8.11 The deferred /elimination  period chosen helps the underwriter to determine 
whether ther e is any moral hazard involved. For example, if an employee opts for 
a short deferred /elimination  period, the underwriter, before making a decision on 
the terms of acceptance, may wish to find out the period for which the employer 
will continue to pay the employee in the event of a disability.  
 
 
9. CESSATION OF BENEFITS  
 
9.1 The benefits under a Disability Income Insurance policy will cease upon the 
occurrence of any one of the following events:  
▪ when the insured is fit to return to work;  
▪ when death occurs; or  
▪ when the benefit period has expired.  
 
9.2 If the Disability Income Insurance cover is issued as a rider, the cover will 
cease upon the expiry of the basic plan , or when one of the above -mentioned 
events occurs.  
 
 
10. EXCLUSIONS  
 
10.1 Most Disability Income Insurance policies do not pay the disability benefit or 
waive the premiums if the disability is directly or indirectly due to:  
(a) self-inflicted injury , while sane or insane;  
(b) indulgence in alcohol or drug taking , unless taken under the direction s of 
a registered medical practitioner;  
(c) invasion, strike, riot, civil commotion, war (declared or undeclared) or act 
of war  or warlike operation;  
(d) illness or injury sustained while the ins ured is in the service of the armed 
forces of any country , except for reservist in -camp training during 
peacetime operation  in accordance with the Enlistment Act 1970 ; 
(e) pregnancy or childbirth or any complication arising there from , except in 
the case of pregnancy , where the disability continues for more than 90 
days after the termination of pregnancy, the disability will be deemed to 
have commenced 90 days after the term ination of the pregnancy;  
 
 
 
 
 B E N E F I T  
P E R I O D  
 
 

4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   83  
(f) participation in any aerial activity , including parachuting and sky -diving or 
travel in any type of aircraft , other than as a fare paying passenger on a 
regularly scheduled flight of a commercial airline;  
(g) sexually transmitted dise ase, or any disability, illness or injury or any 
condition or complication arising from or caused by (whether directly or 
indirectly) the human immunodeficiency virus  (HIV),  including  Acquired 
Immune Deficiency Syndrome ( AIDS) and AID S-related conditions;  
(h) participation in any professional sports or hazardous sports , including 
racing of any kind on horse or wheel s, mountaineering, rock climbing and 
scuba diving;  
(i) any pre -existing condition (i.e. c ondition occurring before the payment of 
the initial payment).  
 
The above list of exclusions may differ from insurer to insurer.  
 
 
11.


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c ondition occurring before the payment of 
the initial payment).  
 
The above list of exclusions may differ from insurer to insurer.  
 
 
11. TERMINATION OF COVER  
 
11.1 The Disability Income Insurance  policy will terminate upon the happening of 
one of the following events:  
(a) the policy has reached its expiry date;  
(b) the premiums due are not paid within the grace period;  
(c) the insured dies;  
(d) the insured reaches the expiry age  as stated in the policy schedule;  
(e) the insured resides outside  Singapore for an aggregate period of more 
than a specified number of days (e.g. 300 days) within one policy year , 
without seeking the insurer’s prior written approval for continuation of 
cover; or  
(f) the insured is not employed in a full -time occupation or profession for a 
continuous period of a specified number of days (except if he is disabled).  
 
 
12. GROUP DISABILITY INCOME INSURANCE  
 
12.1 Group Disability Income Insurance  is usually purchased by the employer as an 
employee benefit for its employees.  It can  be issued on a s tand -alone basis or 
as a rider.  
 
12.2 Insurers will only issue a Group Disability Income policy if the employer  has a 
Group Term Life Insurance policy with them, or they may also issue it as a rider 
to a Group Term Life Insurance policy.  
 
A. Coverage Provided By Group Disability Income Insurance  
 
12.3 The cover provided by a Group Disability Income Insurance policy works in the 
same way as an individual Disability Income Insurance policy . The benefits and 
exclusions are also the same . Hence, we will not repeat them here.  
 
 


Health Insurance   
84 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 13. GENERAL UNDERWRITING PRINCIPLES FOR GROUP DISABILITY INCOME 
INSURANCE  
 
13.1 The selection process in Group Disability Insurance policies is similar to that for 
the individual disability plans. As the group must have a Group Term Life 
Insurance policy before they are eligible for this disability policy, most of the 
underwriting cri teria will have already been met. The additional factors that the 
underwriters will need to take into consideration are:  
(a) nature of the company’s business;  
(b) age of the individual employee;  
(c) exact nature of work of each employee;  
(d) salary of each employee;  
(e) benefit period applied for;  
(f) benefit amount applied for;  and 
(g) claims experience of the group under the previous Group Disability Income 
Insurance policy.  
 
13.2 The above information will enable the underwriter to determine the 
occupational class  that each employee falls under , and whether the benefit 
amount applied for is justifiable. The past claims experience will enable the 
underwriter to determine the overall terms of acceptance.  
 
13.3 Note that some insurers may issue this policy  only for white -collar occupations.  
 
 
14. DISABILITY INCOME CLAIMS  
 
A. Claims Procedure For Disability Income Policy  
 
14.1 Claims procedures for individual or group disability income are similar.  In the 
event of a claim, the insured must  notify the insurer within a specified period of 
time (e.g. 60 days) from the date of commencement of the disability. Failure to 
comply with this requirement might cause the claim to be invalidat ed, unless 
the insured could prove that it was not possible for him to notify the insurer 
within the specified period, and that he had tried his best to do so.  
 
14.2 The documents  that the insurer normally asks for are as follows:  
(a) claim form giving the persona l particulars of the insured , as well as details 
of his occupation and disability;  
(b) claimant’s statement;  
(c) Clinical Abstract form (see Appendix 4A ); 
(d) physician’s statement /doctor’s statement to be completed by the 
insured’s attending physician giving full det ails of his disability;  
(e) NRIC or birth certificate  for verification of the insured’s age;  
(f) evidence of earnings, which can be  in the form of income tax returns (IR8A 
form), copies of payslips for the 12 months prior to the commencement of 
 
CLAIM 
F

4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1.


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Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   85  
disability, and letter from employer to certify that the claimant (insured) is 
not being paid during the period of disability;  
(g) letter from company certifying that the insured’s service has been 
terminated (if available);  
(h) copies of Medical Certificates;  
(i) all available Laboratory and Tests results ; 
(j) a copy of the Polic e Report if the cause of the disability is due to an 
accident ; and 
(k) a copy of the Incident Report (required to be submitted to the  Ministry of 
Manpower  if the incident occurs at the workplace) . 
 
14.3 The insurer may request for any other relevant supporting documents or 
information not listed above , on a case -by-case basis.  
 
14.4 Some insurers may set a deadline for the submission of the evidence of 
disability  or may require the insured to bear the cost of the evidence (e.g. 
medical reports) used to support his claim.  
 
14.5 For long -term disabilities, the insurer may request , at specified times, evidence 
to prove that the insured is still disa bled.  
 
B. Foreign Residency During Claims Period  
 
14.6 If the insured resides outside Singapore while the policy benefits are payable, 
the insurer may impose some or all of the conditions  as specified below : 
(a) The i nsurer must be notified of the change of residence within 30 days of 
the change . 
(b) The insurer has approved the new country of residence . 
(c) The insurer has determined that the evidence , which can be submitted to 
make or support a claim under the policy from th e new country of 
residence, is of similar  (or better) standard , in terms of quality and 
reliability, as compared to that which would be available if the insured 
were to remain in Singapore . 
(d) The insurer has determined that the expertise and facilities for t he care, 
treatment and rehabilitation of the insured in the new country of residence 
are of a similar (or better) standard , as compared to those which would be 
available in Singapore . 
(e) The insurer reserves the right to require an independent examination of 
the insured by its preferred doctor as and when reasonable.  
 
14.7 If any of these conditions are not satisfied, the insurer reserves the right to 
suspend the benefits payable under the policy until such time that the insured 
returns to Singapore , and that the insurer receives satisfactory evidence to 
resume payment of benefits.  
 
 

Health Insurance   
86 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 15. CONCLUSION  
 
15.1 As you can see, a Disability Income Insurance policy provides benefits that are 
not available under  other types of policies. The regular monthly income 
provided by a Disability Income Insurance policy , to replace a portion of the 
insured’s lost income , in the event that he is disabled and is not able to work , 
helps to ease the financial difficulties that the insured and his family may face 
in such a situation. The fa ct that the policy also pays a reduced benefit if the 
insured is able to return to work after a disability , but has to accept a job with 
lower pay , helps the family to maintain more or less the same standard of living 
immediately prior to his disability. I n addition, as there is no specification on 
how the income received should be used, it could  thus be used for any purpose, 
such as repaying an outstanding loan.  
 
15.2 As this policy contains a Limitation Clause to prevent over -insuring, you must 
ensure that the deferred period and percentage of salary to be insured are 
correct , so that in the event of a claim, your client will not be subject to the 
Limitation Clause. Besides, you must ensure that the cover will c ontinue for the 
whole of the insured’s working life. As such, a thorough fact -finding or advisory 
process  is important.  
 

4. Disability Income Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   87  
APPENDIX  4A 
 
ABC Insurance Company (Singapore) Ltd  
21 Any Street, ABC Centre, Singapore 654321  
Tel: (65) 6789 8181   Fax: (65) 6789 8282  
 
Clinical Abstract Form  
 
Important Notes:  
1. This form is required for the application of medical report from hospital/clinic and should be completed by the patient 
or the patient’s parent (if patient is below 21 years of age) or the patient’s next -of-kin (if patient is deceased)  
2.


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For request of medical report from hospital, this form is to be submitted to the Medical Records Department of the 
hospital.  
 
 Date (dd/mm/yyyy) _____________  
To: Doctor -In-charge  
 
Dear Sir/Madam   
 
Name of Patient______________________________________                    NRIC No.____________________  
 
 
Re: Application for Medical Report  
 
I hereby authorise you to furnish ABC Insurance Company (Singapore) Ltd, 21 Any Street Centre, Singapore 
654321, with a detailed medical report on the above -named patient. This report is required for insurance purposes. 
I agree that a photocopy of this form shall be as valid as the original.  
 
 
 
 
Yours sincerely  
 
 
_________________________  ___________________________________________ _ 
 Signature of Patient   Signature of Patient’s Parent/Patient’s Spouse/Next -of-kin1 
    (if patient is below 21 or is deceased)  
 
 
Particulars of Patient  
 
Name (as shown in NRIC)  
 
NRIC No.  
 
Address  
 
 
Particulars of Patient’s Parent/Patient’s Spouse/Next -of-kin (if patient is below 21 or is deceased)  
Name (as shown in NRIC)  
 
NRIC No.  
 
Address  
 
Relationship to patient  
 
 

10
DISABILITY INCOME INSURANCECHAPTER
04
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
What is Disability Income 
Insurance?It is sold as an income-protection product in that it helps to replace a portion of the 
insured’s income that he loses if he becomes incapacitated and unable to work as a 
result of an accident or illness, subject to certain conditions.
Differentiate between 
Disability Income 
Insurance and Total and 
Permanent Disability 
Benefit
How Disability Income 
Insurance works?• Insurers will allow the benefit amount to cover only up to 75% of the insured’s 
average income over the past 12 months immediately prior to his disability. 
• Most insurers also impose a ceiling on the income to be covered (e.g. S$15,000). 
• Some insurers grant a lower percentage for the self-employed, e.g. 60% of the 
past 12 months’ income. 
• The purpose of replacing only a certain percentage of the insured’s income is to 
ensure that the insured will not be better off financially from the benefit which 
he receives under his Disability Income Insurance policy, so that he will have the 
incentive to go back to work.Disability Income Insurance  Total And Permanent Disability 
Benefit 
Provides an income replacement if the 
insured is unable to work.Serves to accelerate the death benefit 
payable under a Life Insurance policy, 
to alleviate the financial burden 
or hardship of the insured and his 
dependants.
Benefits are payable on a monthly 
basis for up to a fixed number of years 
(such as five or ten years), or until the 
insured reaches a certain age (such as 
the age of 60 or 65 years).Benefit under the Total and 
Permanent Disability Benefit is 
payable in instalments, or one lump 
sum, depending on the terms and 
conditions as specified in the Life 
Insurance policy.
Disability definition relates to the 
extent the insured can fulfil the duties 
of his occupation.Disability is defined to be total and 
permanent, such as loss of limbs or 
loss of eyesight. 
It can be purchased as a stand-alone 
policy or as a rider.It is usually incorporated into the Life 
Insurance policies in Singapore. 
Maximum sum assured is up to a 
specified percentage of the salary.Sum assured is not pegged to salary.
Escalation benefit is available. No escalation benefit.
Partial disability benefit is available. Partial disability benefit is not 
available.
Choice of deferred/elimination period 
is available (e.g. one month, three 
months, six months, etc.).No deferred period as specified (but 
usually there is a 6-month waiting 
period requirement as proof of 
permanent disability). 
It is usually only available to working 
adults with earned income/salary. There is usually no restriction on 
non-working people, e.g. children and 
housewives, as it is bundled with the 
death benefit under a Life Insurance 
policy.

11
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Total disability Term “Total Disability” is clearly defined in the policy and may take one of the 
following forms:
1. Own occupation disability;
2. Modified own occupation disability; 
3. Any occupation disability and
4. Severe disability.
Partial disability When the insured recovers from a total disability to perform some major duties of 
his occupation, but at a salary which is at least 25% lower than the pre-disability 
salary.


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Severe disability.
Partial disability When the insured recovers from a total disability to perform some major duties of 
his occupation, but at a salary which is at least 25% lower than the pre-disability 
salary.
Recurrent disability (linked 
claims)• The insured who has been receiving the disability benefits returns to work but 
suffers a relapse within a specified period of time (usually 180 days) from the 
same cause, most insurers will waive the deferred/elimination period, and the 
benefit payments will re-commence immediately. 
• In such a case, the claim will be treated as a continuation of the earlier claim for 
the purpose of determining the duration of the benefit payment period.
Benefit period • It is the maximum period for which disability benefits are payable to the insured 
for any one episode of disability. 
• It can be short term (e.g. five years) or long term (e.g. up to age of 60 years). 
• The shorter the benefit term, the lower will be the premiums.
Deferred/elimination 
period• A Disability Income Insurance policy will start paying its benefits after the 
insured has been disabled for a specified period known as the deferred, 
elimination or pre-benefit period. 
• The longer the deferred period, the cheaper will be the premium, since the 
duration and frequency of claims are thereby reduced.
Difference between “own 
occupation”, “modified 
own occupation”, “any 
occupation” and “severe 
disability“ definitionsOwn Occupation
• “The insured’s inability to perform the material duties of his own occupation”
Modified Own Occupation
• “The insured’s inability to perform any gainful occupation or a similar 
occupation for which the insured is reasonably suited by reason of education, 
training or experience”
Any Occupation
• This is a more restrictive definition of Total Disability. It means: “the insured’s 
inability to perform any occupation”
Severe Disability
• This definition follows the Long-Term Care Insurance definition where the 
insured is unable to perform at least three of the six Activities of Daily Living 
(ADLs) – washing, dressing, feeding, toileting, mobility, and transferring.
Eligibility criteria for 
payment of Disability 
Income Insurance benefit• Keep the policy in force;
• Be working (employed) or in-between jobs when being disabled;
• Still be disabled after the deferred/elimination period;
• Meet the definition of total or partial disability as stated in the policy;
• Not have reached the expiry age as stated in the policy;
• Not have resided outside Singapore for more than a certain period of time 
(usually not more than six months); and
• Not have other sources of income (e.g. payment from Work Injury 
Compensation Insurance), which when totalled up, is more than the benefits 
due to him under his Disability Income Insurance policy.
Types of benefits offered by Disability Income Insurance
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Total disability benefit The main benefit offered by Disability Income Insurance is the monthly cash benefit 
payable to the insured to replace his lost income (e.g. up to 75%), when he becomes 
totally disabled through an accident or illness.
Partial disability benefit Partial Disability Benefit is also known as “Rehabilitation Benefit”. It provides a 
reduced benefit to the insured if he is able to return to work at a reduced income 
of 75% of his Pre-disability Earnings, or lower, even though he has not been fully 
recovered.

12
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Rehabilitation expense 
benefitInsurers encourage the disabled insured to participate in rehabilitation 
programmes. They will reimburse an insured for the rehabilitation costs incurred.
Escalation benefit It is a benefit offered by insurers as a hedge against inflation. With an additional 
premium, the insured can opt for a 3% or 5% escalation benefit per annum.
Waiver of premium benefit The premiums due under the Disability Income Insurance policy will be waived 
during the disability benefit payout period (applies to both total and partial 
disability).
Death benefit Most insurers provide a lump sum amount to be paid to the insured’s dependants, 
in the event of the insured’s death.
How to compute the 
partial disability benefit?
How the escalation benefit 
works?Eddy, an engineer, became disabled on 30 June 2018. He was insured for S$6,000 
(75% of his monthly salary of S$8,000) and had opted for a 3% per annum 
escalation benefit and a 6-month deferred period.


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He was insured for S$6,000 
(75% of his monthly salary of S$8,000) and had opted for a 3% per annum 
escalation benefit and a 6-month deferred period. 
The events following his disablement were as follows:
1-1-2019: Insurer made the first monthly payment of S$6,000
1-2-2019: Insurer made the second monthly payment of S$6,000
Eddy continued to be disabled. Insurer continued to pay S$6,000 each month.
1-1-2020: Insurer paid S$6,180 [(S$6,000 + S$6,000 x 3% (escalation benefit)]
1-2-2020: Eddy had since found a job as a clerk which paid him S$2,000 a month. 
The insurer paid him a partial disability benefit of S$4,635
How the limitation of 
disability benefit clause 
works?Purpose is to prevent over-insuring by restricting the monthly benefit payable, so 
that the total benefit (including other Disability Income policies that the insured may 
have) shall not exceed the insured’s pre-disability earnings or some proportion of it.  
In the event of a claim, the disability benefit payable will be reduced by the 
following sources of income:
1. Payments from other insurance policies against disability (except the Total and 
Permanent Disability Benefit under Life Insurance policies), including Work 
Injury Compensation Insurance; and
2. Any continuing salary, commission or other incomes derived from the insured’s 
occupation or business in which he was engaged immediately prior to his 
disability.Pre-disability Earnings - Present Earnings
Pre-disability EarningsX Total Disability Benefit
Pre-disability Earnings - Present Earnings
Pre-disability EarningsX Disability Benefit
S$(8,000 - 2,000)
S$8,000X S$6,180
S$4,635=
=


13
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Features of Disability 
Income Insurance• Can be issued as a stand-alone (for which then, no rider is possible) policy, or as 
a rider to a basic Life Insurance plan.
• Provides a regular monthly income during the insured’s total and partial 
disablement.
• Premiums are waived during the benefit period.
• Benefits may be level, or may increase at a given rate.
• A choice of deferred/elimination period.
• A choice of benefit period.
• A choice of escalation benefit (if available).
• Level premium can be paid on a monthly, quarterly, half-yearly or annual basis, 
depending on the insurer’s practice.
• Payment of partial disability benefits if a person returns to work earning a lower 
income.
• Provision of rehabilitation expense benefit.
• Provision of death benefit.
• No restriction on the use of the cash benefits paid.
• Disability benefit may discontinue if the insured stays outside Singapore for a 
specified period.
• Cover will be terminated if the insured resides outside Singapore for more than 
a continuous specified number of days, within any one policy year, unless the 
insurer grants the insured the continuity of cover (an additional premium may 
be charged).
• Cover will be terminated if the insured is not engaged in any full-time 
occupation or profession for a continuous period of a specified number of days, 
when he is not suffering from a disability (see Section 11 of this chapter for the 
other causes for the termination of a policy).
• Policy is usually guaranteed renewable and non-cancellable (the insurer has the 
right to adjust the premium rates if the insured changes his occupation to one 
which is of a higher risk) by the insurer.
• No surrender value, i.e. the insured cannot return the policy to the insurer for 
cancellation in exchange for cash payment.
• No assignment is allowed.
• Policy cannot be written as a third-party policy.
• Benefits received are non-taxable.
• Policy will lapse if the premium is not paid within the 30 days’ grace period.
Documents required 
for the underwriting 
of Disability Income 
Insurance for an individual 
employee, as well as for 
the self-employed personIndividual (Salaried Employee)
Proposal form (also called Application form) plus: 
1. Computerised payslip; or
2. Certified letter from company (with company letterhead) or
3. Notice of Assessment; or
4. Central Provident Fund (CPF) Statement (six months) and large amount 
questionnaire if the annual benefit is more than a certain amount, e.g. 
S$60,000; and
5. Medical test report (e.g. medical examination report, etc.) based on the age and 
amount of disability benefit proposed.
Self-employed Person
Proposal form plus:
1.


