Medical insurance pays only the hospital bills.
Critical illness cover pays for everything else.
1. Introduction - Act Now, Don't Leave It Until It's Too Late.
2. What is Critical Illness Cover?.
3. Critical Illness Cover Is Different To Medical Insurance.
4. Why Is Critical Illness Cover So Important?.
5. Why Is Critical Illness Cover Essential for Expats?.
6. Why Is A 'Portable' Critical Illness Policy Important for Expatriates?.
7. People Are Living Longer - But With More Disability.
8. The Top Causes of Death Are Also The Top Causes for Critical Illness Insurance Claims.
9. What's The Difference Between Critical Illness and Terminal Illness?.
10. Incidence Rates Of Non-Communicable Diseases Vary By Country.
12. How Much Critical Illness Cover Do I Need?.
13. Why Critical Illness Cover Is Essential For Business Owners
14. I Have No Dependents - Why Do I Need Critical Illness Cover?
15. I Am A Stay-At-Home Parent, Do I Need Critical Illness Cover?
16. I Already Have Savings - Why Do I Need Critical Illness Cover?
17. Critical Illness Cover Is Different To Life Insurance
18. Critical Illness Cover Is Not The Same As Income Protection
19. What Affects The Cost Of Critical Illness Cover?
20. I Am A Smoker - Will Critical Illness Cover Be Too Expensive For Me?
21. What Illnesses Are Excluded From Critical Illness Cover?
22. What If I Have A Pre-Existing Medical Condition?
23. What If I Have A Dangerous Job or Leisure Activity?
24. Will I Need A Medical Examination?
25. How Do I Buy Critical Illness Cover?
26. Can I Buy Critical Illness Cover From My Bank?
27. In What Currency Should I Get My Critical Illness Cover?
28. How Do I Pay for Critical Illness Cover?
29. How Long Should I Buy Critical Illness Cover For?
30. I Already Have Critical Illness Cover, Can I Switch For A Better Deal?
31. Is Critical Illness Cover Worth it?
32. Conclusion - Critical Illness Cover Is An Investment In Your Future Self
1. Introduction - Act Now, Don't Leave It Until It's Too Late
If you don't yet have critical illness cover, but are considering, it is important to act now rather than later.
Why?
The younger you are, the cheaper it is. The cost of critical illness cover is lower when you are younger and healthier. If you wait until you are older or have health issues, the cost of the premiums will be higher, or you may not be able to get coverage at all.
Illness can strike at any time. Unfortunately, no one can predict when they might fall seriously ill. If you wait until later to purchase critical illness cover, you risk being caught off-guard by an unexpected diagnosis, and you may not have the financial resources to cope if you cannot work.
Purchasing critical illness cover sooner rather than later will provide you with financial protection and peace of mind. Don't wait until it's too late - act now to ensure that you and your loved ones are covered in case of a critical illness.
2. What is Critical Illness Cover?
Critical illness cover (CIC), also called critical illness insurance, pays you a cash lump sum if you are diagnosed with one of a list of serious illnesses or conditions. You can use the cash payout for anything you like.
The specific conditions covered depend on the policy, but might include: stroke, heart attack, coronary artery by-pass surgery, major organ transplant, major cancers, Parkinson's disease, Alzheimer's disease, multiple sclerosis, traumatic head injury, or blindness, for example.
Many policies also cover permanent disabilities as a result of injury or illness. Additionally, some policies may offer smaller payouts for less severe conditions, or if one of your children has one of the specified conditions.
Once the policy has paid out the cash lump sum, cover ceases and the policy comes to an end.
3. Critical Illness Cover Is Different To Medical Insurance
Critical illness cover serves a different purpose, and shouldn't be confused with Medical insurance or health insurance. Medical insurance exists only to pay for your hospital bills and healthcare treatment. On the other hand, the cash payout from a critical illness policy can be used for all the other expenses you have, if you cannot work due to a serious condition.
A Cash Lump Sum to Pay Off Debts and Cover Your Income Needs
The cash lump sum payout from critical illness cover can be used for anything you want - such as rent or mortgage payments, utility bills, food and living expenses, school fees and travels costs, personal loan and credit card repayments.
