critical-illness-HK

 

                                               

 

DO YOU NEED A CRITICAL ILLNESS INSURANCE? 

 

Critical Illness Insurance typically pays a lump sum to you if you are diagnosed with one of the conditions or a major life-threatening illness as defined in the insurance policy.

 

Examples of such life-threatening illnesses include advanced cancer, severe heart attack, severe stroke etc. Do note that the benefits are paid only if the illnesses exactly meet the definitions stated in the policy and only if illnesses are severe or “critical” enough to qualify as life threatening. Early stage critical illness coverage is available only if it is specified in the policy.

 

When you have a critical illness, your primary concern (and that of your family) is getting you the best possible care - no matter what the costs are. Although you may have hospital insurance, there are expenses associated with a critical illness that your hospital plan may not cover, such as deductibles, co-insurance payments, certain prescription, alternative medicines, advanced medical care overseas or experimental drugs.

 

In addition, advances in the medical care allow more people to survive major illnesses. The likelihood of someone surviving a critical illness is actually quite high. However, survivors of critical illnesses may find that they are no longer able to work or may need to have expensive after-care services.

 

The lump sum payment from critical illness insurance can be used to financially support you and your family during this period. As the lump sum payment from critical illness insurance does not depend on your actual medical expenses or admission to the hospital, you can decide how to spend the money!

 

 

 

WHO SHOULD BUY THIS PRODUCT? 

 

You should consider critical illness insurance if you have limited savings or are worried about high medical expenses should you fall seriously ill. In addition, you should buy a critical illness insurance policy if you want to have flexible financial support in the event of a critical illness. The payout is a lump sum amount and you decide what you want to do with it!

 

Whether or not you have dependants may not be an important consideration, as the money is principally for yourself. You can use it to get the required level of medical care, cover a variety of expenses and provide income if you are unable to work. Do note that the cost of healthcare can put a major strain on finances, especially for critical illnesses, as it often involves major surgery, long- term hospital care, or if the illness leads to disability and inability to work.

 

 

 

HOW MUCH COVERAGE SHOULD YOU BUY? 

 

Typically, the payout from a critical illness product will go to pay for:

  • Loss of your income during the time of illness;
  • Payment of co-insurance and deductibles from hospital plans;
  • Cutting-edge drugs or treatment;
  • Hiring extra help to assist you with daily activities; or
  • Rehabilitation after the treatment of the illness.

 

The amount of coverage that you would need could vary over a wide range. This is primarily because the cost of new drug treatments that you may want to access is dependent on the type of critical illness and medical advancements over time.

 

 

 

WHAT DOES A CRITICAL ILLNESS INSURANCE PRODUCT LOOK LIKE? 

 

The main benefit of a critical illness policy is to provide a lump-sum benefit upon the diagnosis of a covered critical illness. The renewal of your policy will be guaranteed although the premium rates may not be guaranteed.

 

Insurance companies try to ensure that the premium rates on critical illness policies are kept affordable. So it is important to understand that:

 

  • Critical illness policies do not cover pre-existing illnesses.
  • Critical illness policies do not pay out on early stage illnesses unless specifically stated. Typically, any coverage amount for early stage illnesses will be limited.

 

In addition to the main benefit, there may be a few minor variations that are added to the product:

  • Death benefit: pays out if you pass away without making a critical illness claim.
  • Total and Permanent Disability: pays out the sum assured earlier to you if you are permanently disabled.
  • Early stage benefit: provide a payout if diagnosed with early stage critical illness. Coverage will typically be less than the full sum assured.
  • Hospital expenses: the policy may cover some hospital expenses.

 

 

  

  critical-illness-insurance-star

 

DIY TIP

                             

Each critical illness product will specify the number of critical illnesses covered.

 

A difference of one or two critical illnesses between different policies may not make a difference as some insurers split out one type of illness into two that has different definitions.

 

 

 

The above are subject to the definitions as set out by the insurance companies.