Critical Illness in Insurance: Do I need it?

Critical illness does not discriminate. It can hit anyone at any age, anytime and anywhere. Therefore, it is essential to ensure that you have a medical and health insurance policy that covers critical illnesses.

There are 38 standard types of critical illnesses that most insurance policies cover, though it may differ according to individual insurance companies.

It is best to sign up for a plan when your health is at its optimum level. Usually this is when you are still young and relatively free of critical illnesses.



A critical illness insurance policy is different from a medical card, also known as a hospitalisation and surgical insurance policy. Having a hospitalisation and surgical insurance policy does not cover you for critical illnesses, also known as dread diseases.

A medical or health card only covers your medical expenses incurred during hospitalisation. When you have a medical card, all hospitalisation expenses will be paid directly to the hospital.  For certain insurance companies, you are required to pay first and get a reimbursement from the insurance company.

Critical illnesses insurance policy on the other hand, pays you a lump sum directly as soon as you are diagnosed with a critical illness from the list provided in your insurance policy. This money will help pay for your medical and financial expenses throughout the term when you need to take time off work.

For instance, you will still need to service your car and house loans even while seeking treatment which can drag on for years. It also acts as an income replacement to support your medical costs and other financial commitments while you rest at home.



The amount of coverage you need depends on your obligations, savings and needs.

It is best to seek advice from a financial planner or a trusted certified insurance agent. As a rough estimate, you would need coverage of at least three times your annual income.

This will allow you to live comfortably while you are recuperating and not working. Why three years? Rough estimates show that a heart bypass patient requires six to twelve months to rest and recover, while a cancer patient requires about one to more than two years of recovery, depending on the severity of the condition.

In many ways, being over-insured is better than being under-insured so that you need not worry about money and can focus on your healing process. Being under-insured brings additional stress and you will need to constantly monitor your expenditure to avoid over-spending.


Although it may seem to be wasteful getting both a critical illness plan and medical card, they are actually meant to complement each other.

A medical card bears your treatment costs during hospitalization, such as from accidents or any form of mishap, while a critical illness insurance plan provides you with a lump sum of money to help you with your expenses.

That is why it is important to know what your policy covers when buying medical and health insurance. Having one without the other will mean that you will still be burdened with payments in the event of hospitalization or critical illness.



The extent of your coverage depends on your insurance policy. Therefore, it is vital to understand all the terms in your policy and your benefits before selecting the policy.

Since January 2002, a standard list of 38 critical illnesses have been used by insurance companies to avoid confusion among policy holders.

Depending on your insurance policy, some insurance policies cover all 38 critical illnesses, while some do not. There are also exclusions for coverage, such as for inherited disorders, suicide or self-inflicted injury.

Also be aware of the waiting period of up to 60 days, where the insurance company is not obligated to pay if any symptoms or medical conditions occur within the waiting period.



Regardless of the amount of critical illnesses you are diagnosed with, you are subject to only one-time claim, unless the payout is less than 100 percent of the sum insured as stated in the policy.

Once you have claimed the total sum, your coverage will be terminated.



Congratulations for having good health right up to old age! The good news is that you need not feel you have wasted your money paying for something that never happened. Discuss with your insurance agent about investment-linked policies, where your policy is combined with a savings component.

In the event you stay healthy and free of critical illnesses, a certain percentage of the money that has been paid over the years will be paid back to you when you surrender your policy.



Prepare these documents in advance for the insurance company when making your critical illness claims:

  • Critical illness claim form
  • Medical report on critical illness
  • Original policy document
  • Birth certificate
  • Other supporting documents such as CT scan, biopsy report or electrocardiogram



  1. Stroke
  2. Heart Attack
  3. End Stage Kidney Failure
  4. Cancer
  5. Coronary Artery Bypass Surgery
  6. Other serious Coronary Artery Disease
  7. Angioplasty
  8. End stage liver failure
  9. Fulminant viral hepatitis
  10. Coma
  11. Benign Brain Tumour
  12. Paralysis or Paraplegia
  13. Blindness or total loss of sight
  14. Deafness or total loss of hearing
  15. Major Burns
  16. HIV due to blood transfusion
  17. Occupationally acquired HIV infection
  18. Full blown AIDS
  19. End stage lung disease
  20. Encephalitis
  21. Major organ or bone marrow transplant
  22. Loss of speech
  23. Brain surgery
  24. Heart valve surgery
  25. Terminal illness
  26. Loss of independence existence
  27. Bacterial meningitis
  28. Major head trauma
  29. Chronic Aplastic Anemia
  30. Motor Neuron Disease
  31. Parkinson’s Disease
  32. Alzheimer’s Disease
  33. Muscular Dystrophy
  34. Surgery to aorta
  35. Multiple Sclerosis
  36. Primary Pulmonary Arterial Hypertension
  37. Medullary Cystic Disease
  38.  Severe Cardiomyopathy
  39. Systemic Lupus Erythematosus with Lupus Nephritis

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