Depending on the seriousness of your illness, you may want to make long term adjustments to your way of life. For example, changes to your home, hiring a home-helper, or maybe relocation back to your home country.
Critical illness cover delivers an important psychological benefit. The protection of this policy mitigates the financial impact of coping with a major illness, meaning that you can focus on the recovery process, without potentially huge stress arising from loss of income.
Pay For Advanced or Alternative Treatments Not Covered By Medical Insurance
Standard medical insurance doesn't cover emerging new treatments, that are often very expensive and not yet mainstream. Similarly, many types of alternative treatments, such as acupuncture, chiropractic care, massage therapy, traditional Chinese medicine, and homeopathy, are not covered by medical insurance.
In contrast, since a payout from a critical illness policy can be used for anything you choose, this could include emerging treatments and alternative medicines.
4. Why Is Critical Illness Cover So Important?
Critical illness cover is important because of the relatively high chance of being diagnosed with a serious condition, combined with the high impact to us and those around us when it happens.
High Chance of Serious Illness, And Surviving
As a result of medical advances, more and more people worldwide are surviving serious illnesses. Statistics show that a non-smoking adult male is four times more likely to get a serious illness and survive (so no life-insurance payout), than he is to die during his working lifetime.
High Impact on Financial Situation
Advanced treatments for serious illnesses, together with recovery times, can last months or years depending on the condition. For example, a course of chemotherapy usually lasts between 3-6 months, and specialists suggest allowing two months subsequent recovery time for every one month of treatment.
For most people, not being able to work for many months would have a disastrous effect on finances, without critical illness cover to cushion the financial impact.
5. Why Is Critical Illness Cover Essential for Expats?
Critical illness cover is popular and common in most parts of the world. But for expatriates living and working away from their home country, it is especially important. This is for two reasons. Firstly, employment law in common expatriate locations is not to the same standard as our home country, and may not even apply to expat contracts. Secondly, government allowances and benefits available to locals are rarely provided to foreigners.
If you get sick and can't work, how long will your employer pay your salary for? You may be surprised to learn that just 30 days full salary is most common. Depending on the country, statutory sick pay might continue at a reduced rate (for example, 50%) for a few more weeks, but then finishes.
In your home country, people who can't work due to long term illness would then typically have access to government allowances and state support. But if you are a foreign worker overseas, in most situations you cannot rely on this safety net.
As a professional expatriate working overseas, making plans for such a scenario is down to you.
6. Why Is A 'Portable' Critical Illness Policy Important for Expatriates?
There are two crucial aspects to portability of your critical illness cover. Firstly, make sure that you are the actual owner of your own policy. This means that if you change jobs then your coverage is not lost, as would be the case if the policy was provided by your current employer as a benefit. (This also applies to life insurance, or employers 'death in service benefit'.)
Secondly, your policy should be international, meaning that insurance cover continues even if you move to a new country. If a new career opportunity comes up in a different location, you want to be able to take advantage without worrying about losing critical illness cover.
This is one of the key reasons why international insurers are often recommended for expatriate critical illness policies, rather than local providers.
7. People Are Living Longer - But With More Disability
People are living longer. In 2019, a study by the World Health Organisation (WHO) shows people were living more than 6 years longer than in 2000, with a global average of more than 73 years in 2019 compared to nearly 67 in 2000.
But not all those extra years are in good health - disability is on the rise.
The diseases and health conditions causing the most deaths are also responsible for the greatest number of healthy life-years lost. Healthcare advances improve the chance of medical intervention saving lives, but good health is not assured.
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8. The Top Causes of Death Are Also The Top Causes for Critical Illness Insurance Claims
According to the World Health Organisation (WHO), the top five non-communicable diseases causing death (i.e. excluding communicable diseases such as HIV, COVID, and injuries) are cardiovascular diseases, cancers, chronic respiratory diseases, diabetes, and dementia.
The table below gives the percentage of global deaths by each of these categories of non-communicable diseases, broken down by male, female, and both sexes.
Table - Percentage of Global Deaths By Non-Communicable Disease
| Cause of Death | Male | Female | Both Sexes |
|---|---|---|---|
| Cardiovascular diseases | 35% | 29% | 32% |
| Cancers | 21% | 15% | 18% |
| Chronic respiratory diseases | 6% | 5% | 6% |
| Diabetes | 4% | 3% | 3% |
| Dementia (inc. Alzheimer's) | 2% | 3% | 2% |
Source: WHO, 2019.
