Medical Versus Critical Illness Insurance

Everyone needs medical insurance, but not everyone needs critical illness protection. Is this statement true or false?

To answer that question, we must first find out what is the purpose of both policies. A medical insurance policy protects you in the event of a medical emergency which requires hospitalization, by covering for the cost of treatment. On the other hand, a critical illness insurance policy provides financial aid in the form of a lump sum payout, in the event you are diagnosed with a critical illness. Still confused? It’s okay, we have an example of how they would play out in a person’s life.

If a person has severe stomach discomfort, he goes to a clinic to see a doctor. At the clinic, the doctor suspects it is a case of appendicitis and refers the patient to a hospital for immediate medical attention. Upon checking, the case is confirmed - the patient has a severe case of appendicitis and has to undergo a surgery immediately. The surgery goes well and he is discharged from the hospital after two days of bed rest. The cost of hospitalization, treatment and medication, which comes up to about RM18,000, is fortunately covered by the patient’s medical policy. If he did not have a medical plan, he would have to fork out the amount to cover his bill!

There are also certain critical illnesses such as cancer or kidney disease which require more medical attention such as outpatient treatments, alternative medicine and etc. These costs are usually not covered under a medical plan.For example, if the patient above suddenly has a stroke, he would be hospitalized immediately. His post-stroke paralysis means he cannot resume working after that. Critical Illness insurance plan helps the patient go through life with a lump sum payment. This amount can then be used for anything, not restricted to medical treatment (which a medical insurance would already cover).

What does it do?	Medical plan pays for the cost of treatment and medication of a hospitalization	Critical illness plan provides a lump sum payout upon diagnosis of one of 36 critical illnesses, total and permanent disability or death
What can I do with the pay out?	Pay for medical cost of treatment or hospitalization	The patient can use the lump sum payout for anything they want, not restricted to medical treatment. For example, some use it to help their family’s financial situation.
Coverage until?	Until age 100	Until age 85 or death
Who does it most benefit?	The policyholder (and his family, if plan covers family) as it helps pay for their medical treatment	The policyholder and/or their dependents, depending on use of payout
What is the premium payment like?	Premium increases with age	Premium remains the same throughout lifetime

Back to the earlier true or false question – everyone needs medical coverage for the unexpected emergencies and medical help. This is especially important today, when medical care can be costly and unplanned for. Meanwhile, critical illness provides an extra cover of protection for 36 most common and critical illnesses, and helps to address other possible financial needs you may have through the lump sum payout. For example, if you are unable to work because of the illness, the payout can be used as your income replacement during that time of recovery.

Which coverage you choose for yourself and your loved ones, depends on what you are looking to protect yourself from. Stay informed and educated, and find out more about our Critical Illness and Medical insurance here.