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S$60,000; and
5. Medical test report (e.g. medical examination report, etc.) based on the age and 
amount of disability benefit proposed.
Self-employed Person
Proposal form plus:
1. Notice of Assessment for the last three years; or
2. Audited company’s accounts for the last three years; and large amount 
questionnaire if the annual benefit is more than a certain amount (e.g. 
S$60,000); and
3. Medical test report (e.g. medical examination report, etc.) based on the age and 
amount of disability benefit proposed.

14
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Underwriting 
considerations for 
Disability Income 
Insurance:
• OccupationOccupation is a crucial underwriting consideration for two reasons:
1. Some occupations have a higher risk of disability from accidents (e.g. lorry 
driver), or illnesses, than others. 
2. It is easier to return to work with some degree of incapacity in some 
occupations than in others.
Typical rating structure as follows:
1. Class I.
2. Class II.
3. Class III.
4. Class IV.
5. Decline (uninsurable).
Underwriting 
considerations for 
Disability Income 
Insurance:
• Benefit amountUnderwriter will assess to ensure the benefits proposed are reasonable for the type 
of occupation, nature of work involved, and stated earnings.
Underwriting 
considerations for 
Disability Income 
Insurance:
• Benefit periodBenefit period is the duration that the insurer needs to pay out the benefit. 
Underwriters may use this to determine the terms of acceptance.
Underwriting 
considerations for 
Disability Income 
Insurance:
• Deferred/ elimination 
periodThe deferred/elimination period chosen helps the underwriter to determine 
whether there is any moral hazard involved.
When would the benefits 
under a Disability Income 
Insurance policy cease to 
be payable?• When the insured is fit to return to work;
• When death occurs; or
• When the benefit period has expired.
Exclusions commonly 
found under Disability 
Income Insurance1. Self-inflicted injury, while sane or insane;
2. Indulgence in alcohol or drug taking, unless taken under the directions of a 
registered medical practitioner;
3. Invasion, strike, riot, civil commotion, war (declared or undeclared) or act of war 
or warlike operation;
4. Illness or injury sustained while the insured is in the service of the armed forces 
of any country, except for reservist in-camp training during peacetime operation 
in accordance with the Enlistment Act 1970;
5. Pregnancy or childbirth or any complication arising there from, except in the 
case of pregnancy, where the disability continues for more than 90 days after 
the termination of pregnancy, the disability will be deemed to have commenced 
90 days after the termination of the pregnancy;
6. Participation in any aerial activity, including parachuting and sky-diving or travel 
in any type of aircraft, other than as a fare paying passenger on a regularly 
scheduled flight of a commercial airline;
7. Sexually transmitted disease, or any disability, illness or injury or any condition 
or complication arising from or caused by (whether directly or indirectly) the 
human immunodeficiency virus (HIV), including Acquired Immune Deficiency 
Syndrome (AIDS) and AIDS-related conditions;
8. Participation in any professional sports or hazardous sports, including racing of 
any kind on horse or wheels, mountaineering, rock climbing and scuba diving;
9. Any pre-existing condition (i.e. condition occurring before the payment of the 
initial payment).
The above list of exclusions may differ from insurer to insurer.

15
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Events that will cause 
a Disability Income 
Insurance policy to be 
terminated• Policy has reached its expiry date;
• Premiums due are not paid within the grace period; 
• Insured dies;
• Insured reaches the expiry age as stated in the policy schedule;
• Insured resides outside Singapore for an aggregate period of more than a 
specified number of days (e.g. 300 days) within one policy year, without seeking 
the insurer’s prior written approval for continuation of cover; or
• Insured is not employed in a full-time occupation or profession for a continuous 
period of a specified number of days (except if he is disabled).
Coverage and features of 
Group Disability Income 
InsuranceCover provided by a Group Disability Income Insurance policy works in the same 
way as an individual Disability Income Insurance policy.


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Coverage and features of 
Group Disability Income 
InsuranceCover provided by a Group Disability Income Insurance policy works in the same 
way as an individual Disability Income Insurance policy. The benefits and exclusions 
are also the same
General underwriting 
principles for both 
Individual and Group 
Disability Income 
InsuranceThe selection process in Group Disability Insurance policies is similar to that for the 
individual disability plans. 
As the group must have a Group Term Life Insurance policy before they are eligible 
for this disability policy, most of the underwriting criteria will have already been 
met. 
The additional factors that the underwriters will need to take into consideration are:
1. Nature of the company’s business;
2. Age of the individual employee;
3. Exact nature of work of each employee;
4. Salary of each employee;
5. Benefit period applied for;
6. Benefit amount applied for; and
7. Claims experience of the group under the previous Group Disability Income 
Insurance policy.
General claims procedures 
for both Individual and 
Group Disability Income 
InsuranceClaims procedures for individual or group disability income are similar. 
• In the event of a claim, the insured must notify the insurer within a specified 
period of time (e.g. 60 days) from the date of commencement of the disability. 
• Failure to comply with this requirement might cause the claim to be invalidated, 
unless the insured could prove that it was not possible for him to notify the 
insurer within the specified period, and that he had tried his best to do so.
• If the insured resides outside Singapore while the policy benefits are payable, 
the insurer may impose conditions.
General claims documents 
for Disability Income Policy• Claim form giving the personal particulars of the insured, as well as details of 
his occupation and disability;
• Claimant’s statement;
• Clinical Abstract form (see Appendix 4A);
• Physician’s statement/doctor’s statement to be completed by the insured’s 
attending physician giving full details of his disability;
• NRIC or birth certificate for verification of the insured’s age;
• Evidence of earnings, which can be in the form of income tax returns (IR8A 
form), copies of payslips for the 12 months prior to the commencement of 
disability, and letter from employer to certify that the claimant (insured) is not 
being paid during the period of disability;
• Letter from company certifying that the insured’s service has been terminated 
(if available);
• Copies of Medical Certificates;
• All available Laboratory and Tests results;
• A copy of the Police Report if the cause of the disability is due to an accident; 
and
• A copy of the Incident Report (required to be submitted to the Ministry of 
Manpower if the incident occurs at the workplace).

Health Insurance   
88 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]       CHAPTER 5  
LONG -TERM CARE INSURANCE  
 
 
 
CHAPTER OUTLINE  
 
1. Introduction  
2. What Is Long -Term Care (LTC) Insurance?  
3. Benefits Offered Under LTC Insurance  
4. Other Benefits Provided Under LTC Insurance  
5. Maximum Benefit  
6. Benefit Payment Term  
7. ElderShield  
8. CareShield Life  
 
 
 
LEARNING OUTCOMES  
 
After studying this chapter, you should be able to:  
▪ explain Long -Term  Care  (LTC)  Insurance  
▪ know the types of LTC Insurance  
▪ know the benefits offered under L TC Insurance  
▪ know the eligibility criteria for payment of L TC benefit s 
▪ know what are considered as “Activities of Daily Living  (ADLs) ” and how they are 
related to the benefit payment under L TC Insurance  
▪ know the other benefits provided  under L TC Insurance  
▪ explain maximum benefit sum  payable  and benefit payment term  under LTC 
Insurance  
▪ know what is Elder Shield  
▪ know the persons covered under Elder Shield  
▪ know how to check Elder Shield coverage  
▪ know the scope of protection under Elder Shield and its premiums  
▪ explain when an insured is eligible to claim under Elder Shield  
▪ know how to make a claim under Elder Shield  
▪ know what is CareShield Life and how it provides better protection  
▪ know the differences between Elder Shield and CareShield Life  
▪ explain the features o f MediSave Care  
 
 
 

5. Long -Term Care Insurance  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   89  
Contents  
CHAPTER OUTLINE  ................................ ................................ ................................ ...........  88 
LEARNING OUTCOMES  ................................ ................................ ................................ .... 88 
1. INTRODUCTION  ................................ ................................ ................................ ....... 90 
2.


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INTRODUCTION  ................................ ................................ ................................ ....... 90 
2. WHAT IS LONG -TERM CARE (LTC) INSURANCE?  ................................ .................  90 
3. BENEFITS OFFERED UNDER LTC INSURANCE  ................................ ......................  91 
A. Types Of LTC Policies ................................ ................................ ........................  91 
B. Eligibility Criteria For Payment Of LTC Benefits  ................................ ..............  92 
B1. Meets The Definition Of Inability To Perform Activities Of Daily Living 
(ADLs) Or Advanced Dementia  ................................ ................................ .. 92 
B2. Meets The Deferred Period Requirement  ................................ ..................  93 
B3. Does Not Cover Pre -existing Conditions  ................................ ...................  94 
4. OTHER BENEFITS PROVIDED UNDER LTC INSURANCE  ................................ ....... 94 
5. MAXIMUM BENEFIT  ................................ ................................ ................................  95 
6. BENEFIT PAYMENT TERM  ................................ ................................ ......................  95 
7. ELDERSHIELD  ................................ ................................ ................................ ...........  95 
A. What is ElderShield?  ................................ ................................ .........................  95 
A1. Overview  ................................ ................................ .............................  95 
A2. Monthly pay -outs ................................ ................................ .................  96 
A3. Fixed pr emiums  ................................ ................................ ...................  96 
A4. Government administration of ElderShield  ................................ ..........  96 
B. The Persons Covered Under ElderShield  ................................ .........................  96 
B1. The Persons Enrolled  ................................ ................................ .................  96 
B2. Chec king on ElderShield Coverage  ................................ ...........................  96 
B3. Protection Afforded Under ElderShield ................................ .....................  97 
B4.   Premiums of ElderShield  ................................ ................................ .........  97 
B5. When The Insured Is  Eligible to Claim  ................................ .....................  97 
B6. Making A Claim  ................................ ................................ ..........................  98 
8. CARESHIELD LIFE  ................................ ................................ ................................ .... 98 
A. A Comparison Between CareShield Life And ElderShield  ............................  100 
B. MEDISAVE CARE  ................................ ................................ .............................  100 
 
 
  


Health Insurance   
90 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 1. INTRODUCTION  
 
1.1 Growing old gracefully and leading a healthy, independent lifestyle is the desire 
of most people. However, age-related illnesses and injuries may be serious 
enough to prevent them from being able to take care of themselves 
independently. Chronic medical co nditions like diabetes, stroke, hypertension , 
dementia , Alzheimer’s disease,  and the complications that arise from these 
medical conditions may render the elderly people unable to care for themselves 
independently. They will need help with Activities of Daily Living  (ADL s), such 
as feeding , bathing,  dressing, using the toilet , and moving around. Some may 
even require special care in a facility, such as a nursing home. The costs of such 
care can strain one’s financial resources and , therefore , become a financial 
burden to one’s famil y.  
 
1.2 Singapore’s population is ageing rapidly,  and the repercussions are being felt 
across the country. An ageing population coupled with increased longevity will 
lead to higher national healthcare and long -term care expenditure for the 
elderly. National expenditure on healthcare will rise, given that there will be 
three times the number of Singapore citizen s aged 65 years and above by 2030. 
With fewer children to support parents and grandparents, and the increasing 
numbers of elderly  people  living alone, more paid help , such as domestic 
workers, home -based caregivers and nurses , will also be needed.  This wil l be a 
growing and worrying concern for the Singapore Government , as it will have 
to ensure that this group of elderly will have enough protection against the cost 
of long -term care when such needs arise.  
 
1.3 In this chapter, we will look at how Long -Term Car e Insurance can help to 
provide funds to supplement the cost of financing an individual’s long -term 
care needs.  
 
 
2. WHAT IS LONG -TERM CARE (LTC) INSURANCE?  
 
2.1 LTC Insurance is designed to meet the costs of care for a person who, because 
of an accident, illness , frailty or a combination of these, is physically unable  to 
function  independently. Instead, he must  depend on others to help him to 
perform most basic  ADLs .


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Instead, he must  depend on others to help him to 
perform most basic  ADLs . In the next section of this chapter, we shall see what 
constitutes  ADLs .  
 
2.2 Even though  people of all ages may require long -term care at some point of 
time in their life, th is product is usually positioned as a vehicle to provide funds 
for long -term care for the elderly  people . However, there are two key 
advantages of buying LTC , while clien ts are still young and healthy, with no 
existing medical disabilities.  
▪ Firstly, the product will cost less as the premiums will rise considerably with 
age.  
▪ Secondly, buying at a younger age also means  that there is less risk of being 
rejected for cover owing to existing disabilities or medical history.  
 
 
 
LTCI  

5. Long -Term Care Insurance  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   91  
2.3 Although LTC is a complex and relatively high -cost product, it offers customers 
an alternative to supplement any public benefit or other sources of funds that 
they may have. LTC Insurance covers care generally not covered by other 
Medical Insurance. It will pay in addition to other insurance policies that the 
insured has, e.g. MediShield  Life, Hospi tal Income and Critical Illness Insurance 
policy . 
 
 
3. BENEFITS OFFERED UNDER LTC  INSURANCE  
 
A. Types Of LTC Policies  
 
3.1 Two types of LTC policies are available and they are:  
(a) “Service -based”  policy pays a benefit when a n insured incurs costs for a 
service covered under the policy  (e.g. home care or nursing care)  and 
satisfies the benefit trigger. This type of policy can pay benefits in two ways:  
▪ Expense incurred method  where  the insurer will reimburse the insured 
for the cost incurred in using one of the services covered under the 
policy, up to the  covered amount.  
▪ Indemnity method  pays the covered amount , regard less of the actual  
cost of the services received.  
 
(b) “Disability -based”  polic y pays a benefit when a n insured meets the benefit 
trigger, regardless of the service use. The benefit  trigger may be based on 
limitations in ADLs and/or degree of cognitive impairment. This means that 
the benefits may be paid if the insured is diagnosed to be suffering from 
advanced dementia (including Alzheimer’s disease) , or when the insured is 
assessed to be suffering significant limitations in ADLs, or where there is a 
deterioration or loss of intellectual capacity resulting in a significant 
reduction in mental and social fu nctioning, and the need for  continuous 
supervision.  
 
3.2 Benefits are usually  paid daily or monthly:  
(a) The “daily benefit”  polic y provides  up to  the fixed benefit amount per day 
(e.g. up to S$300 per day) usually to cover costs incurred on nursing home 
care services. Such policies may also include home care benefits which are 
usually expressed as a percentage (e.g. 50%) of the nursing care benefit. 
This type of policy may be issued on a “service -based” or “disabili ty-based” 
basis.  
(b) The “monthly benefit”  policy is the most common type of LTC plan found 
in Singapore . This policy pays a monthly cash benefit to the insured upon  
being certified by an approved and registered medical practitioner to be 
unable to perform the specified minimum number of defined ADLs after a 
prescribed period . Some insurers pay 100% of the LTC monthly benefit if the 
insured is unable to perform at least the minimum number of ADLs , whereas 
others p ay on a graduated scale, e.g. if the insured cannot perform two of 
the six ADLs , only 50% of the LTC  monthly benefit is payable , whereas if the 
insured cannot perform four out of the six ADLs, 100% of the LTC monthly 
benefit will then be payable.  
 

Health Insurance   
92 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] B. Eligibili ty Criteria For Payment Of LTC Benefit s  
 
3.3 The insured need not be hospitalised to be eligible for the LTC benefits.


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4] B. Eligibili ty Criteria For Payment Of LTC Benefit s  
 
3.3 The insured need not be hospitalised to be eligible for the LTC benefits. He can 
use the benefits received under his LTC to pay for the costs of engaging a  
domestic helper (maid),  to pay for the costs of staying in  a nursing home , or to 
provide coverage of expenses in an assisted -living facility or home -care 
programme .  
 
3.4 However, he must meet certain other criteria , before he can be eligible to claim 
for the LTC benefit s. 
 
B1. Meets The Definition Of Inability To Perform Activities Of Daily Living (ADL s) Or 
Advanced Dementia  
 
3.5 Inability To Perform ADLs  
 
(a) One of the key criteria for paying the benefit s in LTC policies is the insured’s 
inability to perform certain specific actions , which are essential , if an 
individual is to be able to live independently without support from others. 
These are known as “Activities of Daily Living” (ADLs) . Insurers offering LTC  
Insurance  typically adopt the following ADLs , which is in line with the ADLs 
used in internatio nally recognised  functional assessments :   
 
 
  
 
 
 
 
 
 
 
 
(b) The definitions of these ADLs are important. Some policies will pay benefits 
if, for example, three out of the specified list of ADLs cannot be performed , 
while others may insist on five or six. The premiums will obviously be higher, 
the lower the number o f ADLs which the insured is required to be unable to 
perform , to qualify for the benefit s. 
 
(c) The ADLs are generally defined as follows:   
▪ Washing : the ability to wash in the bath or shower (including getting 
into and out of the bath or shower) or wash  by other means.  
▪ Dressing : the ability to put on, or take off, secure and unfasten all 
garments and, as appropriate, any braces , artificial limbs , or other 
surgical  or medical  appliances.  
▪ Feeding : the ability to feed oneself after the food has been prepar ed 
and made available.  
Washing  
 Dressing  
 Feeding  
Mobility  
 Transferring  
Toileting  
Activities of Daily  
Living (ADLs)  

5. Long -Term Care Insurance  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   93  
▪ Toileting : the ability to use the lavatory or manage bowel and bladder 
function through the use of  protective undergarments  (e.g. diapers)  or 
surgical appliances  (e.g. urinary catheters)  if appropriate.  
▪ Mobility : the ability to move indoors from room to room on level  
surfaces.  
▪ Transferring : the ability to move from a bed to an upright chair or 
wheelchair , and vice versa.  
 
Washing  Dressing  Feeding  Toileting  Mobility  Transferring  
  
 
  
 
(d) Failure to perform any of the above ADLs means that the insured will be 
unable to perform the task , even with the aid of assistive devices (e.g. 
wheelchair , clutches ) on his own and always require the assistance of another 
person throughout the entire activity.  
 
3.6 Advanced Dementia  
(a) Advanced dementia means that the insured is suffering from deterioration o r 
loss of intellectual capacity or abnormal behaviour as evidenced by the 
clinical state and accepted standardised questionnaires or tests, arising from 
Alzheimer’s disease or irreversible organic disorders, excluding neurosis and 
psychiatric illness, resu lting in significant reduction in mental and social 
functioning requiring the continual supervision of the insured to prevent the 
insured from harming others or himself.  
(b) The important issues are that the dementia must arise from an organic 
reason , and that the insured requires continual supervision.   
 
B2. Meets The Deferred Period Requirement  
 
3.7 Besides failure to perform the ADLs, the insured may also need to fulfil a deferred 
period requirement before being eligible to receive the LTC benefits. Most 
insurers have a deferred period of 90 days, i.e. the insured will receive the benefits 
only if he is still unable to perform the specified minimum number of ADLs after 
the lapse of 90 days , with the deferred perio d commencing from the first day of 
any continuous period of inability to perform the ADLs.


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Many elderlies  may suffer 
short periods of dependence after a stay in hospital for an illness or injury, and a 
deferred period will ensure that short -term claims are  avoided and , therefore, 
reduce the premium costs. Insurers that offer hospital benefits as an extension to 
the LTC cover may impose a shorter deferred period for such benefits to take 
effect.  
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Period usually 
90 Days  

Health Insurance   
94 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] B3. Does Not Cover Pre -existing Conditions  
 
3.8 LTC policy would  not pay if the claim arose from a pre -existing condition that was 
not disclosed in the proposal form . If disclosed, the insurer may accept the 
application at standard premium rates, or at sub -standard premium rates, i.e. may 
charge a higher pr emium, accept the application with exclusions , or reject the 
application. The decision s taken on the application and premium rates charged 
are largely dependent on the severity of the conditions of the proposer ( also called 
the applicant  or the intending i nsured ). 
 
3.9 The purpose of the provision is to guard against people buying the coverage 
knowing that they have a condition that is likely to lead to a claim . This is also 
known as anti -selection against the insurer . 
 
3.10 The insurer  may also impose other policy conditions for the insured to comply 
with, before they are eligible to claim the benefits.  
 
 
4. OTHER BENEFITS PROVIDED UNDER LTC  INSURANCE  
 
4.1 Insurers also usually include a death benefit which is payable to the insured’s 
beneficiaries upon the death of the insured. However, t he quantum is small , 
ranging from an indicative amount of S$5,000 to six times the LTC monthly 
benefit  for example . Upon paying out the death benefit, the cover ceases.  
 