Cardiovascular diseases: Cardiovascular diseases affect the heart and blood vessels, and can include conditions such as coronary artery disease, heart failure, stroke, and high blood pressure. Risk factors for cardiovascular diseases include smoking, high cholesterol, high blood pressure, and obesity.
Cancers: Cancers are characterized by the uncontrolled growth and spread of abnormal cells in the body. There are many different types of cancer, which can affect different parts of the body. Risk factors for cancer include smoking, alcohol consumption, diet, physical inactivity, exposure to certain chemicals or radiation, and family history of cancer.
Chronic respiratory diseases: Chronic respiratory diseases affect the lungs and breathing. They include chronic obstructive pulmonary disease (COPD), asthma, and pulmonary fibrosis. Risk factors for chronic respiratory diseases include smoking, exposure to air pollution or chemicals, and respiratory infections.
Diabetes: Diabetes is a chronic condition characterized by high levels of sugar (glucose) in the blood. There are two main types of diabetes: type 1, which is caused by an autoimmune disorder that damages the pancreas, and type 2, which is caused by a combination of genetic and lifestyle factors. Risk factors for diabetes include obesity, physical inactivity, and family history of the disease. Diabetes can lead to a range of complications, including heart disease, stroke, kidney failure, and blindness.
Dementia: Dementia is a group of brain disorders that affect memory, thinking, behavior, and emotion. Alzheimer's disease is the most common cause of dementia. Symptoms can include memory loss, difficulty communicating, mood swings, and changes in personality. Dementia itself does not directly cause death. As the disease progresses and cognitive function declines, individuals with dementia can become increasingly vulnerable to other health problems that can contribute to death.
The WHO estimates that about 28% of premature deaths by these non-communicable diseases occur before the age of 70.
9. What's The Difference Between Critical Illness and Terminal Illness?
Critical illness refers to a severe medical condition that requires immediate and intensive medical treatment to prevent potentially life-threatening complications. Examples of critical illnesses include heart attack, stroke, cancer, and organ failure. While critical illnesses can be very serious and require immediate medical attention, they do not necessarily result in death.
Self-evidently, the non-communicable diseases that cause the greatest numbers of deaths are also the cause of the majority of critical illnesses, and are the reason for the majority of critical illness policy claims across the global insurance industry.
Terminal illness, on the other hand, refers to an advanced medical condition that cannot be cured or adequately treated, and is expected to result in death within a relatively short period of time. Examples of terminal illnesses include advanced-stage cancer, end-stage organ failure, and some neurological diseases.
10. Incidence Rates Of Non-Communicable Diseases Vary By Country
The table below shows the probability of dying between the ages of 30 and 70, from cardiovascular disease, cancer, diabetes, or chronic respiratory disease (i.e. not including dementia).
Table - Probability Of Dying Between Ages 30 And 70 From One Of The Global Top Four Non-Communicable Diseases, By Country
| Country | Male | Female | Both Sexes |
|---|---|---|---|
| Australia | 10% | 7% | 9% |
| Bahrain | 16% | 15% | 16% |
| Brazil | 19% | 13% | 16% |
| Czechia | 19% | 10% | 14% |
| Denmark | 13% | 9% | 11% |
| Egpyt | 33% | 23% | 28% |
| France | 14% | 7% | 11% |
| Germany | 15% | 9% | 12% |
| India | 25% | 19% | 22% |
| Kenya | 23% | 20% | 21% |
| Lebanon | 24% | 15% | 20% |
| Malaysia | 22% | 15% | 18% |
| Mexico | 18% | 13% | 16% |
| Netherlands | 12% | 9% | 10% |
| Norway | 10% | 7% | 9% |
| Philippines | 30% | 19% | 25% |
| Russia | 35% | 15% | 24% |
| Saudi Arabia | 22% | 18% | 21% |
| South Africa | 28% | 20% | 24% |
| Thailand | 17% | 11% | 14% |
| UAE | 20% | 15% | 19% |
| UK | 12% | 9% | 10% |
| USA | 16% | 11% | 14% |
| Vietnam | 29% | 14% | 21% |
Source: WHO, 2019 data. Per cent of 30-year-old-people who would die before their 70th birthday
from any of cardiovascular disease, cancer, diabetes, or chronic
respiratory disease, assuming that s/he would experience current mortality
rates at every age and s/he would not die from any other cause of death
(e.g., injuries or HIV/AIDS).
