Cancer, pneumonia and heart disease are the three biggest “killers” in Hong Kong, claiming tens of thousands of lives each year. According to statistics¹ provided by the Hong Kong Cancer Registry under the Hospital Authority, there were 34,028 new cancer cases in 2018, reaching a record high with a year-on-year increase of 2.9%. Reference from the claims data released by the BOC Group Life Assurance Company Limited (“BOC Life”) in 2019², 64% of the critical illness claims were for cancer cases, while 18% were for heart disease. These accounted for 80% of the total claim cases, with the remaining 10% for stroke cases.

The most important feature of critical illness insurance is that when the insured person is diagnosed with any of the critical illnesses listed on the policy, regardless of whether there is treatment or not, the insurance company will provide compensation to serve as an emergency fund that will allow the insured to continue to cover their daily expenses.

At present, many critical illness insurance products on the market provide coverage for more than 100 types of illness, and some even cover as many as 150 types. But for critical illness insurance, is it more ideal if it covers more types of diseases? Applicants should consider how comprehensive they need the critical illness coverage to be. Theoretically, the more types of disease covered, the more expensive the premium will be while the claim rate for some diseases is relatively low. There are other products on the market that only insure against a few common urban diseases, such as cancer, heart disease, stroke, etc., for customers to choose from.

During the course of a lifetime, there is a chance that people will suffer from various critical illnesses and relapse, especially cancer. Therefore, some critical illness insurance policies include a "multiple compensations" clause, which means that after the initial compensation, if the insured person is re-diagnosed with a critical illness, he or she will still be entitled to the compensation, provided that the specified conditions are met. It is important to note that different insurance companies have different definitions of relapses and the number of claims covered for each disease varies. There is also a "waiting period" between claims. The terms and conditions of the policy will generally specify a waiting period and will only compensate for recurrent or newly diagnosed critical illnesses after the waiting period. The calculation of the waiting period also varies from policy to policy. There is a wide variety of critical illness products on the market. Applicants should be careful in reading the product details and not to decide using only one standard.

Another thing to keep in mind is that some critical illness insurance products only provide coverage for up to the age of 85, while some others provide coverage for up to the age of 100. In addition, applicants should also pay attention to the extent of the coverage, whether the treatment covered by the policy is sufficient and whether it includes the Targeted Therapy and Immunotherapy for curing cancer, and even some drugs and therapies that are newly launched on the market.

Critical illnesses may sometimes require two to three years of recuperation, so it is suggested to set the sum insured at two to three times the annual income. Of course, everyone's situation is different and the factors to consider will also vary. If you are the breadwinner responsible for raising children and supporting parents, then the sum insured may need to be further increased.

Is an insurance product better if it covers more types of critical disease or if it provides a greater amount of compensation? Each product is suitable for different people's needs and there is no absolute standard. Both the "quantity" and "quality" should equally be considered. To sum up, consumers should evaluate their insurance needs and affordability, as well as read the policy document including coverage, terms, conditions and risk disclosures including exclusions carefully before applying for the appropriate critical illness insurance.