4.2 Some insurers, in addition to LTC and death benefits, may also package it with 
other benefits, such as:  
(a) Hospital Room And Board Benefit – a daily rate for each day is payable if 
the insured is hospitalised;  
(b) Surgical Procedure Benefit – a specified amount is payable if the insured 
goes for surgical procedures that are medically necessary;  
(c) Financial Assistance With Adaptation  Benefit  – a specified sum, such as two 
times of the monthly benefit, is payable if the use of assistive devices (e.g. 
wheelchair) is deemed necessar y by a doctor , to assist the insured to 
perform an ADL;   
(d) Extended Care Benefit – an extra specified sum, such as an extra monthly 
benefit, is payable every three or five years ; and 
(e) Rehabilitation Benefit – a reduced benefit (e .g. 50% of the insured amount ) 
when the insured makes partial recovery (such as if he is unable to do two 
instead of three  ADLs). 
 
4.3 These benefits are subject to limits on the maximum sum that can be claimed , 
as well as limits on the benefit payment period. Otherwise, the product will 
become prohibitively expensive. The main purpose of LTC Insurance is not  to 
fulfil the need of income protection , or for reimbursement of medical expenses, 
e.g. hospital and surg ical bills. Such needs are better met by other policies, such 
as Disability Income Insurance and/or Hospital and Surgical Insurance.  
 

5. Long -Term Care Insurance  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   95  
5. MAXIMUM BENEFIT  
 
5.1 For LTC benefits, depending on the plan that the insured chooses, he may claim, 
for example, between S$300 and S$5,000  per month , as long as he is unable to 
perform the specified number of ADLs , and meets the other policy conditions. 
Some insurers may limit the maximum benefit sum payable.  
 
5.2 For polic ies packaged with hospital benefits, there is usually a maximum 
amount that can be claimed per day (the hospital stay must also exceed a 
specified number of hours , e.g. 12 hours,  for the benefit payments to be 
claimable) , subject to a maximum number of days per year of hospital isation .   
 
5.3 For those with Surgical Benefits, the insured, again depending on the plan that 
he has purchased, can claim only a maximum amount per surgery . All the 
benefits may then be s ubject to a maximum combined (i.e. combining LTC and 
Hospital and Surgical benefits) limit. Once the insured has claimed the 
maximum limit (or combined limit), the policy expires.  
 
 
6.


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combining LTC and 
Hospital and Surgical benefits) limit. Once the insured has claimed the 
maximum limit (or combined limit), the policy expires.  
 
 
6. BENEFIT PAYMENT TERM  
 
6.1 While most insureds prefer  the policy benefits to be payable as long as they 
live, the premiums for such plans may be too expensive for them to buy . Some 
insurers allow customers to choose the benefit payment term . This means that 
the benefits will be payable for the chosen  period  (e.g. 12 years of benefits) . The 
premiums payable for a shorter benefit payment term will be cheaper and more 
affordable.  During the benefit payment period, premiums payable are waived.  
 
6.2       Notwithstanding the above, there are LTC insurance schemes  (with affordable 
premiums) that offer l ifetime cash pay-outs for as long as the insured is severely 
disabled  such as CareShield Life which we shall examine in a later part of this 
chapter.  
 
7. ELDERSHIELD1   
 
A.   What is ElderShield ?  
 
7.1 ElderShield is a long -term care insurance scheme targeted at severe disability, 
especially during old age.  
 
A1. Overview  
 
7.2 When it was introduced in 2002, ElderShield provided pay-outs of $300  per 
month for up to five years upon severe disability. It was subsequently reviewed 
in 2007 to provide better benefits of $400  per month for up to six years. The 
benefits the insured  will receive depends on which scheme he joined. Please 
note that the ElderShield scheme is no longer open for new ap plications.  
 
 
1 https://www.cpf.gov.sg/member/healthcare -financing/eldershield   


Health Insurance   
96 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] A2. Monthly pay-outs 
 
7.3 ElderShield provides monthly cash pay-outs for up to 72 months to help pay 
out-of-pocket expenses for the care of the severely disabled.  
 
A3. Fixed premiums  
 
7.4 Premiums are determined when the insured  enter s the scheme,  and the 
premiums  remain fixed. The insured must  pay the premium  each year until the 
policy anniversary after turning age 65, or when the insured  make s a successful 
claim.  
 
A4. Government administration of ElderShield  
 
7.5 From 1 November 2021, the Government has taken over the administration of 
ElderShield from private insurers ( Singlife with Aviva , Great Eastern Life 
Assurance Co Ltd, and Income Insurance Limited ). 
 
B. The Persons  Covered Under ElderShield  
 
B1. The Persons  Enrolled  
 
7.6 Until 2019, all Singapore Citizens and Permanent Residents with MediSave 
Accounts  were enrolled in ElderShield at the age of 40, unless they opted out.  
 
7.7 Since 2020, auto -enrolments into ElderShield  were discontinued. Singapore 
Citizens and Permanent Residents who turned 40 in 2020 were instead enrolled 
into CareShield Life.  
 
7.8 For those   born on 30 September 1932 or before, or had a pre -existing disability 
as of 30 September 2002, they would  not have been able to join ElderShield in 
2002. Instead, they may be eligible for assistance under the Interim Disability 
Assistance Programme for the Elderly (IDAPE) if they become severely disabled.  
 
7.9 To learn more about IDAPE, please visit this website:  
https://www.aic.sg/financial -assistance/interim -disability -assistance -
programme -elderly  
 
B2. Check ing on ElderShield Coverage  
 
7.10 The following steps should be performed in checking on one’s  coverage:  
(a) Log in to one’s  CPF Digital Services using one’s  Singpass.  
(b) Hover over "my cpf" and click on "Healthcare" under "My dashboards".  
(c) Click on “Long -term care insurance” on the anchor links or scroll down to 
the “Long -term care insurance” section.    
 
7.11 If the person is  not covered, no information on ElderShield will be reflected. To 
check one’s  coverage, he or she shoul d visit the CPF website at Central 
Provident Fund Board (CPFB) .


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5. Long -Term Care Insurance  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   97  
B3. Protection Afforded Under ElderShield  
 
7.12 ElderShield provides the following protection and benefits:  
(a) Lifetime coverage – The insured continue s to be covered for life once he 
has completed  paying all his premiums at age 65.  
(b) Up to 72 months  of cash pay-outs – The insured stands to r eceive a 
monthly cash pay-out for up to five or six years, depending on the plan  
chosen . With ESH400, he will  get $400 per month for up to 72 months, and 
with ESH 300, he will  get $300 per month for up to 60 months.  
(c) Fully payable with MediSave – The insured  can use his MediSave to pay 
his ElderShield premiums. Family members can help the insured  by 
paying from their own MediSave or  topping up the insured’s  account w ith 
cash.  
(d) Worldwide coverage – The insured will  remain covered, be able to make 
a claim, and receive pay-outs no matter where he lives in the world.  
 
B4.   Premiums of ElderShield  
 
7.13 The premium payment for ElderShield  is up to age 65, with a coverage for life. 
ElderShield premiums are based on the age at which the insured  joins the 
scheme and  are payable until the policy anniversary after his 65th birthday.    
 
7.14 To learn more about ElderShield  premiums, please visit this website:  
https://www.cpf.gov.sg/member/healthcare -financing/eldershield/eldershield -
premiums . 
 
B5. When The Insured Is  Eligibl e to Claim  
 
7.15 One can apply to receive ElderShield pay-outs if he is  determined by an MOH -
accredited assessor to be unable to carry out three of the six activities of daily 
living (ADL) listed below:  
(a) Washing – The ability to wash in the bath or shower (including getting into 
and out of the bath or shower) or wash by other means.  
(b) Dressing – The ability to put on, take off, secure, and unfasten all garments 
and, as appropriate, any braces, artificial limbs, or other surgical or 
medical appliances.  
(c) Feeding – The ability to feed oneself food after it has been prepared and 
made available.  
(d) Toileting – The ability to use the toilet or manage bowel and bladder 
function using  protective undergarments, such as diapers or surgical 
appliances, if appropriate.  
(e) Mobility – The ability to move indoors from room to room on level 
surfaces.  
(f) Transferring – The ability to move from a bed to an upright chair or 
wheelchair, and vice versa.


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Health Insurance   
98 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] B6. Making A Claim  
 
7.16 To make a claim, one should complete the claim assessment. First, the insured  
needs to arrange for a d isability assessment which can be conducted by any 
MOH -accredited severe disability assessor. For a list of assessors, please visit 
this link:  
https://www.aic.sg/financial -assistance/Documents/ApplicationForms/IDAPE 
Assessor List.pdf  
 
7.17 The assessment costs $100 for a clinic assessment and $250 for a house call, 
both of which are payable to the assessor at the time of assessment. The full 
fee will b e reimbursed if the insured is  assessed to be severely disabled and will 
be reimbursed with the first pay out . 
 
7.18 Next, the insured needs to log in to AIC’s e -Service portal (eFASS) with his 
Singpass to submit a claim.  The insured can access the link: AIC eFinance  to 
learn more about s ubmitting a claim .  
 
 
8. CARESHIELD LIFE2 
 
8.1 An enhanced version of ElderShield – known as CareShield Life was launched 
on 1 October 2020. CareShield  Life is a long -term care insurance scheme that  
support s the basic long -term care needs of Singaporeans with severe disability.  
 
8.2 CareShield is compulsory for all Singaporeans born in 1980 or later. Those born 
1980 to 1989 w ere automatically enrolled in 20 20 at one go, while those born 
1990 onwards will be automatically enrolled under the scheme upon turning 30. 
Those with pre -existing disability and illnesses will still be covered under 
CareShield Life.  
 
8.3 For a person born  in 1979 or earlier:  
(a) His current ElderShield plans will continue to protect him. 
(b) He could  choose to join CareShield Life when the scheme was launched in 
2021 i f he was not severely disabled  (defined as the inability to perform at 
least three  out of six ADLs) . 
(c) He can enjoy partici pation incentives of up to $2,500, if he joins by end -
2023. The Merdeka and Pioneer Generation seniors will receive an 
additional $1,500.  
 
8.4 For a person born in 1980 or later:  
(a) Universal coverage – he will be covered even if he has pre-existing medical 
condi tions and/or disabilities.  
(b) If he was   born between 1980 and 1990, he would have  automatically join ed 
CareShield Life in 2020.  
(c) If he was  born after 1990, he will join CareShield Life when he turns 30.  
 
2 https://www.careshieldlife.gov.sg  


5. Long -Term Care Insurance  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                   99  
(d) Transitional subsidies were  available from 2020  onwards and these 
subsidies end in 2024 . 
 
8.5 The figure below shows an example of Adam, a  Singapore an who is enrolled 
into CareShield Life at 30 years old.  
 
 
Source: 
https://www.careshieldlife.gov.sg/content/dam/cshl/pdf/CareShield%20Life%20
Welcome%20Booklet.pdf  
 
8.6 CareShield Life provide s better protection and assurance in four ways:  
(a) Lifetime cash pay-outs for as long as the insured is  severely disabled  
(b) Pay-out start ing at $600  per month in 2020 and increases annually  until age 
67 or when a successful claim is made  
(c) Government subsidies  are given  to make premiums affordable  i.e. no one 
will lose coverage because of an inability to pay premiums  
(d) Premiums can be fully paid by MediSave  
 
8.7 In addition to CareShield Life, Singaporeans will benefit from two new schemes  
starting  in 2020 :  
(a) MediSave Care which was launched on 1 October 2020. Singaporeans  who 
are severely disabled  can make a cash withdrawal up to $200 per month 
from MediSave . 
(b) ElderFund which was launched on 31 January 2020. It serves as an 
assistance for lower -income Singaporeans who are severely disabled , 
where they can claim u p to $250 per month to help with long -term care 
needs.  


Health Insurance  
100 Copyright reserved by the Singapore College of Insurance Limited [Version 1.


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Health Insurance  
100 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] A. A Comparison Between CareShield Life And ElderShield
8.8 The table below shows how CareShield Life compares against ElderShield .
ElderShield300  ElderShield400  CareShield Life  
Pay-out Amount  $300  $400  Pay-outs start at 
$600  per month in 
2020 and increase 
over time  
Pay-out Duration  60 months  72 months  For entire duration 
of disability  
Government 
Subsidies and 
Incentives  None  Yes, depending on 
circumstances  
Payable by 
MediSave  Yes Yes Yes 
Pay-out Criteria  Unable to perform 3 or more of the 6 activities for daily 
living  
B. MEDISAVE CARE
8.9 MediSave  Care is a long -term care scheme which was launched on 1 October
2020. Under MediSave Care, Singapore Citizens and Permanent Residents aged
30 and above who are severely disabled will be able to make monthly cash
withdrawals from their own and/or their spo use’s MediSave for their long -term
care needs.
8.10 After setting aside a minimum amount to ensure adequacy for other medical 
expenses, severely disabled Singapore Citizens and Permanent Residents will be 
able to withdraw up to a total of $200/month from their  own and/or their spouse’s 
MediSave.  
8.11 The table below shows the MediSave balances and corresponding monthly 
withdrawal quant um. 
MediSave Balance  Monthly Withdrawal Quantum  
S20,000 and above  $200  
S15,000 and above $150  
$10,000 and above  S100  
$5,000 and above  $50 
Below $5,000  N.A. 
8.12 A Singaporean citizen or a Permanent Resident is eligible to withdraw under 
MediSave  Care if he or she is assessed by an MOH -accredited assessor to be 
unable to perform three or more of the six activities of daily living.  

16
LONG-TERM CARE INSURANCECHAPTER
05
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
What is Long-Term Care 
Insurance (LTC)?LTC Insurance is designed to meet the costs of care for a person who, because of 
an accident, illness, frailty or a combination of these, is physically unable to function 
independently. Instead, he must depend on others to help him to perform most 
basic Activities of Daily Living (ADLs). 
Benefits offered under 
Long-Term Care Insurance• “Service-based” policy pays a benefit when an insured incurs costs for a service 
covered under the policy (e.g. home care or nursing care) and satisfies the 
benefit trigger. This type of policy can pay benefits in two ways:
 »Expense incurred method where the insurer will reimburse the insured for 
the cost incurred in using one of the services covered under the policy, up 
to the covered amount. 
 »Indemnity method pays the covered amount, regardless of the actual cost 
of the services received. 
• “Disability-based” policy pays a benefit when an insured meets the benefit 
trigger, regardless of the service use. The benefit trigger may be based on 
limitations in ADLs and/or degree of cognitive impairment. This means that the 
benefits may be paid if the insured is diagnosed to be suffering from advanced 
dementia (including Alzheimer’s disease), or when the insured is assessed to be 
suffering significant limitations in ADLs, or where there is a deterioration or loss 
of intellectual capacity resulting in a significant reduction in mental and social 
functioning, and the need for continuous supervision.
Eligibility criteria for 
payment of Long-Term 
Care Insurance benefit• Meets The Definition Of Inability To Perform Activities Of Daily Living (ADLs) Or 
Advanced Dementia.
• Meets The Deferred Period Requirement.
• Does Not Cover Pre-existing Conditions.
“Activities of Daily Living 
(ADLs)” and how they are 
related to the benefit 
payment under Long-Term 
Care Insurance.One of the key criteria for paying the benefits in LTC policies is the insured’s inability 
to perform certain specific actions, which are essential, if an individual is to be able 
to live independently without support from others. These are known as “Activities of 
Daily Living” (ADLs).
Other benefits are 
available under Long-Term 
Care Insurance• Usually include a death benefit which is payable to the insured’s beneficiaries 
upon the death of the insured. However, the quantum is small.
• Hospital Room And Board Benefit.
• Surgical Procedure Benefit.
• Financial Assistance With Adaptation Benefit.
• Extended Care Benefit.


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However, the quantum is small.
• Hospital Room And Board Benefit.
• Surgical Procedure Benefit.
• Financial Assistance With Adaptation Benefit.
• Extended Care Benefit.
• Rehabilitation Benefit.Toileting Transferring MobilityFeeding Dressing Washing
Activities of Daily Living (ADLs)

17
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Maximum benefit sum 
payable• For LTC benefits, depending on the plan that the insured chooses, he may claim, 
for example, between S$300 and S$5,000 per month, as long as he is unable to 
perform the specified number of ADLs, and meets the other policy conditions. 
Some insurers may limit the maximum benefit sum payable.
• For policies packaged with hospital benefits, there is usually a maximum 
amount that can be claimed per day, subject to a maximum number of days per 
year of hospitalisation.
• For those with Surgical Benefits, the insured, again depending on the plan that 
he has purchased, can claim only a maximum amount per surgery.
Benefit payment term While most insureds prefer the policy benefits to be payable as long as they live, 
the premiums for such plans may be too expensive for them to buy. Some insurers 
allow customers to choose the benefit payment term. This means that the benefits 
will be payable for the chosen period (e.g. 12 years of benefits). The premiums 
payable for a shorter benefit payment term will be cheaper and more affordable. 
During the benefit payment period, premiums payable are waived.
ElderShield and CareShield 
LifeElderShield300 ElderShield400 CareShield Life
Pay-out amount $300 $400 Pay-outs start at 
$600 per month in 
2020 and increase 
over time
Pay-out duration 60 months 72 months For entire 
duration of 
disability
Government 
subsidies and 
incentivesNo Yes, depending on 
circumstances
Payable by 
MediSave?Yes
Pay-out criteria Unable to perform 3 or more of the 6 activities for daily 
living


6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               101  
      CHAPTER 6  
CRITICAL ILLNESS INSURANCE  
 
 
 
CHAPTER OUTLINE  
 
1. Introduction  
2. Critical Illness (CI) Insurance  
3. LIA Critical Illness Framework  
4. Benefits Offered under Critical Illness Insurance  
5. Variation of Illness Insurance  
6. Underwriting  
7. Factors To Consider In Determining Adequacy of Critical Illness Coverage  
8. Exclusions  
9. Termination of Cover  
10. Claims  
11. Group Critical Illness (CI) Insurance  Policy  
Appendix 6A – Standard Definitions for Severe Stage of 37 Critical Illnesses: Version 
2019  
Annex 1 - List of changes to the standard list of 37 critical illness under the Critical Illness 
Framework 2019  
 
LEARNING OUTCOMES  
 
After studying this chapter, you should be able to:  
▪ describe how a Critical Illness  Insurance  policy works  
▪ understand the Critical Illness Framework proposed by the  Life 
Insurance Association  
▪ know the eligibility criteria for payment of the Critical Illness Insurance benefit  
▪ state the features of Critical Illness Insurance  
▪ outline and differentiate the two types of Critical Illness covers  
▪ know the advantage s of severity -based Critical Illness covers  
▪ know  the latest market developments in Critical Illness Plans and understand the 
various coverage s 
▪ understand the factors to consider in determining the adequacy of Critical Illness 
Insurance coverage  
▪ list the common exclusions under a Critical Illness Insurance policy  and know the 
circumstances under which it will be terminated  
▪ list the documents that the insured has  to submit when making a claim and know the 
claim procedure s 
▪ know how a Group Critical Illness Insurance policy works  
 

Health Insurance   
102 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] Contents   
CHAPTER  OUTLINE  ................................ ................................ ................................ ..........  101 
LEARNING OUTCOMES  ................................ ................................ ................................ ... 101 
1. INTRODUCTION  ................................ ................................ ................................ ...... 104 
2. CRITICAL ILLNESS (CI) INSURANCE ................................ ................................ ...... 104 
3. LIA CRITICAL ILLNESS FRAMEWORK 2019 (“THE CI FRAMEWORK”)  ................  104 
A. The benefits to policyholders arising from the new definitions under the CI 
Framework 2019.  ................................ ................................ ..............................  107 
B. Coverage for Covid -19 ................................ ................................ .....................  108 
4.