The chances of getting a critical illness are naturally much higher than the chance of actual death. For example, a non-smoking male is four times more likely to get a serious illness than he is to die during his working lifetime. That is, a higher than 50% chance for the global average male.
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11. "How Long Have I Got?"
The average treatment time before death or recovery for each of these five categories of disease varies widely depending on the specific disease, the stage of the disease at diagnosis, the age and overall health of the patient, and the effectiveness of available treatments.
For example, some types of cancer can be treated with surgery, radiation, and/or chemotherapy over a period of months or even years, while other types of cancer may progress more rapidly and require more aggressive treatment. Similarly, some people with cardiovascular disease or diabetes may require ongoing treatment over many years, while others may be able to manage their condition with lifestyle changes and/or medication.
Some diseases may not have a cure and require ongoing management and treatment to maintain quality of life, while others may be more easily treatable or even reversible with appropriate care.
12. How Much Critical Illness Cover Do I Need?
Ask yourself what costs you'd need to cover if you had treatment for a serious health condition and couldn't work. These might include:
- A mortgage or rent
- Credit cards and loans that you're paying off over time
- School fees, childcare or other costs for your dependents
- Regular bills, like gas, electricity and water, local taxes, and car insurance
- Any expenses for adapting your home, or travelling to hospital for treatment, or private medical care
- General living costs, like food, bills and petrol
As a guide, experts suggest buying critical illness cover sufficient to replace two years of income, especially if you have debts or other financial obligations. Cover for one year of income is a bare minimum for most. If you are relatively young or in the early stages of your career, you may wish to obtain a higher level of cover at a good price right now, since the cost of buying a new policy rises with age.
When deciding how much critical illness cover to purchase, it's a good idea to seek advice from your broker or financial advisor.
13. Why Critical Illness Cover Is Essential For Business Owners
Critical illness cover is essential for business owners because it provides financial security and stability during a time of medical crisis. As a business owner, the health of your business is closely tied to your personal health, and a critical illness can have devastating financial consequences for both you and your company.
If you were to suffer a serious illness such as cancer, heart attack, or stroke, you may be unable to work and generate income for your business. This could result in a loss of revenue, reduced profits, and potentially the closure of your business.
Additionally, many business owners take on debts during the early stages of company growth. A serious illness could make it difficult to repay those business loans, creating a financially stressful situation (especially in countries with strict laws about debt, such as in the middle east).
14. I Have No Dependents - Why Do I Need Critical Illness Cover?
Even if you have no dependents, you should seriously consider getting critical illness cover.
A critical illness diagnosis can be a stressful and challenging experience, even without dependents. Having critical illness cover can provide peace of mind knowing that you have financial protection in case of an unexpected illness, which can help reduce stress and anxiety. The lump sum payment from a critical illness policy helps replace your lost income during your recovery period, which can preserve your lifestyle and cover your living expenses.
If you are a single expatriate with no family support network close by, a serious illness may force you to repatriate back to your home country. The payout from a critical illness policy can cover those expenses, as well as provide financial assistance if family members need to care for you.
Additionally, if you don't have a mortgage yet, but are thinking about buying a property at some point, consider purchasing critical illness cover now, while it's cheaper (and before occurrence of any future condition). By the way, this also applies for life insurance, because mortgage lenders commonly require applicants to have cover in place.
15. I Am A Stay-At-Home Parent, Do I Need Critical Illness Cover?
As a stay-at-home parent, although you may not have a traditional income, your contribution to your family is essential and invaluable. If you were to become critically ill, your family's financial situation would be greatly impacted due to increased expenses during medical treatment and care.
Critical illness cover will provide financial support during a difficult time, even if you don't have an income to replace. The lump sum payout from a critical illness policy could help cover the cost of medical treatments, in-home care, or other expenses related to your illness.
