Health

Critical Illness Insurance FAQ

1. What does critical illness insurance cover?

Generally speaking, critical illness insurance typically covers major illnesses, such as cancer, heart disease, and stroke.

When the insured person is diagnosed with any designated critical illness, the insurance company will provide a lump-sum benefit. This allows customer to decide how to use the compensation to alleviate the financial pressures faced during the period of illness.

As for the commonly compared medical insurance, it is an insurance product that generally focuses on reimbursement of medical expenses. Benefit is provided based on the actual medical expenses incurred.

2. What are the types of critical illness insurance?

Critical illness insurance encompasses various types and can be classified based on the presence of savings components, single/multiple claims, and the duration of coverage.

Types of critical illness based on the presence of savings components:

• Pure critical illness insurance: Also known as critical illness insurance without savings components. Even if the insured does not make a claim for critical illness during the coverage period, there is no cash value provided.
  
• Critical illness insurance with savings components: It includes savings elements and offers guaranteed and/or non-guaranteed cash values. Even if the insured make a claim for critical illness during the coverage period, if the claimed amount does not exceed the coverage amount, they can still receive the cash value after deducting any previous critical illness benefits paid after the policy's maturity or the death of the insured person.
  

Types of critical illness based on single/multiple claims:

• Single claim critical illness insurance: The coverage terminates after the policy pays out for one severe critical illness.
• Multiple claims critical illness insurance: Even after providing compensation for a severe critical illness, the plan continues to offer additional coverage for specified illnesses such as cancer, heart attack, and stroke.
  

Types of critical illness based on the duration of coverage:

• Term critical illness insurance: It offers critical illness coverage for a fixed number of years (typically 5 or 10 years) and can be renewed based on individual needs at the end of the term. Premiums may be adjusted upon renewal based on the insured's age.
• Long Term Critical illness insurance: Generally, it provides longer coverage until the insured person's death or age 100, depending on the individual plan’s terms and conditions. Generally, premiums are level and do not adjust based on the insured person's age.
  

3. What is the waiting period in critical illness insurance?

In a critical illness policy, the waiting period (or elimination period) refers to the specified period after the policy takes effect during which the insured does not receive coverage even if they exhibit symptoms or are diagnosed with a covered critical illness. It is important to compare the waiting periods of different plans when purchasing critical illness insurance.

4. What should you pay attention to when buying critical illness insurance?

Before buying critical illness insurance, there are numerous factors to consider. For example, it is important to compare the coverage, premiums, and sum insured of different plans:

• Pay attention to the coverage and definition of critical illness: Different critical illness insurance plans may have different coverage of critical illnesses. Coverage for major critical illnesses, early-stage critical illnesses, and juvenile diseases can vary depending on the plan. When comparing critical illness insurance plans, it is essential to carefully review their coverage and definition of critical illness covered.
  
• Understand the types of critical illness insurance: As mentioned, critical illness insurance can be classified based on the presence of savings components, single/multiple claims, and the duration of coverage. Before purchasing, it is crucial to compare based on individual needs.
  
• Choose the appropriate critical illness coverage amount: During the illness period, the insured person may not be able to work and earn normal income , so an appropriate sum insured can help cover medical or daily living expenses. Generally, the higher the coverage amount, the higher the premium. Therefore, when deciding on the coverage amount for critical illness insurance, factors such as treatment costs for the illness and daily expenses, such as supporting family members or mortgage payments, can be taken into consideration.
  
• Aware of waiting period for critical illness insurance: The waiting period for critical illness insurance refers to the specified period after the policy is in-force during which the insured will not be covered even if symptoms or a diagnosis of a covered illness occur. Therefore, when applying for critical illness insurance plans, it is important to pay attention to the waiting period and provide accurate health information at the time of application.

5. What are the differences between medical insurance in general and critical illness insurance?

Medical insurance in general provides coverage for medical expenses on a reimbursement basis, while critical illness insurance offers a one-time lump-sum payment upon the insured's diagnosis of a specified critical illness. The customer can decide how to utilize the benefit during the period of inability to work due to illness. Therefore, these two types of insurance have different natures and do not conflict with each other.

¹ According to the data from the Hong Kong Cancer Registry of the Hospital Authority, the incidence rate of cancer in the 20-44 age group increased from 95.4 new cases per 100,000 people in 2012 to 117.5 in 2021, representing a 23% increase. (Source: https://www3.ha.org.hk/cancereg/)

The content above is provided for general information purposes only and does not take account of your individual needs and circumstances. It should not be construed as an insurance advice and does not constitute any offer or any solicitation to offer or a recommendation of any insurance product(s). You should read the related product information on our website to understand the nature, features, risks and exclusions of the product(s) and determine if the above product(s) meets your needs and circumstances before proceeding with the application.