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................................ ................................ ..............................  107 
B. Coverage for Covid -19 ................................ ................................ .....................  108 
4. BENEFITS OFFERED UNDER CRITICAL ILLNESS INSURANCE  ............................  108 
A. Eligibility Criteria For Payment Of Critica l Illness Benefit  ..............................  108 
B. Features Of CI Insurance  ................................ ................................ ..................  111 
C. Types Of CI Insurance Covers  ................................ ................................ .........  112 
C1. Acceleration Benefit Critical Illness (CI) Insurance Cover  .......................  112 
C2. Additional Benefit Critical Illness (CI) Insurance Cover  ...........................  114 
5. VARIATIONS OF CRITICAL ILLNESS INSURANCE  ................................ ................  117 
A. Severity -Based Critical Illness (CI) Insurance Plan (Early Pay CI)  ..................  117 
A1. The Advantages of Severi ty-Based Cover  ................................ ...............  118 
A2. Premium and Other Considerations  ................................ .........................  119 
B. Multiple Pay Critical Illness (CI) Insurance Plan  ................................ .............  119 
C.  Critical Illness Plans Covering Mental Illnesses ................................ ..............  120 
D. Insurance Covering Diabetes  ................................ ................................ ...........  120 
E. Combination of CI Cover ................................ ................................ ..................  120 
F.  Insurance Covering Pregnancy Complications  ................................ ...............  120 
6. UNDERWRITING  ................................ ................................ ................................ ..... 121 
A. Underwriting Requirements  ................................ ................................ ............  121 
B. Underwriting Considerations  ................................ ................................ ..........  121 
7. FACTORS TO CONSIDER IN DETERMINING ADEQUACY OF CRITICAL ILLNESS 
COVERAGE  ................................ ................................ ................................ .............  122 
A.  Life Insurance Association’s (LIA) Recommended Amount ...........................  122 
B.  Minimum Five Years Of Income, After Taking Into Account Debt .................  123 
C.  Recovery Expenses  ................................ ................................ ..........................  123 
D.  Providing For Dependents  ................................ ................................ ...............  123 
8.  EXCLUSIONS  ................................ ................................ ................................ ..........  124 
9.  TERMINATION OF COVER  ................................ ................................ ......................  124 
10. CLAIMS  ................................ ................................ ................................ ....................  125 
11. GROUP CRITICAL ILLNESS (CI) INSURANCE POLICY  ................................ ..........  125 


6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               103  
APPENDIX 6A  ................................ ................................ ................................ ...................  127 
ANNEX 1  …………………………………………………………………………………………… 138 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Health Insurance   
104 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] 1. INTRODUCTION  
 
1.1 The first Critical Illness Insurance was developed and launched  in 1983 in South 
Africa . The initial product was known as dread disease insurance, covering four 
primary health conditions: Cancer, Stroke, Heart Attack and Coronary Artery 
Bypass. Since then, the coverage has been widely accepted worldwide as 
people become more aware of the financial implication of serious medical 
conditions and the need  for protection in  the event of  an unforeseen diagnosis 
of the illness. Critical Illness Insurance has evolved over the last three decades. 
In this chapter, we will take a closer look at Critical Illness Insurance, including 
the recent development s of the product in the market.     
 
 
2. CRITICAL ILLNESS (CI) INSURANCE  
 
2.1 A Critical Illness (also known as Dread Disease) policy is an insurance product 
designed to provide a lump sum benefit to a policyholder in the event that the 
insured is diagnosed to be suffering from one of the critical illnesses or has 
undergone a surgic al procedure covered under the policy. Each critical illness 
or surgery covered by the policy is precisely defined in the policy, and the 
benefits will be paid only if he suffers a condition that meets the standard 
definition as specified in the policy.  
 
2.2 Critical -illness coverage is a hyper -specific benefit, meaning that a condition 
must be specified within the policy to be covered  
 
2.3 Benefits received from a Critical Illness policy can be used to finance  the cost of 
care and treatment, recuperation, medical aids, replacing any income loss or 
even funding a change in lifestyle.


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2.4 Critical Illness (CI) Insurance policy can be sold as a stand -alone policy 
(individual or group basis), or as an optional rider to a Whole Life, Endowment, 
Term Insurance or Investmen t-Linked Policy (ILP), to provide either an additional 
sum assured or the advanced payment of a portion, or the entire sum assured 
payable on death.  
 
 
3. LIA CRITICAL ILLNESS FRAMEWORK  2019 (“THE CI FRAMEWORK”)   
 
3.1 The CI Framework seeks to balance the interest s of both the consumers and the 
insurance companies  i.e. offering clear and consistent coverage on the core 
critical illness benefits will allow for easier product comparison by consumers 
as well as consistent outcome s in CI claim s. It seeks to reduce ambiguity of the 
same CI claim being paid by one insurer but rejected by another.  
 
3.2 The CI Framework was set up i n consultation with the Monetary Authority of 
Singapore . Member companies of L ife Insurance Association (LIA)  and G eneral 
Insurance Association (GIA)  undertake to comp ly with the framework which 
governs the provision of CI coverage by insurers.  Under the CI framework, 
 
Dread 
Disease  

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               105  
severe Critical Illness definitions is standardised for 37 medical conditions by  
way of common definitions.  
 
3.3 Since 2003, the industry has standardised definitions for a list of 37 severe 
critical illnesses for insurers to adopt to provide consistency for policyholders.  
Subsequent  review s were  done in 2014 and 2019 to update  the standard  
definitions having considered  advancements in medical technology , health 
trends,  diagnosis  as well as the experiences gathered by the industry to address 
any issues that aro se due to lack of clarity on the definition s.  
 
3.4 In the 2014 review, the previous maximum limit of 30 medical conditions per CI 
plan was abolished.  Insurers could then  offer  any number of medical conditions 
under a CI plan including  single -illness CI plans. For each insured medical 
condition, subject to th e adoption of the common definitions, there were  no 
restrictions on how many stages and what the stages of illness progression to 
be covered by the insurers. Definitions for additional critical illnesses not 
covered by the 37 standardised definitions were to be  set by the individual 
insurers.  
 
3.5 In the latest review of 2019 , the standardised definitions were updated  to 
enhance clarity.  Critical Illness insurance products c ould  incorporate  either 
Version 2014 or Version 2019 definitions . On and after 26 August 2020, CI 
products using Version 2014 definition s were  no longer sold in Singapore.  For 
Individual Policies, t he application of Version 2019 definitions w as to be based 
on the Proposal Signed Date.  For proposals that were  signed by 25 August 2020, 
insurers were to  ensure that the policies were  issued by 25 November 2020. This 
gave  insurers a grace period of three months to issue all such policies under 
Version 2 014 definitions.  Policyholders with existing Critical Illness policies 
were  not impacted by the new definitions.  
 
3.6 However, the above -mentioned  timelines have been affected by the COVID -19 
pandemic. On 29 June 2020, LIA issued a circular to members advising  them of 
an extension of Grace Period .  In view that COVID -19 has presented a practical 
difficulty for applications requiring medical  examinations, LIA members were 
advised that the grace period for transition to Version 2019 Definitions w ould  be 
extended from the original three months to six months, i.e. by 25 February 2021.  
 
3.7 Insurers that were  implementing Version 2019 Definitions before 26 August 
2020 could , if they wish,  align to the same cut -off date of 25 February 2021.  For 
proposals that had been  signed by 25 August 2020, insurers had to  ensure that 
the policies were  issued no later than 25 February 2021. This g ave insurers a 
grace period of six months to issue all such policies under Version 2014 
definitions.


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This g ave insurers a 
grace period of six months to issue all such policies under Version 2014 
definitions.  
 
3.8 In short, if the insured is purchasing critical illness insurance from 26 August 
2020 onwards, the updated set of definitions for the standard list of 37 critical 
illnesses would apply as per the Life Insurance Association (LIA) Critical Illness 
Framework 2019 outlined above.  

Health Insurance   
106 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] 3.9 In orde r for financial advisors to better advise their clients, they need to know 
the CI definitions well as well as be able to highlight to their clients regarding 
the definitions. Conditions are covered under the policy only if they meet the 
definitions.  
 
3.10 The l ist of changes to the standard list of 37 critical illness under the Critical 
Illness Framework 2019 are shown in Annex 1. 
 
3.11 Appendix 6A  shows the Standard Definitions for Severe Stage of 37 Critical 
Illnesses: Version 2019 extracted from the LIA Website at: www.lia.org.sg  
 
3.12 In addition, insurers must adopt a 90-day waiting period   for the severe stage of 
five CIs to minimise anti -selection risk . Waiting period refers to the period of 
time stated in the policy which must pass, before some or all of the insured’s 
Health Insurance coverage can begin. These five CI s are: 
(a) Major Cancer  
(b) Coronary Artery By -Pass Surgery  
(c) Heart Attack of Specified Severity  
(d) Angioplasty and Other Invasive Treatments for Coronary Artery  
(e) Other Serious Coronary Artery Disease  
 
3.13 Although each insurer is free to adopt its own wordings on  the waiting period 
clause, the waiting period  is to begin  from the date that cover commences, or 
date of  reinstatement  and t he “date of diagnosis” shall be used to apply to the 
waiting period. For conditions that pay a benefit on surgical procedure, this 
“date of diagnosis” is the  date of diagnosis of the medical cond ition  that leads 
to the surgical procedure  but not to the date of surgical procedure  itself . 
 
3.14 The following are within the scope of the CI Framework : 
(a) New individual policies or benefits  
(b) New group policies or renewals, including any new CI cover during the 
policy year  
(c) CI benefits issued as a standalone policy or a rider  
(d) CI benefits issued on an individual basis or a group basis  
(e) CI benefits issued as a rider to an H&S policy or a PA policy   
(f) For cases of top -up to existing CI policies, insurers are given the discretion 
to decide to either apply the existing definitions to the top -up amount or 
apply the prevailing current definitio ns to the top -up amount. Where it is 
the latter, it is for the insurer to decide on the date of implementation of 
such a practice. Further, the insurer should disclose this practice to the 
policyholder in order to avoid any misunderstanding or difficulties  in the 
future.  
(g) Where an existing individual CI term policy (yearly renewable type) is auto -
renewed or has to be cancelled and re -issued due to administrative 

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               107  
reasons, for example: change of payment mode or credit cards, the same 
approach applies as under (f) above.    
(h) Where an existing CI benefit attached to a health policy (including 
Integrated Shield Plan) is auto -renewed, the same approach applies as 
under ( f) above.   
 
3.15 The following are out of scope of the CI Framework:  
(a) CI products for Male or Female o r Children which do not cover any of the 
CI conditions in its entire scope. Example, a Female CI product which 
covers only Female Organs Cancer does not need to apply the Major 
Cancer definition.  
(b) Terminal Illness issued under the general benefits of a bas ic plan.  
 
3.16 However, the above does not preclude insurers from customising their products 
by extending coverage for more medical conditions and stages of illness 
progression, beyond the standard list of 37 critical illnesses. Therefore, 
policyholders need to  fully understand the benefits of any critical illness 
insurance they are purchasing.  
 
3.17 For example, some plans offer coverage for 187 conditions that go beyond 
critical illnesses, including 150 multi -stage critical illnesses.


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3.17 For example, some plans offer coverage for 187 conditions that go beyond 
critical illnesses, including 150 multi -stage critical illnesses.  
 
A. The benefits to policyholders  arising from the new definitions under the CI 
Framework 2019.  
 
3.18 While the main objective of the changes made was to enhance the clarity of the 
definitions of coverage in respect of severe stages of CI, there are additional 
benefits for policyholders as detailed below:  
 
3.19 Previously,  those who suffer from Thalassaemia or Haemophillia  could not 
claim under “HIV Due to Blood Transfusion and Occupationally Acquired HIV”. 
This group can claim under this category now.  
 
3.20 The legal definition of blindness of 6/60 has been adopted for “Blindness 
(Irreversible Lost of Sight)” condition as compa red to the previous definition of  
3/60.The latest critical illness definitions offer both pros and cons for 
policyholders. Policyholders and consumers should be advised to check with 
their insurer on coverage options available to them. Financial advisors should 
advise their clients on how much coverage they need before purchasing critical 
illness insurance. The policyholders can look to LIA’s  2017 Protection Gap Study 
– Singapore1 as a guide, which recommends having enough coverage to last for 
an assumed critical illness recovery period of five years. Certain insurers also 
avail to their policyholders critical illness calculators  so that they can work out 
how much critical illness coverage they need today.  
 
 
1 https://www.lia.org.sg/media/1332/protection -gap-study -report -2017.pdf  


Health Insurance   
108 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] B. Coverage for Covid -19  
 
3.21 In Singapore, COVID -19 is not one of the critical illnesses under the insurers’ list 
of critical illness conditions.  
 
3.22 However, for any consequential complication arising after the diagnosis of 
COVID -19 leading to a critical illness, such as End Stage Lung Disease, the 
critical il lness benefit covered under these plans will apply.  
 
 
4. BENEFITS OFFERED UNDER CRITICAL ILLNESS INSURANCE  
 
A. Eligibility Criteria For Payment Of Critical Illness Benefit  
 
4.1 The common eligibility criteria are highlighted below : 
(a) The policy must be in force.  
 
(b) The life insured has not reached the expiry age of the CI Insurance cover  (if 
applicable) . 
 
(c) Critical Illness Must Be One That Is Covered . 
The critical illness suffered must be one of the diseases as specified in the 
policy contract , and it must be the first incidence of it for the life insured. 
This means that  if the critical illness is a pre -existing illness or is excluded 
from the policy, it will not be covered.  
 
(d) Meets The Definition  Of Critical Illness . 
(i) The definitions of the various critical illnesses as specified in the policy 
forms an extremely important part of the policy, as they will determine 
whether a claim is payable. For a severe Critical illness that is under the 
list of 37 conditions in the LI A CI framework, the definition shall follow 
the industry standard. For any i llness not found in the list , it shall follow 
the respective definition which the insurer has adopted. It is important 
that you take some time to explain to your prospective client , and 
ensure that your prospective client understands that the benefits will be 
paid only if the illness  qualifies and meets the definition as specified in 
the policy.  
(ii) Let us look at one of the severe CI definitions (based on LIA CI 
Framework 2019), to illustrate  how you should explain the “meeting the 
definition ” criteria  to your prospective clients . 
 
“Major Cancer ” 
A malignant tumour positively diagnosed with histological confirmation 
and characterised by the uncontrolled growth of malignant cells with 
invasion and destruction of normal tissue.  
 


6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               109  
The term Major Cancer includes, but is not limited to, leukemia, 
lymphoma and sarcoma.  
 
Major Cancer diagnosed on the basis of finding tumour cells and/or 
tumour -associated molecules in blood, saliva, faeces, urine  or any other 
bodily fluid in the absence of further definitive and clinically verifiable 
evidence does not meet the above definition.


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For the above definition, the following are excluded:  
▪ All tumours which are histologically classified as any of the 
following:  
- Pre-malignant;  
- Non-invasive;  
- Carcinoma -in-situ (Tis) or Ta;  
- Having borderline malignancy;  
- Having any degree of malignant potential;  
- Having suspicious malignancy;  
- Neoplasm of uncertain or unknown behaviour; or  
- All grades of dysplasia, squamous intraepithelial lesions (HSIL 
and LSIL) and intra epithelial neoplasia;  
▪ Any non -melanoma skin carcinoma, skin confined primary 
cutaneous lymphoma and dermatofibrosarcoma protuberans 
unless there is evidence of metastases t o lymph nodes or beyond;  
▪ Malignant melanoma that has not caused invasion beyond the 
epidermis;  
▪ All Prostate cancers histologically described as T1N0M0 (TNM 
Classification) or below; or Prostate cancers of another equivalent 
or lesser classification;  
▪ All Th yroid cancers histologically classified as T1N0M0 (TNM 
Classification) or below;  
▪ All Neuroendocrine tumours histologically classified as T1N0M0 
(TNM Classification) or below;  
▪ All tumours of the Urinary Bladder histologically classified as 
T1N0M0 (TNM Class ification) or below;  
▪ All Gastro -Intestinal Stromal tumours histologically classified as 
Stage I or IA according to the latest edition of the AJCC Cancer 
Staging Manual, or below;  
▪ Chronic Lymphocytic Leukaemia less than RAI Stage 3;  
▪ All bone marrow malignan cies which do not require recurrent 
blood transfusions, chemotherapy, targeted cancer therapies, bone 
marrow transplant, haematopoietic stem cell transplant or other 
major interventionist treatment; and  
▪ All tumours in the presence of HIV infection .” 

Health Insurance   
110 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] (iii) As can  be seen from the above specification, it does not mean that, so 
long as the life insured is diagnosed to be suffering from cancer, he can 
make a critical illness claim under his policy. Standard definitions allow 
consumers to compare the CI plans covering  the severe stage of 
medical conditions of different insurers. The scope of coverage is clear 
and consistent across the industry, giving consumers assurance and 
confidence. These standard definitions have been refined to clearly 
reflect the intent of cover age.  
(iv) As the definitions can be very technical, you may have difficulties 
explaining them to your prospective clients. In such a case, it is 
advisable that you approach your underwriter or claims manager, with 
the request for your company to provide you with ade quate training in 
this technical area.   
 
(e) Diagnosis Meets The Conditions Set Down By The Insurer . 
(i) The diagnosis of the critical illness must be made by registered medical 
practitioners. It excludes physicians who are themselve s the life 
insureds , their spouses and other lineal  relatives2 of theirs.  
(ii) The diagnosis must be supported by medical evidence , such as 
radiological,  clinical, histological or laboratory evidence acceptable to 
the insurer. In addition, some insurers require that the diagnosis must 
be supported by their own medical director who may base his opinion 
on the medical evidence submitted by the claimant and/or any 
additional evidence requested by him.  
(iii) If there is any dispute on the appropriateness or correctness of the 
diagn osis, the insurer has the right to call for a medical examination of 
the life insured , or the evidence used in arriving at such a diagnosis by 
an acknowledged independent expert in the field of medicine 
concerned , as selected by the insurer. The expert’s o pinion will be 
binding on both the insurer and the life insured.  
 
(f) Meets The Waiting Period Requirement . 
(i) The critical illness must be diagnosed after the waiting period. Waiting 
period for CI plans can be u p to 90 days  starting  from the date of issue , 
or the date of any reinstatement  of the policy. For example, a CI 
Insurance policy was issued on 1 January 2020. The life insured could  
make a claim under his policy , if he was diagnosed to be suffering from 
one of the critical ill nesses only on or after 1 April 2020.


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The life insured could  
make a claim under his policy , if he was diagnosed to be suffering from 
one of the critical ill nesses only on or after 1 April 2020.  
(ii) The waiting period is imposed to prevent consumers from buying the 
policy only when they suspect that there is something wrong with their 
health; a practice known as anti -selection. If a person is found to be 
sufferin g from any of the critical illnesses before or during the waiting 
period, the insurer will void the policy and refund the premiums  paid.  
 
 
2 Lineal relatives refer to people who are descendants from the same ancestor.  

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               111  
(g) Meets The Survival Period Requirement . 
(i) The life insured must survive a period before the critical illness benefit 
becomes payable. This survival period is the period of time ( which  
typically  range from 7 to 30 days ) starting from the date of occurrence 
of a critical illness.  Note that this survival period is applicable only to 
the Additional Benefit type of Critical Illness cover.   
 
(ii) In a nutshell,  
 
The benefits under a CI Insurance policy are payable ONLY if the:  
▪ policy is in force;  
▪ life insured has not reached the expiry age of the CI Insurance cover ; 
▪ critical illness which the life insured is suffering from is one that is covered 
under the policy  and meets the condition s as specified  in the policy ; 
▪ critical illness is not a pre -existing illness;  
▪ critical illness contracted meet s the definition of the particular critical 
illness as specified in the policy;  
▪ critical illness is diagnosed to have commenced after the waiting period;  
and 
▪ life insured survives the surviv al period if there is one imposed on the 
policy . 
 
B. Features Of CI Insurance  
 
4.2 Although there are two types of CI Insurance covers, each  of them  share s 
common features  as described below : 
(a) It pays a lump sum amount upon diagnosis of an insured critical illness .  
(b) Generally, one critical illness claim is allowed  unless it is a  Multi ple Pay CI 
Insurance  plan. 
(c) It has a specific waiting period  (usually ranging from 30 to 90 days) .  
(d) Some insurers may impose a limit on the total amount  of sum assured  (e.g. 
S$2,000,000 ) that a policy owner  can buy . This is to minimise the risk of 
moral hazard . 
(e) The premium is usually level and non -guaranteed . 
(f) The premium is  usually not fixed and is based on the age band basis (e.g. 
age of 35 to 39  years  is one rate, age of 40 to 44 years is another rate) for 
policies that are renewable on a yearly basis . 
(g) There is no restriction on how the CI Insurance benefit payable is to be used . 
(h) It can be packaged or attached to a n ILP, Term, Endowment  or Whole Life 
Insurance policy . 
(i) It can be issued on a stand -alone basis (such a policy pays the benefit  only 
upon diagnosis of one of the covered critical illnesses. It does not pay upon 
the life insured’s death or  total and permanent disability ). 
(j) It can be attached as a supplementary benefit to a basic policy . 
(k) The CI Insurance rider do es not acquire any cash value . 