It could also allow your partner to take time off work to care for you and your children, without worrying about lost income.
16. I Already Have Savings - Why Do I Need Critical Illness Cover?
Having savings is an important part of financial planning, but it may not be enough to cover all the expenses associated with a critical illness.
Depending on the severity of the illness and the length of time it takes to recover, associated costs and expenses can quickly consume your savings. Critical illness cover provides an additional financial safety-net to cover these costs.
By preventing depletion of your savings, critical illness cover helps you avoid the 'opportunity cost' of having to forgo other important financial goals, such as retirement planning, children's education, or saving to buy a home.
Many expatriates choose to work abroad as a way to build a nest-egg before returning home.
Critical illness cover protects your nest-egg, and reduces the likelihood of having to burn through it in case of a serious medical condition.
17. Critical Illness Cover Is Different To Life Insurance
Critical illness cover is usually provided by life insurance companies. Sometimes policies are 'standalone', or sometimes critical illness cover is a 'rider' or added benefit to a life insurance policy. The policy terms of critical illness cover are very different to life insurance.
The concept of life insurance is simple and easy to understand. In event of your death, a life insurance policy pays out a lump sum to your beneficiaries. You should have enough life insurance to cover your financial obligations and provide for your family in the manner you choose.
However, if you get a serious illness and don't pass away, but can't work for an extended period of time while you recover, life insurance has no role to play. This is where critical illness cover pays out.
18. Critical Illness Cover Is Not The Same As Income Protection
An income protection policy is quite different to critical illness cover. Critical illness policies pay out a lump sum, if the policyholder is diagnosed with one several pre-defined illnesses and conditions. In contrast, income protection policies pay out a monthly income, if the policyholder is unable to work due to illness or injury.
Income protection policies have several restrictions, an important one being that payouts are limited to a percentage of the policyholder's salary or a specific dollar amount. Benefits are also restricted to a maximum duration; the length of time that payments are made is a fixed period, for instance two years. Additionally, income protection policies have a waiting period; this can be up to several months before benefits can be paid out.
19. What Affects The Cost Of Critical Illness Cover?
Premium payments for critical illness cover vary depending on the policy and your circumstances.
Critical illness policies cover a range of illnesses, conditions and situations. So it's important to compare what different insurers can offer you.
Cost is affected by:
- Your age
- Whether you smoke or have smoked (including vaping)
- Health - your current health, weight and family medical history
- Job - some occupations are higher risk than others, making the premiums higher too
- Level of cover
- If you're at risk of a particular condition - perhaps because of existing health issues - that illness could be excluded from the policy; or you might have to pay a higher premium
The cost will also depend on whether you pay a reviewable or a guaranteed premium.
What Is Reviewable Premium Versus Guaranteed Premium?
Reviewable Premiums means the premium payment amount is periodically reviewed, usually every five years. At each review point, there's a chance the premium may change, i.e. either increase or decrease, to maintain the same level of cover. You'll be given the choice to accept the change, or in case of increase, keep paying the current premium but opt for a slightly lower level of cover. You can also cancel the policy and stop paying premiums at any time.
A periodic review looks at factors such as claims experience, including the number and costs of claims paid by the insurance company, changed assumptions due to advances in medicine, and possibly your increased age. However, the review is not at the individual level, i.e. does not consider your own personal or medical circumstances.
Guaranteed Premiums , in contrast, remain fixed for as long as you have the policy. These can cost slightly more in the short-term. But many people like the security of knowing they'll be paying the same premium throughout the policy term.
Naturally, if you request to increase the level of cover during the policy term, or add riders for additional benefits, the premium will change to reflect this.
Additionally, if you have chosen an indexation option so that your level of cover increases over time to offset inflation, then your premium will automatically increase in line.
What Is Indexed Cover?
An indexed cover critical illness policy provides coverage in the event that the policyholder is diagnosed with a critical illness, with the coverage amount being linked to an index, such as the Consumer Price Index (CPI), rather than being a fixed amount.
This type of insurance policy may be appealing to those who want to ensure that their coverage keeps pace with inflation, but it may also be more expensive than traditional fixed-amount policies.
What Is Waiver of Premium?
