PGI chapter 6 covers the two health products general insurers sell that pay fixed benefits, not bills: critical illness (CI) insurance, which pays a lump sum when a covered illness meets its definition, and hospital cash (hospital income) insurance, which pays a fixed amount for each day in hospital. The exam tests how these benefit policies differ from medical expense cover, the LIA CI Framework 2024 and its 37 standard severe-stage definitions, waiting and survival periods, hospital cash limits and calculations, and the MAS Notice 120 disclosure and advice rules.
7 sections·~4 min read
✓Checked against the SCI PGI syllabus chapter 6 (checked 13 Sep 2026); LIA CI Framework 2024, MU 58/25 Parts 1, 2 and 4 (13 May 2025); MAS Notice 120 (last revised 1 Jun 2022); LIA & GIA Guidelines on Disclosure Requirements for A&H Insurance Products (Nov 2025); MoneySense CI and hospital cash guides (updated 2 Jul 2026); LIA/GIA 'Your Guide to Health Insurance' (May 2020). Checked 13 Sep 2026.. Unofficial prep, not endorsed by MAS or SCI.
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Must-know for the exam
✓CI pays a one-time lump sum on diagnosis of a covered illness (or covered surgery) that meets the policy definition. The amount does not depend on medical bills, and single-payout cover ends once paid (MoneySense).
✓Hospital cash pays a fixed amount per day in hospital, regardless of the bill, on top of any medical expense policy. It may pay more or less than actual expenses (MoneySense; Your Guide to Health Insurance).
✓Both are benefit (fixed-sum) policies: the indemnity principle and contribution do not apply, so benefits from several policies stack. Medical expense cover is the opposite: total recovery is capped at actual expenses.
✓LIA CI Framework 2024 (MU 58/25, 13 May 2025) applies to LIA and GIA members: 37 conditions with common definitions at the SEVERE stage (Version 2024). Early and extremely severe stages use each insurer's own definitions.
✓Version 2024 applies to new products launched on or after 1 Oct 2025; Version 2019 products may not be sold from 1 Oct 2025. Individual policies go by proposal signed date; group policies by CI policy effective date.
✓An insurer may cover any number of conditions, even one. If it covers a listed condition at the severe stage, it must use the LIA definition. The 30-condition cap was abolished in Nov 2014.
✓The industry 90-day CI waiting period was abolished from 16 Nov 2022. Each insurer now sets its own waiting periods and must state them in the product summary.
✓Key LIA definitions: stroke deficit confirmed at least 6 weeks after the event (TIA excluded); coma at least 96 hours; Major Burns 20% of body surface; Terminal Illness life expectancy of 12 months or less; Loss of Independent Existence means 3 of 6 ADLs lost for 6 months.
✓Major Cancer excludes carcinoma-in-situ, non-invasive and pre-malignant tumours, and T1N0M0 prostate, thyroid and bladder tumours. It also excludes a diagnosis based only on tumour cells or molecules found in bodily fluids.
✓CABG excludes angioplasty and other catheter procedures. Angioplasty is its own condition and needs at least 60% stenosis of a major coronary artery.
✓Waiting period: no benefit if diagnosed within X days of issue, endorsement or reinstatement, whichever is later. Survival period: no benefit if the insured dies within X days of diagnosis.
✓MAS Notice 120 Appendix C: a policy that is not Medisave-approved must say Medisave cannot pay its premium. Appendix D: a short-term A&H policy must warn that the insurer need not renew it.
✓MAS Notice 120 para 29: at least 30 days' written notice before varying the terms of an individual A&H policy.
Why this chapter matters
•Candidates come to chapter 6 used to indemnity thinking from motor and property cover. Most wrong answers here come from applying that thinking to a benefit policy. Examiners set scenarios where the insured holds two CI policies or two hospital cash plans, or has a bill paid by an Integrated Shield Plan, and ask what is payable.
•The second theme is definitions. A CI benefit is paid only if the condition meets the policy definition, and for 37 conditions that definition is the LIA standard at the severe stage.
Four health products, four ways of paying
•The LIA/GIA 'Your Guide to Health Insurance' matches each product to a need. Learn the payment basis first; almost every comparison question depends on it.
•Medical expense (hospital and surgical): reimburses actual expenses, subject to deductible, co-insurance and limits. Recovery from all such policies together cannot exceed the bill.
•Hospital cash (hospital income): a fixed amount for each day in hospital, whatever the bill, paid in addition to medical expense cover.
•Critical illness (dread disease): a lump sum on diagnosis of a covered illness or covered surgery that meets the definition, paid in addition to medical expense cover.
•Disability income: a continuous income while the insured cannot work because of disability or sickness.
•MAS Notice 120 para 17(a) makes this a disclosure duty. The intermediary must explain whether a policy reimburses costs, pays an income, pays lump sums on specified events, or a combination.
•Trap: a hospital cash benefit is not reduced because an Integrated Shield Plan paid the bill, and two CI policies do not share a claim. Contribution applies only to indemnity policies.
CMFASPrep