Health Insurance   
112 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] (l) The CI Insurance rider is automatically terminated once the basic policy is 
surrendered or converted into an Extended Term Insurance policy . 
(m) The packaged CI Insurance policy which accumulate s cash value (e.g. Whole 
Life type of CI Insurance policy) also provide s non-forfeiture opti ons. 
However, the CI Insurance cover may be terminated once the policy owner  
exercises any of the non -forfeiture options (excluding the paid -up option) . 
(n) A stand -alone Term CI Insurance policy does not acquire cash value . Hence, 
it does not have any non-forfeiture option . 
(o) It provides 24  hours a day , worldwide coverage , unless otherwise endorsed 
or amended in the policy . 
(p) Assignment of the policy may or may not be allowed . 
(q) There is a maximum (e.g. age of 60 years ) and minimum  (e.g. age of one  
year) entry age restriction . For young lives, it may be subject to lien3. 
(r) There is a minimum (e.g.


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age of 60 years ) and minimum  (e.g. age of one  
year) entry age restriction . For young lives, it may be subject to lien3. 
(r) There is a minimum (e.g. S$10,000) and maximum (e.g. S$2,000,000 ) sum 
assured restriction .  
(s) The cover may expire at a maximum age (e.g. 75 years ) or a whole life cover 
may be provided.  
 
C. Types Of CI Insurance Covers   
 
4.3 There are two  main types of CI Insurance covers offered in the insurance market. 
They either provide an:  
▪ Acceleration Benefit; or  
▪ Additional Benefit.  
 
4.4 Some insurers have also introduced Severity -Based and Multiple Pay CI 
Insurance plans. Let us look at how each of them works.  
 
C1. Acceleration Benefit Critical Illness ( CI) Insurance Cover  
 
4.5 This type of CI Insurance cover can be issued as a packaged policy or rider. As 
the name implies, this type of cover provides for the pre -payment of a portion 
(e.g. 50%) or the full sum assured (i.e. 100%) of the basic policy to which it is 
packaged or attached. For ex ample, if a n individual buys a S$200,000 Whole Life 
type of CI Insurance policy with 50% acceleration, in the event that he is 
diagnosed to be suffering from one of the critical illnesses covered under his 
policy, the insurer will pay him S$100,000 (i.e. 5 0% x S$200,000) plus bonuses 
(if any). The balance of the sum assured plus bonuses (if any) will be paid , when 
he dies or suffers a Total and Permanent Disability (TPD). In the latter case, the 
payment may be paid in yearly instalments  or in one lump sum . On the other 
 
3 A lien is a feature which restricts the sum assured payable on the happening of the insured event. Most  
insurers impose the lien on policies taken on children’s lives for a specified number of years, e.g. three 
years. In such a case, if the insured child dies within the 1st year after the inception of the policy, the insurer 
will pay only 25% of the sum  assured. This percentage increases on the 2nd and 3rd year to 50% and 75%, 
respectively. From the 4th year onwards, the full sum assured will be paid, whenever the insured event 
happens.    


6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               113  
hand, if he dies or suffers a TPD without contracting any critical illness, the full 
S$200,000 plus bonuses (if any) will be paid to him. Figure 6.1  illustrates how 
this policy  works . 
 
Figure 6.1: Illustration Of The Working Of A S$200,000 Whole Life Type Of 
Critical Illness (CI) Insurance Policy With 50% Acceleration  
 
 
 
 
 
 
               
                                                                                   Critical Illness  
 
                     Death /TPD*  
 
 
 
 
 
 
 
 
 
 
 
 
4.6 As you can see from Figure 6.1 , the insured can make a critical illness claim only 
once4. If he contract s another critical illness, the policy will not pay him the 
remaining sum assured. The amount of benefit that he will get from this policy 
is always equal to the sum assured plus bonuses (if any). As the sum assured 
reduce s, the future premiums  may be reduc ed in the same proportion.  
 
4.7 If the person has chosen a 100% (instead of 50%) Acceleration Benefit in the 
above example, the full basic sum assured plus bonuses (if any) will be paid , 
regardless of whether he contracts a critical illness, dies or suffers a  TPD. 
 
4.8 Some insurers allow the policy owner  the flexibility of specifying the percentage 
of acceleration that he wants. Others give a number of options for the policy 
owner  to choose  from , e.g. 50%, 75% or 100%. For policy owners  who opt for 
less than 100% acceleration, you should advise them to attach a CI Waiver of 
Premium rider to it , so that the future premiums on the balance sum assured 
will be waived . This is to ensure that the policy owner  need not worry about not 
being able to service the premium for the remaining sum assured  during the 
policy term.


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This is to ensure that the policy owner  need not worry about not 
being able to service the premium for the remaining sum assured  during the 
policy term.  
 
4 Although rare, there are now certain CI Insurance policies in t he insurance market allowing for more than 
one critical illness claim.  
 
 
Payment of  
S$200,000  
 
 
Payment of 
S$100,000  
Payment  of 
S$100,000  
    Death/TPD * 
S$200,000 Whole 
Life type of 
Critical Illness 
Insurance policy 
with 50% 
Acceleration 
benefit  
*Note:  TPD is payable in instalments  or a 
lump  sum. 

Health Insurance   
114 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] 4.9 The cover for this type of CI Insurance policy may be up to  the age of 100 years , 
or for life , depending on the type of Life Insurance policy to which it is attached 
or packaged. This means to say that, if it is packaged  or attached to an ILP or 
Endowment Insurance policy, then it will follow the same terms of these basic 
policies. On the other hand, if it is a Whole Life Insurance policy to which it is 
attached or packaged, then the cover is usually up to the age of 100 years , so 
long as the policy owner  keeps the policy in force.  
 
4.10 Another factor that affects the tenor of the CI Insurance cover is whether the  
attached  policy  will acquire a cash value. When  attached to a Term Insurance 
policy which does not acquire a cash value, the cover will terminate if the  Term 
Insurance ends.  On the other hand, if the CI Insurance cover is attached to a n 
Endowment Insurance or a Whole Lif e Insurance policy , it will acquire a cash 
value . Once such  a policy has acquired a cash value, the insurer can make use 
of the automatic premium loan feature to keep the policy in force should the 
policy owner default in his premium payment  after the grace period is over . 
Alternatively, the policy  owner can exercise  the paid -up option , in which case , 
the life insured  will still enjoy the CI Insurance cover , but only for a reduced 
amount.  
 
4.11 In a nutshell, an Acceleration Benefit CI Insurance policy  or rider provides a life 
insured with the following coverage , depending on whichever event happens 
first:  
 
C2. Additional Benefit Critical Illness (CI) Insurance Cover  
 
4.12 This type of cover is available on a stand -alone basis or as a rider.  
▪ On a stand -alone basis, the sum assured will be paid upon the diagnosis of a 
covered critical illness , and the policy will be terminated.  
▪ As a rider, it pays an amount in addition to the sum assured of the basic policy 
to which it is attached. For example, if a person purchases a S$100,000 Whole 
Life Insurance policy with a S$200,000 Additional Benefit CI Insurance rider, 
the insurer will pay him S$200,000 if he contracts one of the critical illnesses 
covered by his policy. The Whole Life Insurance sum assured of S$100,000 
will be paid  only upon his death or  TPD. Figure 6.2  illustrates the working of 
this type of CI Insurance rider.  
Acceleration Benefit Critical Illness  
(CI) Coverage  
Lump sum payment of 
basic sum assured plus 
bonuses (if any) upon 
diagnosis of any 
insured illnesse s &/or 
waiver of future 
premium  
Lump sum 
payment of 
basic sum 
assured plus 
bonuses (if any) 
upon death  
 
Payment of the basic 
sum assured plus 
bonuses (if any) in 
instalments upon TPD  
 
OR 
 OR 

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               115  
Figure 6.2: Illustration Of The Working Of A S$100,000 Whole Life Policy With 
A S$200,000 Additional Benefit Critical Illness ( CI) Insurance Rider  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.13 Note from Figure 6.2 , the payment of the CI Insurance benefit does not affect that 
of the basic sum assured. This means that, if he contracts a critical illness followed 
by death, the total amount that the insurer will pay under this policy will be 
S$300,000.


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This means that, if he contracts a critical illness followed 
by death, the total amount that the insurer will pay under this policy will be 
S$300,000. However, if he d oes not contract any critical illness, then the amount 
that the insurer needs to pay is only S$100,000  upon death  or TPD.   
 
4.14 Note that the term of this type of CI Insurance rider can be shorter , but not longer 
than that of the basic policy. Usually, this rider expires when the life insured 
reaches a specified age (usually the age of 65 years ). The sum assured, on the 
other hand, can be higher than the sum assured of the basic policy, e.g. up to f ive 
times that of the basic sum assured.  
 
4.15 Another point that you need to take note of is that , whenever you are proposing 
this type of CI Insurance cover to your client, you should also advise him to attach 
a CI Waiver of Premium rider , so that he need not worry about the premium 
payment for the basic polic y to which the CI Insurance rider is attached.  
 
4.16 Table 6.1  gives a summary of the differences between the Acceleration and 
Additional Benefit types of CI Insurance covers.   
*Note:  TPD is payable in instalments or a lump 
sum.  
 
 
 
    Death/TPD * 
    Death/TPD * 
   Critical Illness  
Whole Life 
Insurance policy = 
S$100,000  
CI Insurance rider 
= S$200,000  
 
Payment o f 
S$100,000  Payment of  
S$100,000   
Payment of  
S$200,000  

Health Insurance   
116 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] Table 6.1: Summary Of Comparison Of Acceleration & Additional Benefit Types Of 
Critical Illness ( CI) Insurance Covers  
 
Acceleration Benefit  Additional Benefit  
(Packaged Policy Or Rider)  Stand -alone Policy  Rider  
It must be packaged or 
attached to a basic policy, 
i.e. ILP, Term, Endowment or 
Whole Life  Insurance  policy.  It need not be attached to 
any basic policy.  It must be attached to a 
basic policy.  
On diagnosis of a critical 
illness, a percentage of the 
basic sum assured as 
specified in the policy will be 
paid.  On diagnosis of a critical 
illness, the full sum assured 
of the policy will be paid.  On diagnosis of a critical 
illness, the full sum 
assured of the rider will 
be paid.  
Payment of a CI Insurance 
claim wil l cause the policy to 
be terminated if it is a 100% 
Acceleration type of policy or 
rider.  
 Payment of a CI Insurance 
claim will cause the policy 
to be terminated.  Payment of a CI 
Insurance claim will not 
affect the basic policy  
which will continue to 
be in  force .  
Total amount paid under the 
policy is equal to the basic 
sum assured plus bonuses (if 
any).  
 Total amount paid under 
the policy is equal to the 
basic sum assured.  Total amount paid under 
the policy is equal to the 
sum assured of the CI 
Insurance rider , plus the 
sum assured of the basic 
policy , plus any bonuses 
payable under the basic 
policy, in the event of a 
person who contracts a 
critical illness dies , or 
becomes totally disabled 
subsequently.  
CI Insurance rider sum 
assured must not exceed 
that of the basic policy.  
 Not applicable.  Sum assured can be up 
to a certain number of 
times of the basic sum 
assured , subject to the 
insurer’s  specified 
guidelines.  
CI Insura nce rider term 
usually follows that of the 
basic p olicy .  
 Not applicable.  The term must not 
exceed that of the basic 
policy and usually 
expires , when the life 
insured reaches a 
specified age.  
 
 
 

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               117  
5. VARIATION S OF CRITICAL  ILLNESS INSURANCE  
 
5.1 It is important to note that  under  a regular Critical Illness plan , even if one is  
diagnosed with an illness covered by the policy , it does not mean that the policy  
automatically pays the claim . An insured would have to diagnosed with an 
illness that has reached a certain stage before the policy pays the claim.  
 
5.2 For critical illness coverage, there are different products offered in the market .


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An insured would have to diagnosed with an 
illness that has reached a certain stage before the policy pays the claim.  
 
5.2 For critical illness coverage, there are different products offered in the market . 
The coverage offered by such critical illness insurance products vary with the 
coverage, number of critical illnesses, types of critical illnesses and/or stages of 
critical illnesses covered . The stages can be classified as early, intermediate or 
severe . 
 
5.3 Traditiona l CI policies would cover only severe ( end) stage  critical illnesses . In 
other words , the insured ha d to wait until the condition was severe enough to 
claim for pay-outs. For instance, the insured  would receive the pay-out if he got 
diagnosed for stage 4 colon  cancer, but not for stage 0 or 1. Newer types of CI 
covers such as Severity -Based Critical Illness plans , offer a pay-out when the 
insured  gets diagnosed during the early or intermediate stages of a  critical  
illness. Medical and technological advancements have now made it possible to 
detect critical illnesses  during the early stages.  Receiving the pay-out in the early 
stage of a CI is advantageous to the insured as the monies received can be used 
towards  earlier medical intervention and better treatment outcomes . The 
insured also stands to have a  financial pea ce of mind while undergoing 
treatments.5 
 
5.4 Financial adviser s advising on Critical Illness  (CI) coverage  should highlight  
/bring t o attention of their clients the following:  
▪ Type of Plan Purchased  
▪ Scope of Cover and Exclusions  
▪ Coverage of the CI -whether early, intermediate, end stage  
▪ Claim conditions, including if the client is holding on to several CI policies 
covering the same CI condition and whether all the policies pay out if the 
claims conditions are met.  
▪ Premium payments of the plan if it is a standalone or attached as a rider  
▪ Waiver of Premium Rider  
 
A. Severity -Based Critical Illness (CI) Insurance Plan (Early Pay CI)  
 
5.5 Insurers  have introduce d CI Insurance that pays in an earlier stage of the illness.  
Commonly known as Early Pay CI, t his type of severity -based CI Insurance plan 
pays claims during early stages and less severe critical illnesses.  Benefit s are 
claimable at various stages of the illness, from early to intermediate to severe . 
 
 
 
5 https://www.axa.com.sg/blog/insurance -guide/ultimate -guide -to-critical -illness -insurance -in-singapore  

Health Insurance   
118 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] 5.6 Depending on the stages and severity of the critical illness, the plan gives a 
percentage of the sum assured as a lump sum pay ment  to the policy owner . The 
progressive lump sum payment s, subject to a monetary cap of each severity 
level, amounts  to the total sum assured  which can be multiples of the original 
coverage.  
 
5.7 Waiting Period and Survival Period are  both  applicable  to Severity -based CI 
plans . 
 
5.8 Severity -based  CI plans  may appeal to those who are concerned about financial 
support for early treatment of the critical illness. It can be purchased as a term plan 
or attached as a rider to an existing Life Insurance policy , to enhance and 
complement the life insured ’s CI Insur ance coverage. The plan cover s any 
individual  person from the age of one up to 75  years . The premium is higher than 
that of the normal CI Insurance plan.  
 
A1. The Advantages of Severity -Based Cover6 
 
5.9 We can regard severity -based covers as a hybrid of the traditional critical illness 
cover.  
 
5.10 Unlike the traditional covers where the insured gets all or nothing (when insured 
is diagnosed with the covered CI, he gets 100% of the sum assured), severity -based 
critical illness insurance will pay a certain per centage based on how severe the 
illness is. The insured receives lower pay -outs when he is diagnosed with a less 
severe CI.  
 
5.11 The advantages of severity based critical illness insurance are:  
 
a) Greater number of  illnesses covered   
The insured is covered for a greater number of covered illnesses . Less severe 
forms of cancer  are covered. This would not be possible in a standard critical 
illness policy. For example , partial blindness  can be claimed under  a severity -
based cover . However , for traditional critical illness cover s, only totally 
blind ness can be claimed . It addresses the pitfall of a traditional CI policy  i.e.


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However , for traditional critical illness cover s, only totally 
blind ness can be claimed . It addresses the pitfall of a traditional CI policy  i.e. 
the insured may be severely ill but  he cannot get the pay -out as the illness is 
not a covered illness.  
 
b) Pay-outs received at an early stage of the illness   
This enables the insured to have the funds to prevent the illness from 
deteriorating. The insured stands to receive a sum earlier that can be used for 
treatment.  For example , if a polyp  is detected in one’s  colon  and is identified 
as an early -stage  cancer, one can  claim and have his colon  operated on.  
 
  
 
6 https://www.criticalillness.org.uk/critical -illness -vs-severity -based -cover.htm l 


6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               119  
c) The ability to claim more than once  
The insured can only claim once  under a traditional CI policy . The cover 
terminates once that claim is made. The severity -based  policy  allows the 
insured to claim for more than one illness  even for unrelated conditions.  
 
d) Continuity of coverage after a claim  
The CI cover will still continue a fter the insured has claim ed for a less severe 
critical illness . 
 
A2. Premium and Other Considerations  
 
5.12 An early pay CI plan is not cheap. For example, a 30 -year old  male who is a non -
smoker and who wants to be insured for $100,000 till the age of 65 can expect to 
pay about $100 per month. Do note that premiums charged vary with each insurer.  
 
5.13 Also, it is important to note while the severity -based policy allows the in sured to 
claim for more than one illness, any claims made will be deducted against the sum 
assured. Therefore, the insured cannot claim an infinite amount of times against 
his policy. This is especially so if the insured is unfortunate enough to be 
diagnos ed with multiple illnesses.  
 
B. Multiple Pay  Critical Illness (CI) Insurance Plan 
 
5.14 A multi -pay critical illness plan pays the insured multiple times over each 
diagnosis of critical illness and recurrent or reoccurring critical illnesses. An 
insured may get  a critical illness once. Some insureds may get critical illness 
again, and again. A normal critical illness plan would most likely terminate after 
paying the insured. It may not be viable for the insured to buy another critical 
plan as the costs would be very high. It would be also challenging as the insurer 
may be reluctant to offer cover as it considers the probability of a recurrence of 
the illness.  
 
5.15 This type of CI Insurance plan allows for more than one critical illness c laim on 
the policy. A second  claim  and subsequent  ones  are allowed if the medical 
condition deteriorate s or if a different medical condition occurs.  
 
5.16 Such m ultiple claim s are not restricted to only severe stage CI. When such CI 
plan includes benefits for severity -based CI, insurer s may allow for multi -claims 
on early stages  of the CI  subject to benefit limit s.  
 
5.17 Waiting Period and Survival Period are applicable  for such plans .  
 
5.18 Some insurers offer another boost of t he coverage for Relapse/ Recurring 
condition of Major Cancer after a 2 -year gap from the first Major Cancer claim.   
 
5.19 Future  premium s may be waived upon diagnosis of first claim on advanced stage  
CI.


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Health Insurance   
120 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] 5.20 It is critical therefore for financial advisors selling CI cover to advise their clients 
not only on the definitions of CI but also which stage of the CI is covered. Their 
clients need to know what is payable and what is not.  
 
C.  Critical Illness Plan s Covering Mental Illnesses   
 
5.21 The prevalen ce of mental illnesses  has created yet another opportunity for product 
innovation in provid ing coverage  for mental conditions, which has been  
traditionally excluded  by insurers. Insurance p lans that covers  mental illness 
typically pay a lump sum (which is usually a reduced coverage of the original CI) 
upon diagnosis of one of the covered mental illnesses . The illnesses covered are 
typically the following five conditions:   
(a) Major Depressive Disorders (MDD)  
(b) Schizophrenia  
(c) Bipolar Disorder  
(d) Obsessive Compulsive Disorder (OCD)  
(e) Tourette Syndrome  
 
5.22 Pay-out for Mental Illness cover s is limited  to a maximum benefit per life.  Waiting 
Period and Survival Period are applicable  for such covers .  
 
D. Insurance Covering Diabetes  
 
5.23 Being diagnosed with diabetes  and having  to adjust  to the new lifestyle can be a 
daunting experience. Insurers have designed coverage to help diabetic patients 
with the financial burden of treatment.  
 
5.24 Insurance covering d iabet es provides a lump sum on diagnosis  of the chronic 
illness, diabetes complication s or a dia betes -related critical illness.  Coverage may 
extend to limb amputation (s) resulting from diabetes -related complication s.  
 
5.25 Waiting  Period and Survival Period are applicable  for such covers .  
 
E. Combination of CI Cover  
 
5.26 It is now quite common to find insurers offering a combination of advance stage, 
severity -stage, multi -pay CI covers  with diabetes and mental illness cover ed in one 
CI Plan.  Note that there may be caps  imposed on  the coverage for each of the 
respective categories.    
 
F.  Insurance Covering Pregnancy Complications   
 
5.27 This is a term insurance , usually valid for three to six years,  covering both the 
mother and the baby  for pregnancy related complications and congenital illness . 
  
