Critical illness insurance is designed for serious illnesses, typically covering conditions like cancer, heart disease, stroke, and more. Some plans also cover early-stage conditions and specific diseases like dementia. It provides a lump sum payment to help with medical expenses, lost income, and living costs.

Critical illness insurance offers financial support during serious health conditions, covering treatment costs or income loss, thereby reducing the family’s burden, and allowing you or your loved ones to focus on recovery. As of 2024, the leading causes of death in Hong Kong are cancer, pneumonia, and heart disease^. Whether facing these top killers or other serious illnesses like stroke, critical illness insurance helps manage unexpected medical costs and income loss pressure.

^Source: Death rate by leading cause of death, Centre for Health Protection, Department of Health, The Government of the Hong Kong Special Administrative Region

Premiums are actuarially determined based on several factors, including the insured’s age (older age increases risk and premiums), gender, smoking habits, and health status. The coverage scope and sum assured also impact premiums; more comprehensive coverage or higher sums assured result in higher premiums. Additionally, the type of policy (term or whole life), payment frequency (monthly or annually), and whether it includes savings components (pure critical illness or savings-linked) affect premium levels. Insurance companies use these factors and their risk assessment models to set standard premiums and additional charges for each policyholder.

Critical illness insurance can be categorized by payout component, payout frequency, and coverage period.

Payout Component:
Pure Critical Illness Insurance: No savings feature, payout based on fixed sum assured, lower premiums, suitable for short-term coverage.
Critical Illness Insurance with Savings element: Combines protection with cash value/bonuses, suitable for long-term coverage, often lifelong.

Payout Frequency:
Single Payout: Terminates after one payout, lower premiums, cost-effective.
Multiple Payouts: Supports multiple claims, suitable for enhanced protection, main earners, or high-risk individuals.

Coverage Period:
Term Critical Illness Insurance: Provides fixed-term coverage (e.g., 5-10 years), renewable with age or health status adjustments, initially lower premiums, suitable for short-term needs but may increase significantly upon renewal.
Whole Life Critical Illness Insurance: Coverage extends to lifetime or beyond 100 years, fixed premiums during the payment period, often includes savings or bonuses, suitable for long-term stable protection and financial planning, ensuring long-term financial security.

Consider your budget, health risks, and goals. For example, those with short-term needs or limited budgets may opt for term insurance; those seeking lifelong protection or financial planning may choose whole life insurance; those with a family history of illness may prefer multiple payout plans.

For high-risk individuals (e.g., family history of cancer), multiple payouts can address recurrences, offering more comprehensive protection. For low-risk individuals, single payout plans are more economical.

The waiting period is the time after the policy becomes effective during which the insurer will not pay claims for diagnosed critical illnesses. Standard Chartered’s critical illness insurance products typically have a 90-day waiting period. For details, please refer to the specific product terms.

When purchasing critical illness insurance, consider the following to ensure the plan meets your needs:

• Coverage Scope: Confirm the number of conditions covered and whether early-stage/multiple claims are included.
• Premiums: Term insurance premiums are lower but adjust with age, while whole life premiums are fixed but higher.
• Payout Frequency: Single claim policies have lower premiums, while multiple claim policies are suitable for enhanced protection or high-risk individuals.
• Waiting Period: Typically 90 days, with some conditions possibly longer.
• Other Factors: Check exclusions (e.g., congenital conditions, pre-existing conditions, war), savings components, and cooling-off period. Choose based on age, health, and financial goals, and consult an insurance planning manager.

Most insurance companies assess applicants based on age, health status, family medical history, and may require further medical examinations or reports if necessary. Generally, applicants aged 18-60 without serious medical history do not need a medical exam under specified coverage limits. However, older applicants, higher coverage amounts, or existing health risks may necessitate blood tests or medical exams to assess risk. Accurate health disclosure is crucial; undisclosed known health issues may affect policy validity or coverage. Understand your health status before applying and comply with the insurer’s underwriting process to ensure coverage effectiveness.

Depending on the policy design and coverage scope, critical illness insurance typically offers single payout or multiple payout options. Single payout policies only allow one-time lump sum payment for the first diagnosis of a covered illness, with no further coverage for recurrences or other critical illnesses. Multiple payout policies permit claims for multiple different illnesses within the coverage period, usually with a maximum number of claims (e.g., 2 to 9 times), though some conditions may only be claimed once. Even policies with unlimited claims often impose waiting periods for repeated claims of the same illness. Policyholders should read the policy terms carefully to understand claim limits, disease definitions, and waiting periods, choosing products that meet their needs. Generally, multiple payout critical illness insurance offers longer-term and more comprehensive protection but comes with higher premiums.

Most critical illness insurance plans have a 21-day cooling-off period, during which the policy can be cancelled for a full refund.

• Health Insurance: Covers hospitalization, surgery, and other medical expenses, reimbursed based on actual costs, suitable for daily medical expenses.
• Critical Illness Insurance: Provides a lump sum payment without requiring receipts, used for medical or living expenses, suitable for financial pressure from serious illnesses.

Both complement each other; health insurance reduces medical cost burdens, while critical illness insurance fills income gaps.

Critical illness insurance pays a lump sum upon diagnosis of a covered illness to alleviate financial stress and expenses due to illness. Life insurance pays a death benefit to beneficiaries upon the insured’s death, providing financial security for the family. In summary, critical illness insurance focuses on cash flow needs during illness treatment, while life insurance ensures beneficiaries’ needs after losing the primary income source.