New Critical Illness Standardisation (2019) and Its Implications

In 2019, the Life Insurance Association (LIA) proposed a revised set of standardised critical illness definitions that eventually were implemented by insurers. From 26 August 2020, all critical illness policies sold here must adopt this new set of definitions. The definition is important as it is the yardstick for the insurance company to determine if a critical illness diagnosed qualifies for a claim.

This is not the first time critical illness definitions have been standardised. Previous rounds in 2003 and 2014 were implemented to standardise a common set of critical illness definitions for the life insurance industry to adopt so as to avoid confusion among insurers in the different ways definitions were crafted as well as to keep the definitions relevant in view of medical advancement.

The objectives of LIA’s review this time is to bring the 2014’s common critical illness definitions up to date and align with advances in medical technology and practices as well as to address ambiguity based on insights from the past 5 years of experience. The names of some definitions were also revised to better reflect the intent of the coverage.

So what is the impact of this 2019 standardisation?

In our findings, we observed that most of the definitions remained unchanged or neutral in effect. Some definitions, however, were revised what seem to either become stricter, relaxed or have a mix of both within the same definition.

In gist, of the 37 major critical illness (CI) definitions:

  • 16 of them are unchanged, of which 6 have their headers (names) made clearer with no change to their definitions.
  • 21 of these CI definitions have been revised
    1. 8 of these 21 have clearer headers
    2. In terms of the change in the level of strictness of claims outcome:
      1. 3 of these 21 CI are observed to be stricter
      2. 2 of these 21 CI have a mixed bag of stricter-cum-relaxed parts in its definitions.
      3. 1 of the 21 CI are observed to be more relaxed
      4. 15 of these 21 CI are observed to be neutral in terms of their level of strictness

Let us expand on these two broad categories of CI definitions.

The 16 CI With Unchanged Definitions

Here are the definitions that remained unchanged:

Chart 1

^Bold portion refers to an additional description to its header to make definition clearer and less ambiguous. Take for example Apallic Syndrome, it is now renamed to Persistent Vegetative State because most people would understand the Persistent Vegetative State better than the former.

The 21 CI With Changes To Definitions

Chart 2

^Bold portion refers to an additional description to the header to make definition clearer and less ambiguous.

Major Cancer Made Stricter

More exclusions are added to the 2019 Major Cancer definition. Major Cancer diagnosed based on finding tumour cells in the blood, saliva, faeces, urine or any other bodily fluid in the absence of further definition and clinically verifiable evidence does not meet this definition. More definitive medical evidence is required to satisfy this definition.

Other Serious Coronary Artery Disease Made Stricter

The new definition excludes certain diagnostic procedures for detecting serious coronary artery disease. If coronary artery disease is detected only through imaging or non-invasive procedures such as CT scan or MRI, this itself is not sufficient to meet the definition requirement.

Coma Made Stricter

What is added to the 2019 definition is the specific exclusion of Coma arising from been medically induced.

Mix Bag Of Strict And Relaxed Parts In Benign Brain Tumour

In the 2014 definition, the brain tumour must be life-threatening and has caused damage to the brain to qualify its requirement, but these conditions are now removed from the 2019 definition. However, more exclusions are also added to the 2019 definition, namely abscess and angioma, making it stricter.

Mix Bag Of Strict And Relaxed Parts In Blindness

In the 2014 CI definition, clients can only claim if the vision is measured at 3/60 or worse in both eyes using a Snellen eye chart or equivalent test. In the 2019 definition, this was relaxed to 6/60 (the higher the more relaxed) but it is also explicit to state that the blindness must not be correctable by surgical procedures, implants or any other means.

HIV Due To Blood Transfusion And Occupationally Acquired HIV More Relaxed

If one is diagnosed with HIV with Thalassaemia Major or Haemophilia, he or she would not be able to claim under 2014 definition but is now possible under the 2019 definition.

Will My Current CI Plans Be Affected?

These CI definitions will apply to late-stage critical illness policies bought after 26 August 2020. Older policies bought before 26 Aug 2020 are not affected by this standardisation exercise. However, existing Group insurance that is renewed on or after 26 August 2020 will carry the new 2019 definitions.

Appendix: Affected CI definitions[1]

Chart 3

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Chart 5

Chart 6

Chart 7

Chart 8

[1] comparison-of-lia-definitions_2014-and-2019.pdf

This is an original article written by Eddy Cheong, Head of Solutions Team at Providend, Singapore’s First Fee-only Wealth Advisory Firm.

For more related resources, check out:
1. Questions You Should Ask Before Taking Up An Insurance Product
2. The Basic Insurance Checklist For Retirees
3. Frequently Asked Questions About CPF

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