5.28 The plan provides a fixed lump sum benefit  in the event of pregnancy 
complications that may affect the mother or the diagnosis of congenital illness of 


6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               121  
the child.  Each insurer has its own list of conditions covered under pregnancy 
complications and congenital illness es.  
 
5.29 A hospital cash  benefit  may be  paid when the mother or child is hospitalised due 
to the covered complications.  Benefits  may also be extended to cover 
developmental delay  of the child or even  death  of the mother or the child.   
 
5.30 The plan may cover up to four (4)  babies in a single pregnancy . In return for a 
higher premium, s ome insurers may even  cover  if the pregnancy is through 
assisted reproduction such as In Vitro Fertilisation (IVF) .  
 
5.31 There is a minimum and maximum age applicable  for such cover s. Typically, an 
applicant has to be between the ages of 18 to 45 years and within 13 to 36 weeks 
of pregnancy at the time of application.  Coverage can be standalone or a rider to 
a life, an endowment or IPL policy.  
 
5.32 Note that this plan does not typically cover the usual cost s of giving birth where  
the mother and/or the child do not suffer any  complication s arising from the 
pregnancy or the birth . 
 
 
6. UNDERWRITING  
 
A. Underwriting Requirements  
 
6.1 The underwriting requirements are basically the same as those for Life Insurance 
policies, namely the  completion of a  proposal form (usually  the same as that for 
Life Insurance ) and the  insured undergoing  various medical tests . The only 
difference is that the non -medical limit  for CI covers  is lower. In other words, the 
life insured could be required to undergo medical tests for a sum assured whereas 
he would not be required to do so if he were to apply for a Life Insurance policy  
with the same sum assured .  
 
B. Underwriting Considerations  
 
6.2 The underwriting considerations  are similar to  those for Life Insurance policies and 
these will be discussed in greater detail in  later chapter of this Study Guide .


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B. Underwriting Considerations  
 
6.2 The underwriting considerations  are similar to  those for Life Insurance policies and 
these will be discussed in greater detail in  later chapter of this Study Guide .  
 
6.3 Usually, only standard  and sub -standard risks with up to a medium rating can be 
considered for CI Insurance. Risks with high extra mortality and those to be 
declined for Life Insurance are not regarded as acceptable for CI Insurance.  
 
6.4 Generally, the terms of acceptance are the same as those discussed in  later of this 
Study Guide , except that the insurer may specifically exclude the covered critical 
illnesses which the life insured is likely to contract in the future in view of his 
occupation , lifestyle, as well as medical and family history.  
 
 
 

Health Insurance   
122 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] 
7. FACTORS TO CONSIDER IN DETERMINING ADEQUACY OF CRITICAL ILLNESS 
COVERAGE 7  
 
7.1 Critical Illness (CI) insurance provides a pay out when the insured is diagnosed 
with a critical illness. Policyholders should check the policy documents to see the 
exact list of illnesses covered. It is important to bear in mind that not all CI policies 
cover the same range of illnesses.  
 
7.2 There are different ways in which the CI insurance policy pays out and they are 
largely based on the policy coverage.  
 
7.3 Most CI policies provide a lump sum payment when the insured is diagnosed with 
a critical illness. They usually pay only if the illness is at a severe stage (e.g. stage 
IV cancer). However, other CI polic ies do pay out at earlier stages of the disease. 
In addition, policies that provide multiple pay outs are more common nowadays. 
These multiple  pay out policies pay at different stages of the disease.  
 
7.4 Therefore, having a CI policy should not be the main ob jective but selecting the 
one that provides the right degree of financial support is the key. In determining 
the adequacy of CI coverage, there are five factors to consider:  
 
▪ Life Insurance Association’s (LIA) recommended amount  
▪ Minimum five years of inco me, after taking into account  debt  
▪ Recovery expenses  
▪ Providing for dependents  
 
A.  Life Insurance Association’s (LIA) Recommended Amount  
 
7.5 Each CI plan should be customised to fit the insured’s specific financial situation. 
It is best to avoid buying a generic plan that that does not fit one’s own unique 
circumstances.  
 
7.6 LIA recommends that the average Singaporean has CI coverage of around 
$316,000.  
 
7.7 However, LIA’s recommended sum should be viewed as a rough guideline rather 
than a goal. Each of us face different circumstances. For example, if the insured 
has dependents with special needs, or the insured has to provide for parents. In 
such circumstances, the amount of CI coverage would be higher.  
 
7.8 On the other hand, the insured’s children could be  independent. In this case, the 
CI coverage could be smaller as there is no need to provide for them.  
 
7.9 The insured is advised to seek the help of a qualified Financial Consultant  in 
selecting a CI plan that best fits his financial situation.  
  
 
7 ttps://www.axa.com.sg/blog/insurance -guide/critical -illness -coverage -for-singaporeans  

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               123  
B.  Minimum Five Years Of Income, After Taking Into Account Debt  
 
7.10 A rule of thumb is to have coverage of at least five years of the insured’s income. 
However, the age of the insured’s dependents has to be considered. If the 
insured’s children at a tender age, he would need more coverage.  
 
7.11 The CI policy should provide enough funds equivalent to at least five years of the 
insured’s income. This amount should be after considering all debts and other 
liabilities. The nett amount should be sufficient to support the insured’s way of 
living for five years. Other practitioners may even recommend a minimum of 
seven years, depending on the insured’s circumstances.  
 
7.12 One thing worth noting is that one cannot just rely on life insurance as it is a death 
benefit cover. A livi ng benefit cover as found in CI insurance is needed as the 
insured is still around during the extent of the critical illness.


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A livi ng benefit cover as found in CI insurance is needed as the 
insured is still around during the extent of the critical illness. Life insurance 
(without any additional riders) would pay out upon the insured’s death. Another 
challenge is that it is often diffi cult to achieve a very accurate  estimation of 
remaining lifespan. The insured could have months, or years, left.  
 
7.13 It is important not to just stick to the LIA recommended sum of $316,000 as a 
guideline. The minimum income approach serves to preserve the in sured’s family 
lifestyle. The LIA sum of $316,000, works out to be roughly $5,260 per month. This 
may not be adequate for some families. It also does not consider that the insured 
may want quality time with them.  
 
C.  Recovery Expenses  
 
7.14 Following the contraction of a critical illness, the insured would need to incur costs 
such as engaging a nurse, hiring domestic help etc. These added costs must be 
taken into consideration.  
 
7.15 Having a critical illness does not mean having no chances of recovery. With ac cess 
to the best medical care in such circumstances, the insured could recover in the 
early stages. Having an early -stage CI plan would be most useful in this regard. 
With certain early -stage CI plans, the insured can get pay outs for different stages 
of critical illness. Moreover, obtaining coverage for recurring critical illness is also 
possible. These types of plans can pay out up to 600 per cent of the Sum Assured.  
 
7.16 CI insurance complements the insured’s existing hospital and surgical insurance 
coverage. For example, the pay outs can be used to cover treatments that are 
usually excluded under hospital and surgical insurance.  
 
D.  Providing For Dependents  
 
7.17 As discussed, life insurance policies provide death benefits only. Living benefits 
are equa lly vital. When the insured is critically ill, he cannot work. He still needs to 
pay the bills. This is where CI insurance plays a vital role.  
 
 

Health Insurance   
124 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] 7.18 In view of the above, it is important to consider  the needs of the insured’s 
dependents. If his child is just 1 0 years old, for example, coverage should span 
eight years instead of five (this will last till the child is 18 where he or she could be 
expected to be more independent then).  
 
7.19 On the other hand, the insured’s dependents could be already financially 
indepe ndent. The insured may then be able to get by with less coverage. It is best 
for the insured to seek the advice of his Financial Consultant on such matters.  
 
7.20 CI insurance is not just about providing the funds and pay -outs. It is about the 
insured being abl e to spend time with his loved ones, at a crucial – and perhaps 
the final – stage in his life.  
 
 
8.  EXCLUSIONS  
 
8.1 The common exclusions seen in a CI Insurance policy are:  
(a) pre-existing illnesses;  
(b) self-inflicted injury or illness, while sane or insane;  
(c) wilful misuse of drugs and/or alcohol;  
(d) congenital anomalies or inherited disorders;  
(e) Acquired Immune Deficiency Syndrome (AIDS) or infection by any human 
immunodeficiency virus (HIV);  
(f) bodily injury sus tained as a result of travel in or on any type of aircraft , 
except as a fare -paying passenger or as a crew member of an international 
airline operating on a regularly scheduled passenger flight of a licensed 
commercial aircraft;  and 
(g) war or warlike operatio n, nuclear , strike, riot  and civil commotion  risks . 
 
8.2 If the life insured suffers from one of the critical illnesses covered under the CI 
Insurance policy as a result of  any of the above causes, the insurer is not 
required to pay the claim. Note that the exclusions vary from insurer to insurer . 
Hence, you should find out the precise exclusions imposed by your insurer and 
highlight them to your clients accordingly.  
 
 
9.


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Note that the exclusions vary from insurer to insurer . 
Hence, you should find out the precise exclusions imposed by your insurer and 
highlight them to your clients accordingly.  
 
 
9.  TERMINATION OF COVER  
 
9.1 The CI Insurance cover will terminate on the happening of any one of the 
following events:  
(a) a valid critical illness claim has been made  (usually the case , unless the 
policy contract states otherwise) ; 
(b) the maximum coverage allowed under the policy is paid out;  
(c) the basic Life Insurance policy to which it is attached or packaged matures 
or expires;  

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               125  
(d) the policy lapses owing to non -payment of premium s after the grace period ; 
(e) the policy is surrendered for its cash value or converted into an Extended 
Term Insurance policy;  
(f) the life insured dies; or  
(g) the life insured reaches the expiry age of the CI Insurance rider.  
 
10. CLAIMS  
 
10.1 In the event of a claim, the claimant  must submit the following supporting 
documents:  
(a) claimant ’s statement to be completed by the policy owner  and the life 
insured  if they are not the same person;  
(b) Attending Physician’s Report;  and 
(c) proof of the critical illness, such as  biopsy report, histology report , 
imaging/scan report, laboratory report,  and others as mentioned  earlier , or 
as requested by the insurer, furnished at the expense of the claimant.  
 
10.2 These are the basic requirements. However, t he insurer reserves the right to call 
for any other  relevant supporting  information and documents as it deems fit.  
 
10.3 Usually, the insurer will require:  
(a) written notice of the claim to be submitted within a specified pe riod (usually 
60 days) of the diagnosis of the critical illness or the performance of a 
surgery as covered under the policy;  
(b) submission of the claim  form within a specified period (e.g. 15 days) from 
the date that the insurer sent it out; and  
(c) all proof s of the critical illness must be submitted within a specified period 
(usually 60 days) from the date of diagnosis of the critical illness or surgery.  
 
10.4 As it can be seen, the sooner the policy owner or life insured  informs and 
submits all proof s of evidence to the insurer, the better it is for him.  
 
 
11. GROUP CRITICAL ILLNESS (CI) INSURANCE POLICY  
 
11.1 Group CI Insurance cover can be issued as a packaged policy or as a rider. The 
coverage of a Group CI Insurance cover is similar to that of the Individual CI 
Insurance cover , and it can be in the form of either the Acceleration or the 
Additional Benefit CI type of cover. However, there will always be an expiry age 
(e.g. 7 5 years ) specified in  the CI Insurance cover , regardless of whether it is an 
Acceleration or Additional Benefit type of CI Insurance cover.  
 
 
 
 


Health Insurance   
126 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] 11.2 In the earlier part of this chapter, we discussed the  Version 2019 definitions in 
respect of medical conditions at the “severe” stage. For Group Policies:  
(a) The application of Version 2019 definitions will be based on the CI Policy 
Effective Date. (This is unlike Individual Policies, where we earlier learnt that 
the application of Version 2019 definitions will be based on the Proposal 
Signed Date)   
(b) Any group policy that was newly effected  or renewed on or after 26 August 
2020 had to  carry the Version 2019 definitions.   
(c) Insurers could  adopt Version 2019 definitions before 26 August 2020.  

6.


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(c) Insurers could  adopt Version 2019 definitions before 26 August 2020.  

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               127  
APPENDIX 6A  
 
LIA CRITICAL ILLNESS (CI) FRAMEWORK 2019  
STANDARD DEFINITIONS FOR SEVERE STAGE OF 37 CRITICAL ILLNESSES:  
VERSION 2019  
 
Industry list of all 37 critical illnesses:  
 
1 Major Cancer  
2 Heart Attack of Specified Severity  
3 Stroke with Permanent Neurological Deficit  
4 Coronary Artery By -pass Surgery  
5 End Stage Kidney Failure  
6 Irreversible Aplastic Anaemia  
7 End Stage Lung Disease  
8 End Stage Liver Failure  
9 Coma  
10 Deafness (Irreversible Loss of Hearing)  
11 Open Chest Heart Valve Surgery  
12 Irreversible Loss of Speech  
13 Major Burns  
14 Major Organ / Bone Marrow Transplantation  
15 Multiple Sclerosis  
16 Muscular Dystrophy  
17 Idiopathic Parkinson’s Disease  
18 Open Chest Surgery to Aorta  
19 Alzheimer’s Disease / Severe Dementia  
20 Fulminant Hepatitis  
21 Motor Neurone Disease  
22 Primary Pulmonary Hypertension  
23 HIV Due to Blood Transfusion and Occupationally Acquired HIV  
24 Benign Brain Tumour  
25 Severe Encephalitis  
26 Severe Bacterial Meningitis  
27 Angioplasty & Other Invasive Treatment for Coronar y Artery  
28 Blindness (Irreversible Loss of Sight)  
29 Major Head Trauma  
30 Paralysis (Irreversible Loss of Use of Limbs)  
31 Terminal Illness  
32 Progressive Scleroderma  
33 Persistent Vegetative State (Apallic Syndrome)  
34 Systemic Lupus Erythematosus  with Lupus Nephritis  
35 Other Serious Coronary Artery Disease  
36 Poliomyelitis  
37 Loss of Independent Existence  
 
Source : LIA Website: LIA Critical Illness (CI) Framework 2019  
Standard Definitions For Severe Stage Of 37 Critical Illnesses: Version 2019  
 

Health Insurance   
128 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] 1 Major Cancer  
 
A malignant tumour positively diagnosed with histological confirmation and 
characterised by the uncontrolled growth of malignant cells with invasion and 
destruction of normal tissue.  
 
The term Major Cancer includes, but is not limited to, leukemia, lymphoma and  
sarcoma.  
 
Major Cancer diagnosed on the basis of finding tumour cells and/or tumour -
associated molecules in blood, saliva, faeces, urine or any other bodily fluid in the 
absence of further definitive and clinically verifiable evidence does not meet the above 
definition.


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For the above definition, the following are excluded:  
• All tumours which are histologically classified as any of the following:  
Pre-malignant;  
Non-invasive;  
Carcinoma -in-situ (Tis) or Ta; Having borderline malignancy;  
Having any degree of malignant potential; Having suspicious malignancy;  
Neoplasm of uncertain or unknown behaviour; or  
All grades of dysplasia, squamous intraepithelial lesions (HSIL and LSIL) and i ntra 
epithelial neoplasia;  
• Any non -melanoma skin carcinoma, skin confined primary cutaneous lymphoma 
and dermatofibrosarcoma protuberans unless there is evidence of metastases to 
lymph nodes or beyond;  
• Malignant melanoma that has not caused invasion be yond the epidermis;  
• All Prostate cancers histologically described as T1N0M0 (TNM Classification) or 
below; or Prostate cancers of another equivalent or lesser classification;  
• All Thyroid cancers histologically classified as T1N0M0 (TNM Classification) or 
below;  
• All Neuroendocrine tumours histologically classified as T1N0M0 (TNM 
Classification) or below;  
• All tumours of the Urinary Bladder histologically classified as T1N0M0 (TNM 
Classification) or below;  
• All Gastro -Intestinal Stromal tumours histologically classified as Stage I or IA 
according to the latest edition of the AJCC Cancer Staging Manual, or b elow;  
• Chronic Lymphocytic Leukaemia less than RAI Stage 3;  
• All bone marrow malignancies which do not require recurrent blood transfusions, 
chemotherapy, targeted cancer therapies, bone marrow transplant, 
haematopoietic stem cell transplant or other maj or interventionist treatment; and  
• All tumours in the presence of HIV infection.  
 
2 Heart Attack of Specified Severity  
 
Death of heart muscle due to ischaemia, that is evident by at least three of the 
following criteria proving the occurrence of a new hea rt attack:  
 
• History of typical chest pain;  
• New characteristic electrocardiographic changes; with the development of any of 
the following: ST elevation or depression, T wave inversion, pathological Q waves 
or left bundle branch block;  
• Elevation of the  cardiac biomarkers, inclusive of CKMB above the generally 
accepted normal laboratory levels or Cardiac Troponin T or I at 0.5ng/ml and 
above;  

6. Critical Illness Insurance  
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• Imaging evidence of new loss of viable myocardium or new regional wall motion 
abnormality. The imaging must be done by Cardiologist specified by the 
Company.  
 
For the above definition, the following are excluded:  
• Angina;  
• Heart attack of indeterminate age; and  
• A rise in cardiac biomarkers or Troponin T or I following an intra -arterial cardiac 
procedure includi ng, but not limited to, coronary angiography and coronary 
angioplasty.  
 
Explanatory note: 0.5ng/ml = 0.5ug/L = 500pg/ml  
 
3 Stroke with Permanent Neurological Deficit  
 
A cerebrovascular incident including infarction of brain tissue, cerebral and 
subarachnoid haemorrhage, intracerebral embolism and cerebral thrombosis 
resulting in permanent neurological deficit. This diagnosis must be supported by all 
of the following con ditions:  
 
• Evidence of permanent clinical neurological deficit confirmed by a neurologist at 
least 6 weeks after the event; and  
• Findings  on  Magnetic  Resonance  Imaging,  Computerised  Tomography,  or  
other  reliable imaging techniques consistent wit h the diagnosis of a new stroke.  
 
The following are excluded:  
• Transient Ischaemic Attacks;  
• Brain damage due to an accident or injury, infection, vasculitis, and inflammatory 
disease;  
• Vascular disease affecting the eye or optic nerve;  
• Ischaemic diso rders of the vestibular system; and  
• Secondary haemorrhage within a pre -existing cerebral lesion.  
 
4 Coronary Artery By -pass Surgery  
 
The actual undergoing of open -chest surgery or Minimally Invasive Direct Coronary 
Artery Bypass surgery to correct the na rrowing or blockage of one or more coronary 
arteries with bypass grafts.


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This diagnosis must be supported by angiographic 
evidence of significant coronary artery obstruction and the procedure must be 
considered medically necessary by a consultant cardiolog ist. 
 
Angioplasty and all other intra -arterial, catheter -based techniques, ‘keyhole’ or laser 
procedures are  excluded.  
 
5 End Stage Kidney Failure  
 
Chronic  irreversible  failure  of  both  kidneys  requiring  either  permanent  renal  
dialysis  or  kidney transplantation.  
 
6 Irreversible Aplastic Anaemia  
 
Chronic persistent and irreversible bone marrow failure, confirmed by biopsy, which 
results in anaemia, neutropenia and thrombocytopenia requiring treatment with at 
least one of the following:  
 

Health Insurance   
130 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] • Blood product transfusion;  
• Bone marrow stimulating agents;  
• Immunosuppressive agents; or  
• Bone marrow or haematopoietic stem cell transplantation.  
 
The diagnosis must be confirmed by a haematologist.  
 
7 End Stage Lung Disease  
 
End stage lung disease, cau sing chronic respiratory failure. This diagnosis must be 
supported by evidence of all of the following:  
 
• FEV1 test results which are consistently less than 1 litre;  
• Permanent supplementary oxygen therapy for hypoxemia;  
• Arterial blood gas analyses with partial oxygen pressures of 55mmHg or less 
(PaO2 ≤ 55mmHg);  
and 
• Dyspnea at rest.  
 
The diagnosis must be confirmed by a respiratory physician.  
 
8 End Stage Liver Failure  
 
End stage liver failure as evidenced by all of the following:  
 
• Perma nent jaundice;  
• Ascites; and  
• Hepatic encephalopathy.  
 
Liver disease secondary to alcohol or drug abuse is excluded.  
 
9 Coma  
 
A coma that persists for at least 96 hours. This diagnosis must be supported by 
evidence of all of the following:  
 
• No response to external stimuli for at least 96 hours;  
• Life support measures are necessary to sustain life; and  
• Brain damage resulting in permanent neurological deficit which must be assessed 
at least 30 days after the onset of the coma.  
 
