What is the difference between critical illness insurance and medical insurance?
What is the coverage of critical illness insurance?
Is cancer covered?
There is a common misconception that critical illness insurance is the same as medical insurance. However, the two products are completely different. Critical illness insurance provides a lump-sum benefit if the insured person is diagnosed with a critical illness covered by the policy. Unlike medical insurance, which covers medical expenses on a reimbursement basis, critical illness insurance provides an accelerated death benefit, which provides the policyholder with a cash advance against the death benefit. There is no limitation on the use of the benefit. The insured person can decide how to use the advance: to pay for daily expenses or cover medical costs, for example.
Product features
Reminders
Understand the types and definitions of covered critical illnesses
- Compare the coverage of different products and make sure you understand the definitions of the covered illnesses before taking out a policy. The predetermined list of critical illnesses, the coverage for early-stage conditions, surgical procedures, or even the definition of the same covered illness vary among policies and insurers.
- The policy terms contain specific descriptions of the medical conditions of critical illnesses, such as cancer and cardiomyopathy. Read the relevant terms and conditions carefully to determine whether the coverage suits your personal needs.
- The design of products with multiple benefits is relatively complex. The terms and conditions vary among products, including the definitions of new diseases, recurrence and waiting periods, as well as additional terms and conditions for claims. For instance, there are benefit limits (e.g. 25% or 30% of the original sum insured) and restrictions on the number of claims for each type of major condition and early-stage illness. Read the relevant terms and conditions carefully, and consult your insurer or intermediary if needed.
- Critical illness insurance policies typically have a "waiting period" clause. The "waiting period" generally ranges from 60 to 90 days following the effective date of the policy depending on individual policy terms. Generally, claims are not payable if a symptom of a critical illness appears or an insured illness is diagnosed during the waiting period. For specific diseases, such as gynaecological diseases or autism, the policy may have a longer waiting period of up to 180 days or even a year.
- If you have purchased a participating policy, be aware that the cash value may comprise non-guaranteed dividends or bonuses, which will be affected by the insurers’ investment strategy and performance, claim experience, operational expenses, etc. The final payout may be higher or lower than the projected payout illustrated in the benefits illustration. Refer to the Understanding a Participating Policy webpage on the Insurance Authority website to learn more about how to choose a participating policy and points to note when interpreting fulfilment ratio and benefits illustrations.
- Disclose actively and honestly your health condition and history, which are critical information for a fair and reasonable underwriting process. Bear in mind that the insurer may reject your claim or even declare your policy invalid on the ground of non-disclosure of material facts if you fail to honestly disclose your health condition and history.
- If you are in doubt as to whether a fact should be declared, it is advisable to disclose it and clarify with your insurer for further consideration. Some insurers may request that you undergo a medical examination to confirm what you have disclosed. Bear in mind that the insurer may reject your claim or even declare your policy invalid on the ground of non-disclosure of material facts if you fail to disclose your health condition and history honestly.
- Pre-existing conditions and symptoms are normally excluded from coverage of critical illness insurance. For instance, if you were diagnosed with cancer before the policy takes effect, it will not be covered.
Relevant information
- Claims case studies
- Common myths
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Publicity and education materials
- Video series: A True Love Story (In Cantonese with English subtitles)
- Closing-window TV segments on critical illness insurance (Chinese version only)
- Promotional videos on YouTube channels (Chinese version only)
- Leaflet: A Quick Guide to Understand Critical Illness Insurance
