Is critical illness insurance necessary when you're already covered by medical insurance?

Confused about medical and critical illness insurance? Is critical illness insurance necessary when you're already covered by medical insurance?

Many people are unsure about the differences between medical insurance and critical illness insurance. While they both provide protection for the insured, the two actually serve different purposes. Medical insurance covers expenses such as hospitalisation that are considered medically necessary. It's not limited in the types of illnesses or diseases it covers, and your expenses are reimbursed as incurred. In other words, medical insurance covers medical treatment only. Meanwhile, critical illness insurance covers illnesses specified in the policy, and provides the insured with a one-off lump sum cash payment. This payment can be used to pay for medical treatment as well as daily necessities, making up for lost income if you're not able to work. So, even if you're covered by medical insurance, it's also good to have critical illness cover to enhance your medical safety net.

 

There are two main types of critical illness insurance on the market: lifelong critical illness insurance and term critical illness insurance. Lifelong critical illness insurance, which is usually purchased through an agent, offers protection throughout your lifetime. However, it has a relatively more complex product structure with a savings element and higher premiums. Meanwhile, term critical illness insurance has a relatively simpler product structure, and offers protection without a savings element. The policy is usually renewed at regular intervals (e.g. every year, every 5 years or 10 years, etc). Some term critical illness insurance products can also be purchased online. This is a more affordable option for the general public, especially younger customers. This article will focus on term critical illness insurance.

 

Three major critical illnesses – Beware of insurance loopholes

 According to statistics from the Department of Health, 36.6% of deaths in Hong Kong in 2019 (see Remark 1) were caused by malignant tumours, heart diseases and cerebrovascular diseases. So it's especially important that your critical illness policy covers cancers, heart diseases and stroke, which account for more than 90% of critical illness insurance claims. While the premiums for term critical illness insurance are relatively low, the protection offered by many policies on the market isn't comprehensive enough as they cover only the three critical illnesses mentioned above. Here are some of the common loopholes in critical illness policies. To better protect yourself, you should read the policy carefully before subscribing to any insurance product.

• Only the first cancer is covered. No protection for second cancer, continuation, recurrences and new cancers.
• Only severe cancers are covered. No protection for early stage cancer and carcinoma-in-situ.
• Only severe heart diseases are covered. No protection for early-stage heart diseases such as the common coronary heart disease which requires angioplasty.
• Carotid artery disease that requires surgery isn't covered.
• Endovascular treatment for cerebral aneurysm isn't covered.

 

 

Bupa Safe Critical Illness Insurance Scheme offers comprehensive and flexible protection

With that in mind, Bupa has launched Bupa Safe Critical Illness Insurance Scheme which offers comprehensive protection against critical illnesses at affordable rates. For greater flexibility, the Base Plan A can be upgraded according to your needs with optional benefits B and C:

• Base Plan A: Covers three major critical illnesses – cancer, heart disease and stroke, as well as Additional Cancer Benefit to cover a second cancer. With a lifetime benefit amount up to HK$3,300,000 in aggregate (see Remark 2) and monthly premiums as low as HK$108 (see Remark 3), the scheme also covers five early stage critical illnesses, such as carcinoma-in-situ, coronary artery disease requiring angioplasty, carotid artery disease requiring surgery and endovascular treatment for cerebral aneurysm. Once you've enrolled, renewal is guaranteed up to 100 years old (see Remark 4).
• Benefit B (optional): Enhances the safety net against critical illnesses by offering coverage for an additional 77 major critical illnesses. With this, the plan covers a total of 85 conditions for 98% coverage of all serious critical illnesses (see Remark 5).
• Benefit C (optional): Covers cancer treatments with expenses reimbursed as incurred, allowing you to focus on recovery.

 

Optional Cancer Treatment Reimbursement Benefit to cope with expensive cancer treatments

When it comes to critical illnesses, people are concerned about cancer the most because of its high treatment costs. According to a survey (see Remark 6), the median cost of self-financed drugs for late-stage cancer treatment in public hospitals was HK$266,677. The number is even higher for private hospitals. For that reason, Bupa Safe Critical Illness Insurance Scheme offers the optional benefit C that covers cancer treatment. All expenses incurred for cancer and carcinoma-in-situ treatment will be covered on a reimbursement basis. It also covers hospitalisation, surgery, non-surgical cancer treatment and diagnostic tests up to HK$1 million per contract year (see Remark 7). This limit will be restored each contract year, which is especially beneficial for those undergoing lengthy cancer treatment that spans several years. In addition, this optional benefit offers extra benefits for out-patient care and monitoring, extended care and so on, and an experimental treatment cash allowance for enhanced protection with the latest technology. What's more, you can convert the optional Cancer Treatment Reimbursement Benefit to Bupa MyBasic VHIS / Bupa MyFlexi VHIS (Standard) after five years, with no need for underwriting.

The insurance market has long been dominated by intermediaries, so people may not be familiar with high-quality, affordable term critical illness insurance products. The new Bupa Safe Critical Illness Insurance Scheme, which is now available online, offers enhanced protection and greater flexibility. It's a great option especially for budget-savvy consumers. Click here for a quote and more details.

Remarks
¹ For details, please refer to "Death Rates by Leading Causes of Death, 2001 – 2019" on the website of the Centre for Health Protection, Department of Health.

² Based on Plan A3 with lifetime benefit amount of HK$3,300,000 in aggregate, including HK$1,500,000 for Major Critical Illness Benefit, HK$1,500,000 for Additional Cancer Benefit and HK$300,000 for Early Stage Critical Illness Benefit. Customers need to be diagnosed with covered critical illnesses after the applicable waiting periods as specified in the contract to be eligible to claim these benefits. Please refer to the contract for details.

³ Based on an 18-year-old non-smoker enrolling in the critical illness basic benefit with lifetime benefit amount in aggregate of HK$3,300,000 using annual payment mode. This figure does not include any promotional offers or discounts which may be available.

⁴ Additional Cancer Benefit will end on the contract anniversary date immediately following the age of 85. Age limits apply to coverage for certain illnesses under optional Extended Major Critical Illness Benefit. Please refer to the Schedule of Critical Illness Benefits for details.
⁵ The 85 critical illnesses covered under the critical illness basic benefits and optional Extended Major Critical Illness Benefit of this plan include 98% of designated critical illnesses in 10Life's Scoring Methodology of Term Critical Illness Insurance. Exclusions and waiting periods apply. Please refer to the contract for the terms and excluded conditions.
⁶ For details, please refer to a survey conducted in July 2018 (Chinese only) on the website of Cancer Information.

⁷ Full cover for hospital and surgical expenses for cancer and carcinoma-in-situ is HK$500,000 (option C1) or HK$1,000,000 (option C2) per contract year.

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