There is common confusion between critical illness insurance and general medical insurance. Instead of relying solely on what your insurance broker says, it is crucial to understand their difference before footing the bill.
Generally speaking, critical illness insurance provides coverage for cancer, stroke and heart attack—the three major critical illnesses. Critical illness insurance usually pays a lump sum benefit should the insured be diagnosed with a defined critical illness. Meanwhile, medical insurance products generally reimburse actual medical expenses.
| Critical Illness Insurance |
General Medical Insurance |
|
| Benefits |
One-off or multiple conditional payments |
Reimbursement |
| Coverage |
Cancer, stroke, heart attack, and other defined critical illnesses |
Full or partial reimbursement of any hospitalization expenses |
Common Critical Illness Insurance Myths Debunked
Myth 1:
X Critical illness insurance covers all medical expenses of a critical illness.
✓ A fixed sum will be provided upon diagnosis of defined critical illness. The benefits are not limited to medical purposes; it is up to the insured to determine how to spend the money.
Myth 2:
X Critical illness insurance covers all kinds of “critical illness.
✓ Every insurer has its own definition of “critical illness”. For example, some insurance does not cover carcinoma in situ, cancer recurrence or specific types of cancers.
How to choose an insurance plan that best suits you?
Deciding which insurance to take depends on your needs and factors like age, health conditions and income. Let’s take a look at the following scenario.
Scenario: Breast cancer requiring annual medical expenses of HKD 1,000,000
| Critical Illness Insurance |
Medical Insurance |
| Lifetime Insurance Amount: HKD 1,000,000 |
Annual Insurance Amount: HKD 1,000,000 |
| Annual Premium: HKD 33,070 |
Annual Premium: HKD 3,125 |
Which one would you choose?
Who should choose medical insurance?
Young people in their 20s, with employed parents and less financial commitments, should still plan ahead for medical expenses in case of unpredictable sickness. In this scenario, they can consider taking out medical insurance, rather than critical illness insurance as the former provides essential medical cover at a much lower premium.
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