For the above definition, medically induced coma and coma resulting directly from 
alcohol or drug abuse are excluded.  
 
10 Deafness (Irreversible Loss of Hearing)  
 
Total and irreversible loss of hearing in both ears as a result of illness or accident. This 
diagnosis must be supported by audiometric and sound -threshold tests provided and 
certified by an Ear, Nose, Throat (ENT) specialis t. 
 
Total means “the loss of at least 80 decibels in all frequencies of hearing”.  
  
Irreversible means “cannot be reasonably restored to at least 40 decibels by medical 
treatment, hearing aid and/or surgical procedures consistent with the current standard 

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               131  
of the medical services available in Singapore after a period of 6 months from the date 
of intervention.”  
 
11 Open Chest Heart Valve Surgery  
 
The actual undergoing of open -heart surgery to replace or repair heart valve 
abnormalities. The diagnosis of heart valve abnormality must be supported by cardiac 
catheterization or echocardiogram and the procedure must be considered medically 
necessary by a consultant cardiologist.  
 
12 Irreversible Loss of Speech  
 
Total and irreversible loss of the ability to spe ak as a result of injury or disease to the 
vocal cords. The inability to speak must be established for a continuous period of 12 
months. This diagnosis must be supported by medical evidence furnished by an Ear, 
Nose, Throat (ENT) specialist.  
 
All psychiatr ic related causes are excluded.  
 
13   Major Burns  
 
Third degree (full thickness of the skin) burns covering at least 20% of the surface of 
the Life Assured’s  body.  
 
14 Major Organ / Bone Marrow Transplantation  
 
The receipt of a transplant of:  
 
• Human bone marrow using haematopoietic stem cells preceded by total bone 
marrow ablation; or  
• One of the following human organs: heart, lung, liver, kidney, pancreas,  that 
resulted from irreversible end stage failure of the relevant organ.  
 
Other stem cell tra nsplants are excluded.


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Other stem cell tra nsplants are excluded.  
 
15 Multiple Sclerosis  
 
The definite diagnosis of Multiple Sclerosis, and must be supported by all of the 
following:  
 
• Investigations which unequivocally confirm the diagnosis to be Multiple 
Sclerosis; and  
• Multiple neurological de ficits which occurred over a continuous period of at least 
6 months. Other causes of neurological damage such as SLE and HIV are 
excluded.  
 
16 Muscular Dystrophy  
 
The unequivocal diagnosis of muscular dystrophy must be made by a consultant 
neurologist. The  condition must result in the inability of the Life Assured to perform 
(whether aided or unaided) at least 3 of the 6 “Activities of Daily Living” for a 
continuous period of at least 6 months.  
  
For the purpose of this definition, “aided” shall mean with t he aid of special 
equipment, device and/or  apparatus and not pertaining to human aid.  

Health Insurance   
132 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] 17    Idiopathic Parkinson’s Disease  
 
The unequivocal diagnosis of idiopathic Parkinson’s Disease by a consultant 
neurologist. This diagnosis  must be supported by all of the following conditions:  
 
•      The disease cannot be controlled with medication; and  
• Inability of the Life Assured to perform (whether aided or unaided) at least 3 of 
the 6 “Activities of Daily Living” for a continuous peri od of at least 6 months.  
 
For the purpose of this definition, “aided” shall mean with the aid of special 
equipment, device and/or  apparatus and not pertaining to human aid.  
 
18 Open Chest Surgery to Aorta  
 
The actual undergoing of major surgery to repair o r correct an aneurysm, narrowing, 
obstruction or dissection of the aorta through surgical opening of the chest or 
abdomen. For the purpose of this definition, aorta shall mean the thoracic and 
abdominal aorta but not its branches.  
 
Surgery performed using only minimally invasive or intra -arterial techniques are 
excluded.  
 
19 Alzheimer's Disease / Severe Dementia  
 
Deterioration or loss of cognitive function as confirmed by clinical evaluation and 
imaging tests, arising from Alzheimer's disease or irreversibl e organic disorders, 
resulting in significant reduction in mental and social functioning requiring the 
continuous supervision of the life assured. This diagnosis must be supported by the 
clinical confirmation of an appropriate consultant and supported by t he Company's 
appointed doctor.  
 
The following are excluded:  
• Non-organic diseases such as neurosis and psychiatric illnesses; and  
• Alcohol related brain damage.  
 
20 Fulminant Hepatitis  
 
A submassive  to massive necrosis of the liver by the Hepatitis virus, leading 
precipitously to liver failure. This diagnosis must be supported by all of the following:  
 
• Rapid decreasing of liver size as confirmed by abdominal ultrasound;  
• Necrosis involving entire lobules, leaving only a collapsed reticular framework;  
• Rapid deterioration of liver function tests;  
• Deepening jaundice; and  
• Hepatic encephalopathy.  
  
21 Motor Neurone Disease  
 
Motor neurone disease characterised by progressive degeneration of cortico spinal 
tracts and anterior horn cells or bulbar efferent neurones which include spinal 
muscular atrophy, progressive bulbar palsy, amyotrophic lateral sclerosis and 
primary lateral sclerosis. This diagnosis must be confirmed by a neurologist as 
progressive  and resulting in permanent neurological deficit.  
 
 

6. Critical Illness Insurance  
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22 Primary Pulmonary Hypertension  
 
Primary Pulmonary Hypertension with substantial right ventricular enlargement 
confirmed by investigations including cardiac catheterisation, resulting in permanent 
physical impairment of at least Class IV of the New York Heart Association (NYHA) 
Classification of Cardiac Impairment.  
 
The NYHA Classification of Cardiac Impairment:  
 
Class I:  No limitation of physical activity. Ordinary physical activity does not cause 
undue fatigue, dyspnea, or anginal pain.  
Class II:  Slight limitation of physical activity. Ordinary physical activity results in 
symptoms.  
Class III:  Marked limitation of physical activity. Comfortable at rest, but less than 
ordinary  activity causes symptoms.  
Class IV:  Unable to engage in any physical activity without discomfort. Symptoms 
may be  present even at rest.


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Comfortable at rest, but less than 
ordinary  activity causes symptoms.  
Class IV:  Unable to engage in any physical activity without discomfort. Symptoms 
may be  present even at rest.  
 
23 HIV Due to Blood Transfusion and Occupationally Acquired HIV  
 
A. Infection with the Human Immunodeficiency Virus (HIV) throug h a blood 
transfusion, provided that all of the following conditions are met:  
 
• The blood transfusion was medically necessary or given as part of a medical 
treatment;  
• The blood transfusion was received in Singapore after the Issue Date, Date of 
endorsem ent or Date of reinstatement of this Supplementary Contract, 
whichever is the later; and  
• The source of the infection is established to be from the Institution that 
provided the blood transfusion and the Institution is able to trace the origin of 
the HIV tainted blood.  
 
B. Infection with the Human Immunodeficiency Virus (HIV) which resulted from an 
accident occurring after the Issue Date, date of endorsement or date of 
reinstatement of this Supplementary Contract, whichever is the later whilst the 
Insured was carrying out th e normal professional duties of his or her occupation 
in Singapore, provided that all of the following are proven to the Company’s 
satisfaction:  
 
• Proof that the accident involved a definite source of the HIV infected fluids;  
• Proof of sero -conversion fr om HIV negative to HIV positive occurring during 
the 180 days after the documented accident. This proof must include a negative 
HIV antibody test conducted within 5 days of the accident; and  
• HIV infection resulting from any other means including sexual a ctivity and the 
use of intravenous drugs is excluded.  
 
This benefit is only payable when the occupation of the insured is a medical 
practitioner, housemen, medical student, state registered nurse, medical laboratory 
technician, dentist (surgeon and nurse) or paramedical worker, working in medical 
centre or clinic (in Singapore).  
  
This benefit will not apply under either section A or B where a cure has become 
available prior to the  infection. “Cure” means any treatment that renders the HIV 
inactive or non -infectious.  
 

Health Insurance   
134 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] 24 Benign Brain Tumor  
 
Benign brain tumour means a non -malignant tumour located in the cranial vault and 
limited to the brain, meninges or cranial nerves where all of the following conditions 
are met:  
 
• It has undergone surgical removal or, if  inoperable, has caused a permanent 
neurological deficit; and  
• Its presence must be confirmed by a neurologist or neurosurgeon and supported 
by findings on Magnetic Resonance Imaging, Computerised Tomography, or 
other reliable imaging techniques.  
 
The following are excluded:  
• Cysts;  
• Abscess;  
• Angioma;  
• Granulomas;  
• Vascular Malformations;  
• Haematomas; and  
• Tumours of the pituitary gland, spinal cord and skull base.  
 
25 Severe Encephalitis  
 
Severe inflammation of brain substance (cerebral hemisph ere, brainstem or 
cerebellum) and resulting in permanent neurological deficit which must be 
documented for at least 6 weeks. This diagnosis must be certified by a consultant 
neurologist, and supported by any confirmatory diagnostic tests.  
 
Encephalitis cau sed by HIV infection is excluded.  
 
26 Severe Bacterial Meningitis  
 
Bacterial infection resulting in severe inflammation of the membranes of the brain or 
spinal cord resulting in significant, irreversible and permanent neurological deficit. 
The neurological  deficit must persist for at least 6 weeks. This diagnosis must be 
confirmed by:  
 
• The presence of bacterial infection in cerebrospinal fluid by lumbar puncture; and  
• A consultant neurologist.  
 
Bacterial Meningitis in the presence of HIV infection is exc luded.  
 
27 Angioplasty & Other Invasive Treatment for Coronary Artery  
 
The actual undergoing of balloon angioplasty or similar intra -arterial catheter 
procedure to correct a narrowing of minimum 60% stenosis, of one or more major 
coronary arteries as shown by angiographic evidence. The revascularisation must be 
considered med ically necessary by a consultant cardiologist.  
 
Coronary arteries herein refer to left main stem, left anterior descending, circumflex 
and right coronary artery.


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The revascularisation must be 
considered med ically necessary by a consultant cardiologist.  
 
Coronary arteries herein refer to left main stem, left anterior descending, circumflex 
and right coronary artery.  
 
Payment under this condition is limited to 10% of the Sum Assured under this policy  
subject t o a S$25,000 maximum sum payable. This benefit is payable once only and 

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               135  
shall be deducted from the amount of this Contract, thereby reducing the amount of 
the Sum Assured which may be payable herein.  
 
Diagnostic angiography is excluded.  
 
28 Blindness (Irre versible Loss of Sight)  
 
Permanent and irreversible loss of sight in both eyes as a result of illness or accident 
to the extent that even when tested with the use of visual aids, vision is measured at 
6/60 or worse in both eyes using a Snellen eye chart or  equivalent test, or visual field 
of 20 degrees or less in both eyes. The blindness must be confirmed by an 
ophthalmologist.  
 
The blindness must not be correctable by surgical procedures, implants or any other 
means.  
 
29 Major Head Trauma  
 
Accidental head injury resulting in permanent neurological deficit to be assessed no 
sooner than 6 weeks from the date of the accident. This diagnosis must be confirmed 
by a consultant neurologist and supported by relevant findings on Magnetic 
Resonance Imaging, Computeri sed Tomography, or other reliable imaging 
techniques. "Accident” means an event of violent, unexpected, external, involuntary 
and visible nature which is independent of any other cause and is the sole cause of 
the head Injury.  
 
The following are excluded:  
• Spinal cord injury; and  
• Head injury due to any other causes.  
 
30 Paralysis (Irreversible Loss of Use of Limbs)  
 
Total and irreversible loss of use of at least 2 entire limbs due to injury or disease 
persisting for a period of at least 6 weeks  and with no foreseeable possibility of 
recovery. This condition must be confirmed by a consultant neurologist.  
 
Self-inflicted injuries are excluded.  
 
31 Terminal Illness  
 
The conclusive diagnosis of an illness that is expected to result in the death of t he Life 
Assured within 12 months. This diagnosis must be supported by a specialist and 
confirmed by the Company’s appointed doctor.  
 
Terminal illness in the presence of HIV infection is excluded.  
 
32 Progressive Scleroderma  
 
A systemic collagen -vascular di sease causing progressive diffuse fibrosis in the skin, 
blood vessels and visceral organs.  This diagnosis must be unequivocally confirmed 
by a consultant rheumatologist and  supported by biopsy or equivalent confirmatory 
test, and serological evidence, and  the disorder must have reached systemic 
proportions to involve the heart, lungs or kidneys.  
 
The following are excluded:  

Health Insurance   
136 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] • Localised scleroderma (linear scleroderma or morphea);  
• Eosinophilic fascitis; and  
• CREST syndrome.  
 
33 Persistent Vegetative State (Apallic Syndrome)  
 
Universal necrosis of the brain cortex with the brainstem intact. This diagnosis must 
be definitely confirmed by a consultant neurologist holding such an appointment at 
an approved hospital. This condition has to be med ically documented for at least one 
month.  
 
34 Systemic Lupus Erythematosus with Lupus Nephritis  
 
The unequivocal diagnosis of Systemic Lupus Erythematosus (SLE) based on 
recognised diagnostic criteria and supported with clinical and laboratory evidence. In  
respect of this contract, systemic lupus erythematosus will be restricted to those 
forms of systemic lupus erythematosus which involve the kidneys (Class III to Class 
VI Lupus Nephritis, established by renal biopsy, and in accordance with the RPS/ISN 
classification system). The final diagnosis must be confirmed by a certified doctor 
specialising in Rheumatology and Immunology.


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The final diagnosis must be confirmed by a certified doctor 
specialising in Rheumatology and Immunology.  
 
The RPS/ISN classification of lupus nephritis:  
 
Class I  Minimal mesangial lupus nephritis  
Class I I       Mesangial proliferative l upus nephritis  
Class III  Focal lupus nephritis (active and chronic; proliferative and sclerosing)  
Class IV  Diffuse lupus nephritis (active and chronic; proliferative and sclerosing; 
segmental and  global)  
Class V  Membranous lupus nephritis  
Class VI  Advanced sclerosis lupus nephritis  
 
35   Other Serious Coronary Artery Disease  
 
The narrowing of the lumen of at least one coronary artery by a minimum of 75% and 
of two others by a minimum of 60%, as proven by invasive coronary angiography, 
regardless of whether or not any form of coronary artery surgery has been performed.  
 
Diagnosi s by Imaging or non -invasive diagnostic procedures such as CT scan or MRI 
does not meet the confirmatory status required by the definition.  
 
Coronary arteries herein refer to left main stem, left anterior descending, circumflex 
and right coronary artery. T he branches of the above coronary arteries are excluded.  
 
36 Poliomyelitis  
 
The occurrence of Poliomyelitis where the following conditions are met:  
 
• Poliovirus is identified as the cause,  
• Paralysis of the limb muscles or respiratory muscles must be pre sent and persist 
for at least 3 months.  
 
The diagnosis must be confirmed by a consultant neurologist or specialist in the 
relevant medical field.  
 
 

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               137  
37 Loss of Independent Existence  
 
A condition as a result of  a disease, illness or injury whereby the Life Assured is unable 
to perform (whether aided or unaided) at least 3 of the 6 "Activities of Daily Living", 
for a continuous period of 6 months. This condition must be confirmed by the 
company's approved doctor.  
 
Non-organic diseases such as neurosis and psychiatric illnesses are excluded.  
 
For the purpose of this definition, “aided” shall mean with the aid of special 
equipment, device and/or apparatus and not pertaining to human aid.  
 
Others  
 
The following two t erms can be found in some of the above definitions, and their 
meanings are as follows:  
 
1. Permanent Neurological Deficit  
 
Permanent means expected to last throughout the lifetime of the Life Assured.  
 
Permanent neurological deficit means symptoms of dysfu nction in the nervous 
system that are present on clinical examination and expected to last throughout the 
lifetime of the Life Assured. Symptoms that are covered include numbness, paralysis, 
localized weakness, dysarthria (difficulty with speech), aphasia (inability to speak), 
dysphagia (difficulty swallowing), visual impairment, difficulty in walking, lack of 
coordination, tremor, seizures, dementia, delirium and coma.  
 
2. Activities of Daily Living (ADLs)  
 
(i)    Washing - the ability to wash in the bath or shower (including getting into and out 
of the bath or shower) or wash satisfactorily by other means;  
(ii) Dressing - the ability to put on, take off, secure and unfasten all garments and, as 
appropriate, an y braces, artificial limbs or other surgical appliances;  
(iii) Transferring - the ability to move from a bed to an upright chair or wheelchair and 
vice versa;  
(iv) Mobility - the ability to move indoors from room to room on level surfaces;  
(v) Toileting - the ability to use the lavatory or otherwise manage bowel and bladder 
functions so as to maintain a satisfactory level of personal hygiene;  
(vi) Feeding - the ability to feed oneself once food has been prepared and made 
available.  
 
*End * 
 

Health Insurance   
138 Copyright reserved by the Singapore College of Insurance Limited [Version  1.4] ANNEX 1  
List of changes to the standard list of 37 critical illness under the Critical Illness 
Framework 2019  
 
 
No. Critical Illnesses  Name 
changed?  Definitions 
changed?


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Critical Illnesses  Name 
changed?  Definitions 
changed?  
1 Major Cancer  Yes Yes 
2 Heart Attacks of Specified Severity  No change  Yes 
3 Stroke with Permanent Neurological 
Deficit  Yes Yes 
4 Coronary Artery By -pass Surgery  No change  No change  
5 End Stage Kidney Failure  Yes No change  
6 Irreversible Aplastic Anaemia  Yes Yes 
7 End Stage Lung Disease  No change  No change  
8 End Stage Liver Disease  No change  No change  
9 Coma  No change  Yes 
10 Deafness (Irreversible Loss of Hearing)  Yes Yes 
11 Open Chest Heart Valve Surgery  Yes No change  
12 Irreversible Loss of Speech  Yes Yes 
13 Major Burns  No change  No change  
14 Major Organ/Bone Marrow 
Transplantation  No change  No change  
15 Multiple Sclerosis  No change  Yes 
16 Muscular Dystrophy  No change  Yes 
17 Idiopathic Parkinson's Disease  Yes Yes 
18 Open Chest Surgery to Aorta  Yes No change  
19 Alzheimer's Disease / Severe Dementia  No change  Yes 
20 Fulminant Hepatitis  No change  No change  
21 Motor Neurone Disease  No change  Yes 
22 Primary Pulmonary Hypertension  No change  No change  
23 HIV Due to Blood Transfusion and 
Occupationally Acquired HIV  No change  Yes 
24 Benign Brain Tumor  No change  Yes 
25 Severe Encephalitis  Yes Yes 

6. Critical Illness Insurance  
Copyright reserved by the Singapore College of Insurance Limited [Version  1.4]                               139  
26 Severe Bacterial Meningitis  Yes No change  
27 Angioplasty & Other Invasive Treatment 
for Coronary Artery  No change  No change  
28 Blindness (Irreversible Loss of Sight)  Yes Yes 
29 Major Head Trauma  No change  Yes 
30 Paralysis (Irreversible Loss of Use of 
Limbs)  Yes No change  
31 Terminal Illness  No change  No change  
32 Progressive Scleroderma  No change  Yes 
33 Persistent Vegetative State (Apallic 
Syndrome)  Yes No change  
34 Systemic Lupus Erythematosus with 
Lupus Nephritis  No change   Yes 
35 Other Serious Coronary Artery Diesease  No change  Yes 
36 Poliomyelitis  No change  Yes 
37 Loss of Independent Existence  Yes No change  
 

18
CRITICAL ILLNESS INSURANCECHAPTER
06
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
How a Critical Illness 
Insurance policy works?A Critical Illness (also known as Dread Disease) policy is an insurance product 
designed to provide a lump sum benefit to a policyholder in the event that the 
insured is diagnosed to be suffering from one of the critical illnesses or has 
undergone a surgical procedure covered under the policy. Each critical illness or 
surgery covered by the policy is precisely defined in the policy, and the benefits will 
be paid only if he suffers a condition that meets the standard definition as specified 
in the policy.
Critical Illness Framework 
proposed by the Life 
Insurance AssociationThe CI Framework seeks to balance the interests of both the consumers and the 
insurance companies i.e. offering clear and consistent coverage on the core critical 
illness benefits will allow for easier product comparison by consumers as well as 
consistent outcomes in CI claims. It seeks to reduce ambiguity of the same CI claim 
being paid by one insurer but rejected by another.
Please refer to LIA Website at: www.lia.org.sg for the latest definitions.
Eligibility criteria for 
payment of the Critical 
Illness Insurance benefit• Policy must be in force.
• Life insured has not reached the expiry age of the CI Insurance cover (if 
applicable).
• Critical Illness Must Be One That Is Covered.
• Meets The Definition Of Critical Illness.
• Diagnosis Meets The Conditions Set Down By The Insurer.
• Meets The Waiting Period Requirement.
• Meets The Survival Period Requirement.