If you pay a bit extra to add a 'waiver of premium' to your policy, your monthly premiums will be covered automatically if you can no longer work due to illness or injury. This is to protect against your policy being cancelled if you miss some monthly payments. However, it usually kicks in only after you've been off sick for at least six months. Waiver of premium is more commonly a rider for traditional life insurance, than for critical illness cover.
20. I Am A Smoker - Will Critical Illness Cover Be Too Expensive For Me?
The opposite is probably true. If you are a smoker or vaper, critical illness cover is especially important. Most smokers can't afford Not to have critical illness cover.
Smoking is a significant risk factor for several non-communicable diseases, including lung cancer, heart disease, stroke, and chronic obstructive pulmonary disease. According to the WHO, smokers are up to four times more likely to die from these diseases than non-smokers. The risk increases with the number of cigarettes smoked per day and the duration of smoking.
The cost of premiums is therefore higher for smokers than for non-smokers, for an equivalent level of cover. This reflects the obvious reality that smokers make proportionately more critical illness claims, being more likely to develop serious diseases, and more likely to require hospitalization and other medical interventions than non-smokers.
A higher premium is the price paid for financial protection that smokers are much more likely to need.
Thinking of Quitting Smoking?
If you are planning to stop smoking, don't let that prevent you from getting critical illness cover right now. In the future, when you have quit successfully, you can re-apply for a new policy and your premiums will be much cheaper. In the meantime, you have cover in place should the worst happen.
Quitting smoking can significantly reduce the risk of developing non-communicable diseases, and improves overall health outcomes.
21. What Illnesses Are Excluded From Critical Illness Cover?
Not all conditions are covered, as this would make the policy too expensive. Common exclusions include non-invasive cancers, hypertension (abnormally high blood pressure), and injuries such as broken bones. Policies will also state how serious a condition must be to qualify for a payout.
Also note, any injuries or illnesses that are intentionally self-inflicted are generally not included in a critical illness cover policy. The same is true for injuries or illnesses that result from participating in illegal activities or engaging in criminal behaviour.
22. What If I Have A Pre-Existing Medical Condition?
If you have a pre-existing medical condition, it doesn't automatically mean you can't get critical illness cover. Discuss with your broker or financial advisor the nature of your condition and it's severity, and they will be able to advise you about options.
It's essential to declare any pre-existing medical condition in the health questionnaire accompanying your application for critical illness cover. If the insurance company needs further information, they may ask for copies of hospital records, or may request you attend a medical examination. Based on their findings, there are four general outcomes:
1. You are offered standard cover at standard premium amount
2. You are offered standard cover but with an exclusion relating to your specific condition
3. You are offered standard cover but at an increased ('rated') premium
4. Offer of cover is declined
Remember that most insurers do want to find a way for you to become a customer, if it all possible.
23. What If I Have A Dangerous Job or Leisure Activity?
If you have a potentially dangerous job or leisure activity, it is important to discuss with your broker or financial advisor, so they can advise you as to best options for critical illness cover.
Excluded hazardous occupations might include jobs that involve exposure to hazardous materials or dangerous equipment, such firefighters, police officers, miners, and construction workers.
Excluded extreme sports might include skydiving, bungee jumping, rock climbing, and any other activities with a higher than average risk of injury or death.
24. Will I Need A Medical Examination?
When applying for critical illness cover, you may be asked to attend a medical examination depending on factors such as your age, the level of cover, your responses to the health questionnaire, and the business policy of the insurance company.
It can be possible to get critical illness cover with no medical, if you are relatively young, in good health, and applying for a cover level below the 'no medical' threshold of the insurer.
On the other hand, some insurers have a blanket requirement for certain tests, such as HIV/AIDS, or cotinine (a tobacco marker).
Who Pays For My Medical?
In many developed markets, insurers have direct billing relationships with medical clinics, and all you need to do it show up for your examination. Insurers often have a panel of preferred clinics, and your insurance broker or advisor will be able to guide you.
In some locations, you may need to pay out-of-pocket for the medical exam, and then the insurer will reimburse you either directly, or by discounting the first premium payment.
