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Newsletter

2006 4th Edition (Other Editions)

Nowadays, critical illness became a widely discussed topic partly because of extensive propaganda from the government and the media, another reason is that more people were being diagnosed with critical illness and we would easily come across true stories of this kind in our daily lives. General opinion is that one should seek protection from critical illnesses through purchase of insurance instead of relying on the public medical system.

There are lots of insurance products around and many people are confused if these products “overlap” each other. One frequently asked question is: I’ve already got a medical insurance plan that covers hospital and surgical expenses, why should I need critical illnesses insurance?

We will try to describe briefly the difference between these two types of protection. Hospital and surgical insurance is an indemnity policy that means the insured could reimburse the medical fees he had paid with a preset limit. In another words, he would not get more than what he had paid to the hospital. On the other hand, critical illness insurance will provide a lump sum payment upon diagnosis irrespective of the medical fees incurred.

To make it easier for you to understand the difference between the two, let me site a real life example.

One of our clients, Mr. A, is a very health conscious person. He is 38 years old and he went for routine annual medical check after he got married at the age of 30. Last year, he went for the medical check as usual but this time, his family doctor spot something unusual; his white blood cells count was very high. Mr. A was immediately referred to Queen Mary Hospital for further investigation. He was diagnosed with chronic myeloid leukaemia. According to the doctor, it was lucky that Mr. A voluntarily went for medical check and was able to discover his illness at its early stage.

Mr. A does not have to go through the repulsive treatments that we used to hear about in treating leukaemia, no bone marrow transplant or chemotherapy, only oral medications. Basically, Mr. A’s daily life would not be affected at all by this illness. Sounds good. However, Mr. A had to face with another big problem, that was the monthly expenses of $18,000 on medication and he would not receive any subsidy from the Hospital Authority, as this is not one of the subsidized items. In this case, the hospital and surgical plan will not be able to help since no hospitalization is needed in this case.

Four years ago when Mr. A’s daughter was born, I proposed to him an upgrade in his coverage that included critical illness protection of $1.2 million. At that time, Mr. A, like others, thought that he had already got hospital and surgical insurance, so critical illness protection would not be necessary. Luckily I managed to talk him into it and now the insurance has already delivered the $1,200,000 in cash to Mr. A and he would not have to worry about the medical expenses.