19
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Features of Critical Illness 
Insurance• Pays a lump sum amount upon diagnosis of an insured critical illness. 
• Generally, one critical illness claim is allowed unless it is a Multiple Pay CI 
Insurance plan.
• A specific waiting period (usually ranging from 30 to 90 days). 
• Some insurers may impose a limit on the total amount of sum assured (e.g. 
S$2,000,000) that a policy owner can buy. This is to minimise the risk of moral 
hazard.
• Premium is usually level and non-guaranteed.


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S$2,000,000) that a policy owner can buy. This is to minimise the risk of moral 
hazard.
• Premium is usually level and non-guaranteed.
• Premium is usually not fixed and is based on the age band basis (e.g. age of 35 
to 39 years is one rate, age of 40 to 44 years is another rate) for policies that are 
renewable on a yearly basis.
• No restriction on how the CI Insurance benefit payable is to be used.
• Can be packaged or attached to an ILP, Term, Endowment or Whole Life 
Insurance policy.
• Can be issued on a stand-alone basis (such a policy pays the benefit only upon 
diagnosis of one of the covered critical illnesses. It does not pay upon the life 
insured’s death or total and permanent disability).
• Can be attached as a supplementary benefit to a basic policy.
• CI Insurance rider does not acquire any cash value.
• CI Insurance rider is automatically terminated once the basic policy is 
surrendered or converted into an Extended Term Insurance policy.
• Packaged CI Insurance policy which accumulates cash value (e.g. Whole Life type 
of CI Insurance policy) also provides non-forfeiture options. However, the CI 
Insurance cover may be terminated once the policy owner exercises any of the 
non-forfeiture options (excluding the paid-up option).
• A stand-alone Term CI Insurance policy does not acquire cash value. Hence, it 
does not have any non-forfeiture option.
• Provides 24 hours a day, worldwide coverage, unless otherwise endorsed or 
amended in the policy.
• Assignment of the policy may or may not be allowed.
• A maximum (e.g. age of 60 years) and minimum (e.g. age of one year) entry age 
restriction. For young lives, it may be subject to lien.
• A minimum (e.g. S$10,000) and maximum (e.g. S$2,000,000) sum assured 
restriction. 
• Cover may expire at a maximum age (e.g. 75 years) or a whole life cover may be 
provided.
Two main types of Critical 
Illness covers• Acceleration Benefit.
• Additional Benefit.
Some insurers have also introduced Severity-Based and Multiple Pay CI Insurance 
plans.
Example on Acceleration 
Benefit Critical Illness (CI) 
Insurance CoverIf an individual buys a S$200,000 Whole Life type of CI Insurance policy with 50% 
acceleration, in the event that he is diagnosed to be suffering from one of the 
critical illnesses covered under his policy, the insurer will pay him S$100,000 (i.e. 
50% x S$200,000) plus bonuses (if any). The balance of the sum assured plus 
bonuses (if any) will be paid, when he dies or suffers a Total and Permanent 
Disability (TPD).
Example on Additional 
Benefit Critical Illness (CI) 
Insurance CoverIf a person purchases a S$100,000 Whole Life Insurance policy with a S$200,000 
Additional Benefit CI Insurance rider, the insurer will pay him S$200,000 if he 
contracts one of the critical illnesses covered by his policy. The Whole Life Insurance 
sum assured of S$100,000 will be paid only upon his death or TPD.

20
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Comparison Of 
Acceleration & Additional 
Benefit Types Of Critical 
Illness (CI) Insurance 
Covers
Variations of Critical Illness 
Insurance• Severity-Based Critical Illness (CI) Insurance Plan (Early Pay CI).
• Multiple Pay Critical Illness (CI) Insurance Plan.
• Critical Illness Plans Covering Mental Illnesses.
• Insurance Covering Diabetes.
• Combination of CI Cover.
• Insurance Covering Pregnancy Complications.Acceleration Benefit Additional Benefit
(Packaged Policy Or 
Rider)Stand-alone Policy Rider
It must be packaged 
or attached to a basic 
policy, i.e. ILP, Term, 
Endowment or Whole 
Life Insurance policy.It need not be attached 
to any basic policy.It must be attached to a 
basic policy.
On diagnosis of a critical 
illness, a percentage of 
the basic sum assured as 
specified in the policy will 
be paid.On diagnosis of a critical 
illness, the full sum 
assured of the policy will 
be paid.On diagnosis of a critical 
illness, the full sum 
assured of the rider will 
be paid.


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Payment of a CI 
Insurance claim will 
cause the policy to be 
terminated if it is a 100% 
Acceleration type of 
policy or rider.Payment of a CI 
Insurance claim will 
cause the policy to be 
terminated.Payment of a CI 
Insurance claim will not 
affect the basic policy 
which will continue to be 
in force. 
Total amount paid under 
the policy is equal to the 
basic sum assured plus 
bonuses (if any).Total amount paid under 
the policy is equal to the 
basic sum assured.Total amount paid under 
the policy is equal to the 
sum assured of the CI 
Insurance rider, plus the 
sum assured of the basic 
policy, plus any bonuses 
payable under the basic 
policy, in the event of a 
person who contracts 
a critical illness dies, or 
becomes totally disabled 
subsequently.
CI Insurance rider sum 
assured must not exceed 
that of the basic policy.Not applicable. Sum assured can be 
up to a certain number 
of times of the basic 
sum assured, subject to 
the insurer’s specified 
guidelines.
CI Insurance rider term 
usually follows that of 
the basic policy. Not applicable. The term must not 
exceed that of the 
basic policy and usually 
expires, when the life 
insured reaches a 
specified age.

21
IMPORTANT CONCEPTS DEFINITIONS/EXPLANATIONS
Underwriting 
requirements• Basically, the same as those for Life Insurance policies, namely the completion 
of a proposal form (usually the same as that for Life Insurance) and the insured 
undergoing various medical tests. 
• Difference is that the non-medical limit for CI covers is lower. In other words, 
the life insured could be required to undergo medical tests for a sum assured 
whereas he would not be required to do so if he were to apply for a Life 
Insurance policy with the same sum assured.
Factors to consider in 
determining adequacy of 
Critical illness CoverageHaving a CI policy should not be the main objective but selecting the one that 
provides the right degree of financial support is the key. In determining the 
adequacy of CI coverage, there are five factors to consider:
• Life Insurance Association’s (LIA) recommended amount
• Minimum five years of income, after taking into account debt
• Recovery expenses
• Providing for dependents
Common exclusions under 
a Critical Illness Insurance 
policy• Pre-existing illnesses;
• Self-inflicted injury or illness, while sane or insane;
• Wilful misuse of drugs and/or alcohol;
• Congenital anomalies or inherited disorders;
• Acquired Immune Deficiency Syndrome (AIDS) or infection by any human 
immunodeficiency virus (HIV);
• Bodily injury sustained as a result of travel in or on any type of aircraft, except 
as a fare-paying passenger or as a crew member of an international airline 
operating on a regularly scheduled passenger flight of a licensed commercial 
aircraft; and
• War or warlike operation, nuclear, strike, riot and civil commotion risks.
Note that the exclusions vary from insurer to insurer.
Circumstances under 
which Critical Illness 
Insurance policy will be 
terminated• A valid critical illness claim has been made (usually the case, unless the policy 
contract states otherwise);
• Maximum coverage allowed under the policy is paid out; 
• Basic Life Insurance policy to which it is attached or packaged matures or 
expires;
• Policy lapses owing to non-payment of premiums after the grace period;
• Policy is surrendered for its cash value or converted into an Extended Term 
Insurance policy;
• Life insured dies; or
• Life insured reaches the expiry age of the CI Insurance rider.
Documents that the 
insured has to submit 
when making a claim• Claimant’s statement to be completed by the policy owner and the life insured if 
they are not the same person;
• Attending Physician’s Report; and
• Proof of the critical illness, such as biopsy report, histology report, imaging/scan 
report, laboratory report, and others as mentioned earlier, or as requested by 
the insurer, furnished at the expense of the claimant.
Claim procedures • Written notice of the claim to be submitted within a specified period (usually 60 
days) of the diagnosis of the critical illness or the performance of a surgery as 
covered under the policy;
• Submission of the claim form within a specified period (e.g. 15 days) from the 
date that the insurer sent it out; and
• All proofs of the critical illness must be submitted within a specified period 
(usually 60 days) from the date of diagnosis of the critical illness or surgery.
Note that it may vary from insurer to insurer.


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Note that it may vary from insurer to insurer.
How a Group Critical 
Illness Insurance policy 
works?• Coverage of a Group CI Insurance cover is similar to that of the Individual CI 
Insurance cover
• Can be in the form of either the Acceleration or the Additional Benefit CI type of 
cover. 
• However, there will always be an expiry age (e.g. 75 years) specified in the CI 
Insurance cover, regardless of whether it is an Acceleration or Additional Benefit 
type of CI Insurance cover.

Health Insurance   
140 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]       CHAPTER 7  
OTHER TYPES OF HEALTH INSURANCE  
 
 
 
CHAPTER OUTLINE  
 
1. Introduction  
2. Hospital Cash (Income) Insurance  
3. Medical Expense Benefits Under Travel Insurance  
4. Group Dental Care Insurance  
Appendix 7A – Sample Schedule Of Allowances Under Group Dental Insurance  
 
 
 
LEARNING OUTCOMES  
 
After studying this chapter, you should be able to:  
▪ understand how a Hospital Cash  (Income)  Insurance policy works 
(whether as a stand -alone policy or as a rid er) 
▪ briefly explain the conditions to be met before a claim can be admitted 
under a Hospital Cash Insurance policy  
▪ state the features and types of a Hospital Cash Insurance policy  
▪ list the common exclusions under a Hospital Cash Insurance policy/rider  and know 
the circumstances under which it will be terminated  
▪ list the documents that need to be submitted in the event of a claim under a Hospital 
Cash Insurance policy  
▪ know the common medical benefits provided by a Travel Insurance policy  
▪ state the common exclusions for the medical expense benefit s under a typical Travel 
Insurance policy  
▪ know how the benefits are paid under Group Dental Insurance and whether there are 
any limits to the benefits that one is entitled to claim  
▪ state the common exclusions under a Group Dental Insurance policy  and understand 
how the limitation clause of a Group Dental Insurance policy works  
▪ know the circumstances under which a Group Dental  Insurance  policy will be 
terminated  
▪ know the claim procedure s, including the types of documents that need to be 
submitted for a Group Dental Care Insurance claim  
 
 
 
 
 
 

7. Other Types of Health Insurance  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                 141  
Contents  
CHAPTER OUTLINE  ................................ ................................ ................................ .........  140 
LEARNING OUTCOMES  ................................ ................................ ................................ .. 140 
1. INTRODUCTION  ................................ ................................ ................................ ..... 142 
2. HOSPITAL CASH (INCOME) INSURANCE  ................................ .............................  142 
A. Conditions To Be Met Before A Claim Can Be Admitted  ..............................  143 
A1. Waiting Period  ................................ ................................ ..........................  143 
A2. Hospital Confinement ................................ ................................ ...............  143 
B. Features Of Hospital Cash Insurance  ................................ .............................  144 
C. Types Of Hospital Cash Insurance ................................ ................................ .. 144 
C1. Stand -alone Hospital Cash Insurance  ................................ .....................  145 
C2. Hospital Cash Insurance Riders  ................................ ...............................  145 
D. Underwriting  ................................ ................................ ................................ ... 145 
E. Exclusions  ................................ ................................ ................................ ........  146 
F. Termination Of Cover ................................ ................................ ......................  146 
G. Claims  ................................ ................................ ................................ ..............  147 
3. MEDICAL EXPENSE BENEFITS UNDER TRAVEL INSURANCE ............................  147 
A. Medical Expenses & Other Related Benefits  ................................ .................  147 
B. Hospital Confinement Allowance  ................................ ................................ ... 148 
C. Emergency Medical Evacuation  ................................ ................................ ..... 148 
D. Repatriation  ................................ ................................ ................................ ..... 149 
F. Exclusions  ................................ ................................ ................................ ........  149 
4. GROUP DENTAL CARE INSURANCE  ................................ ................................ .... 150 
A. Benefits Offered ................................ ................................ ...............................  150 
B. Flexibility  ................................ ................................ ................................ .........  151 
C. Exclusions  ................................ ................................ ................................ ........  151 
D. Limitation Clause  ................................ ................................ .............................  151 
E. Termination Of Cover ................................ ................................ ......................  152 
F. Claims  ................................ ................................ ................................ ..............  152 
APPENDIX  7A ................................ ................................ ................................ ..................  153 
 
 


Health Insurance   
142 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 1.


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Health Insurance   
142 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] 1. INTRODUCTION  
 
1.1 In this chapter, we will introduce you to three more types of Health Insurance 
products : Hospital Cash Insurance, Medical Expenses Benefits covered in Travel 
Insurance , as well as Group Dental Care  Insurance .   
 
 
2. HOSPITAL CASH (INCOME) INSURANCE  
 
2.1 Hospital Cash (also known as Hospital Income) Insurance pay s a daily cash 
benefit to the insured if he is hospitalised as a result of an injury or illness. The 
daily benefit is a fixed dollar amount (e.g. S$100) chosen by  the insured at the 
inception of the policy. The amount has no direct correlation to the actual 
amount of medical fees incurred. The total amount paid under this policy may 
be more or less than the actual medical expenses incurred. The payment of the 
benef it is limited to a specified number of days (e.g. 180 days) per 
hospitalisation. Some insurers may impose a lifetime limit on the number of 
days (e.g. 1,000 days) that a person may claim.  
 
2.2 Let us look at Example 7.1 to illustrate the working of this benef it.  
 
Example 7.1: Illustration Of The Working Of A  
Hospital Cash Insurance  Policy  
 
Illustration of the claims history of Harry who purchased a Hospital Cash Insurance 
that paid a daily benefit of S$100 up to a period  of 180 days per hospitalisation and 
1,000 days per lifetime:  
 
2008  
2010  
2012  
2015  
2017  
2019  - 
- 
- 
- 
- 
- hospitalised for 150 days for car accident injury  
hospitalised for  210 days for complicated heart by-pass surgery  
hospitalised for 1 70 days for severe osteoporosis  
hospitalised for 190 days for hip replacement  
hospitalised for 200 days for broken thigh bone treatment  
hospitalised for 1 60 days for varicose v ein treatment  
 
The total amount that the insurer paid to him to -date worked out to be as follows:  
2008  -    150 days  
2010  -    180 days  
2012  -    170 days  
2015  -    180 days  
2017  -    180 days  
2019  -    140 days  (i.e. 1,000 – 860) 
 
Total  -     1,000 days   X  S$100 per day = S$100,000                           
 
2.3 Note that, although Harry had stayed in the hospital for more than 180 days in  
2010 , 2015 and 2017 , the insurer paid him only up to 180 days  being the 
maximum period  per hospitalisation . In year 2019 , though his stay was 1 60 
days, because the balance  of his lifetime limit was 1 40 days, the insurer paid 
him for the hospital stay of  only 140 days.  
 
Dread 
Disease  

7. Other Types of Health Insurance  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                 143  
2.4 Since he had claimed for the maximum number of hospitalisation days allowed 
per lifetime, his policy was terminated after he had received the last payment 
from the insurer.  
 
2.5 Hospital Cash Insurance can be issued as a stand -alone policy or as a rider. 
Most of the time, it is either sold as a rider or included or bundled into other 
types of insurance, such as Personal Accident  Insurance , Travel Insurance, 
Critical Illness Insurance or Medical Expense Insurance policies , to make the 
cover more attractive to the buyer s. The amount payable under Hospital Cash 
Insurance is usually in addition to all other Health Insurance policies, plans or 
schemes (including MediShield  Life, Integrated Shield Plan and any Group 
Hospital & Surgical Insurance Scheme ) for which the individu al is covered.  
 
2.6 This benefit  can be issued to cover hospitalisation resulting from : 
▪ injury only; or  
▪ both injury and illness.   
  
A. Conditions To Be Met Before A Claim Can Be Admitted  
 
2.7 Usually  for a claim under a Hospital Cash Insurance policy to be considered 
valid, it must meet the criteria  as described below : 
 
A1. Waiting Period  
 
(a) For Injury  
If the insured is hospitalised as a result of  injury, the injury must be caused 
by an accident1 directly and independently of any other cause. Usually , 
there is no waiting period for such  a case.


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Usually , 
there is no waiting period for such  a case.   
 
(b) For Illness  
If the insured is hospitalised because of an illness or disease, it must be 
contracted or commenced after the policy has taken effect , as well as  after 
a specified period of time (e.g. 30 days) has lapsed from the date of issue 
or reinstatement of the poli cy. In addition, it must not be an illness that is 
specifically excluded from the cover age of the policy.  
 
A2. Hospital Confinement  
 
2.8 The insured must be confined to a hospital for a specified minimum period of 
time. Note that the minimum duration required for hospital  confinement varies 
from insurer to insurer , and that it ranges from six to 24 hours.  
 
(a) Per Lifetime Limit  
The insured’s total number of hospitalisation days claimed has not 
exceeded the per lifetime limit (as illustrated in Example 7.1 of this 
chapter).  
 
  
 
1  Accident normally means any event caused by violent, accidental, external and visible means.  


Health Insurance   
144 Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4] (b) Expiry Age  
The insured has not reached the expiry age as stated in the policy.  
 
(c)  Cause  
The cause of the injury or illness must not fall under one of the exclusions 
as discussed in a later s ection of this chapter.  
 
B. Features Of Hospital Cash Insurance  
 
2.9 Although Hospital Cash Insurance can be issued as a stand -alone policy or as a 
rider, it share s the common features  as described below : 
(a) There is a per day hospitalisation benefit . 
(b) There is a cap to the maximum amount payable on a single life usually 
expressed as a maximum number of days . 
(c) The benefit is a fixed amount throughout the policy term as specified at the 
inception of the policy . 
(d) There is no waiting period if the cause of hospitalisation is due to an injury. 
A waiting period is usually imposed  from the date of issue or reinstatement 
of the policy if the cause of hospitalisation is due to  an illness . 
(e) The benefit payment is not affected by the payments from other Health 
Insurance policies , plans or schemes ( including Medishield  Life, Integrated 
Shield Plan and any Group Hospital & Surgical Insurance Scheme ), i.e. it is 
paid on top of the benefits received from  all other medical insurance covers . 
(f) The cover expires at a specified age  (e.g. 65, 70 or 75 years ). 
(g) The premiums may be level o r increased once the insured  reaches a higher 
age-band . 
(h) It is yearly  renewable.  
(i) It usually  provides 24-hour, worldwide coverage , although some insurers 
limit the cover to certain geographical areas .  
(j) It usually  has no cash value .   
(k) No assignment of the policy is allowed . 
(l) For a policy that is in  force for a consecutive period of insurance  and free  
of any claim , a premium discount is usually given at renewal.  This is usually 
called a  ”No Claim Discount ”. A certain percentage (e.g. 25% ) will be 
deducted from the next renewal premium , subject to condition s as imposed 
by the insurer . 
 
C. Types Of Hospital Cash Insurance  
 
2.10 As already mentioned, Hospital Cash Insurance can be issued as a stand -alone 
policy or as a rider. Let us look at how each of them works.  
 
 
 
 

7. Other Types of Health Insurance  
 
Copyright reserved by the Singapore College of Insurance Limited [Version 1. 4]                                 145  
C1. Stand -alone Hospital Cash Insurance  
 
2.11 Usually, when Hospital Cash Insurance is being issued as a stand -alone  policy , 
the daily benefits offered are more attractive. It may also include:  
(a) payment of 150% of the daily benefit if the insured stays in a High 
Dependency Unit (HDU) or Coronary Care Unit (CCU)  of a hospital ; 
(b) double or triple payment if the insured stays in the Inten sive Care Unit (ICU)  
of a hospital ; 
(c) triple payment if hospitalisation is due to accident , or if the insured is 
hospitalised overseas;  
(d) get-well benefit;  
(e) rehabilitation income ;  
(f) free accidental death benefit ; and  
(g) involuntary loss of employment benefit (in excess of 30 days) - waiver of 
premium (up to six months).