25. How Do I Buy Critical Illness Cover?
Unlike some other forms of insurance, critical illness cover is less available to purchase directly online; policies that are found online can be very basic with low cover. This is because critical illness cover can be a complicated product, with several available policies, each with different features and a variety of options. The most suitable product is unlikely to be "click-to-buy".
For regulatory reasons, and the duty of care that insurance companies have towards customers, critical illness cover usually must be bought through licensed insurance brokers and financial advisors, that have been duly authorised by the insurer. This may stipulate that the broker has suitable qualifications in insurance, plus attended training on the specifics of the products under consideration.
The best way to ensure that you buy the most suitable critical illness cover policy is to get advice from an independent financial advisor or specialist broker. They will take you through the details of the policies and options available, and help you to select the right policy and cover for your needs.
Insurance brokers and financial advisors might charge a fee for their services, or they might be paid in commission by insurance companies. Insurance product costs are standardised and you'll receive the same quotations whichever broker provides them.
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26. Can I Buy Critical Illness Cover From My Bank?
Some banks offer critical illness cover as part of their suite of insurance products. However, keep in mind that you will have more limited options than if you were to buy from an independent insurance broker, because banks typically offer only a few policy options or may only work with one insurance provider.
Note also that banks may have stricter medical requirements or may not cover certain medical conditions. Therefore, it's important to read the policy documents carefully and understand the terms and conditions before deciding.
To ensure you're getting the right coverage at a fair price, it is worth speaking with an independent broker or financial advisor to explore all of your options.
27. In What Currency Should I Get My Critical Illness Cover?
Critical Illness Cover policies designed for expatriates can be available in major currencies such as US Dollar, British Pound Sterling, and Euros. Depending on your location, they may also be available in local currencies such as Emirati Dirhams, or Hong Kong Dollar.
The majority of expats prefer to use USD, or sometimes GBP/EUR if it reflects their home currency. The US Dollar is the world's dominant currency, and substantially more global trade and financial transactions are carried out in USD than any other currency. Buying insurance cover in USD gives the best chance that any future payout won't be devalued in purchasing power terms due to currency movements.
If buying a critical illness cover is possible in local currencies, there is less certainty about the status of that currency at time of any payout. Even a 'pegged' local currency could have that protection removed in the future.
28. How Do I Pay for Critical Illness Cover?
All major worldwide insurance companies allow automatic payment by credit card deduction. Some companies allow payment by bank standing order too. With many insurance providers, you have the option for monthly, quarterly, or annual payments. Choosing one of the last two options may give a slight cost discount.
29. How Long Should I Buy Critical Illness Cover For?
Insurance companies have a maximum age limit for critical illness cover; for example, 70. This is because, simply put: the older you are, the more likely you are to develop a serious illness.
Consider a critical illness policy that covers you until you reach a certain age (such as 70), or perhaps a target retirement date Take into account your long-term financial commitments, such as mortgage and other loans; critical illness cover should certainly extend past completion of these liabilities as a minimum.
30. I Already Have Critical Illness Cover, Can I Switch For A Better Deal?
It's always worth looking around for a better deal, particularly while you're still in good health.
You can switch to another provider, or perhaps stay with the same one and change policy. Either way, make sure you understand any changes in the new policy details and the conditions they cover.
If you're quite a bit older than you were when you bought your first policy, you may find yourself paying a little more, even though you have better cover and terms.
If you decide to change policies, make sure not to cancel the old one before the new has started, to ensure continuity of cover.
31. Is Critical Illness Cover Worth it?
Like any insurance policy, critical illness cover comes with a cost. You'll need to weigh the monthly or annual premiums against the benefits, to determine if it's worth it for you.
For many expatriates, the financial impact of not being able to work due to a health condition would be a disaster, and the peace of mind from owning a critical illness policy safety-net is most definitely worth it.
32. Conclusion - Critical Illness Cover Is An Investment In Your Future Self
As young adults in the early stage of a career, it is easily to feel indomitable, or that we have nothing to lose. It can be hard to visualise the lifestyle and financial impact of a serious illness. But as we get older, the realities of life, work, and health present themselves more clearly.
Unlike life insurance, which benefits your dependents when you are no longer around, critical illness cover is ultimately for your own benefit.
Critical illness cover is an investment to protect your financial stability, your lifestyle, your family, and the hopes and dreams of the future you.