Young, Healthy, No Family Medical History. Do you Need Critical Illness Cover?

If Critical Illnesses usually happen to the elderly, do I really need a critical illness insurance plan when I’m young and healthy?

You hit the gym 5 times a week. Your ideal weekend involves a hiking trail. You can withstand the seasonal flu bug. Your family has no history of critical illnesses. Do you need a medical protection plan that covers you for critical illnesses? If your health history (and your family’s) is spotless, is a plan like that still necessary? 

What is critical illness?

A critical illness (CI) is also known as dreaded disease, and typically refers to one of the 36 common and life-threatening illnesses, such as:

• Kidney failure
• Stroke
• Heart attack
• Loss of speech/sight
• Coma
• Cancer 

While the treatment of these critical illnesses are covered under your existing medical plan, the cost of treatment may exceed your annual or lifetime limit of claims. It is also important to note that the road to recovery for some of these illnesses is extensive, and some (like end-stage kidney failure) are not curable and require life-long treatment. After all, recovering from the common cold is not the same as combating a critical illness.

When a person catches the flu bug and falls sick, they miss a few days of work while recuperating from the flu home. Productivity decreases and the opportunity cost of missing work increases. What then would be the opportunity cost in the event of a more serious health condition, like a heart attack or cancer? Such medical conditions require more than just bed rest at home for a week or two. 

What do I do?

Here is where a critical illness plan comes in: in exchange for monthly premium payments, an insurer will pay a person diagnosed with one of the critical illnesses a certain amount of money, called the lump sum payout. This amount can be used to cover the medical cost of treatment, or personal expenses accrued while that person is away from work when recovering or receiving treatment.

Cancer is especially a costly critical illness to combat. The ASEAN Costs in Oncology (ACTION) study by Sydney-based George Institute for Global Health found that 51% of Malaysian cancer patients suffer from “financial catastrophe” (where medical costs exceed 30% of household income) a year after they were diagnosed due to high cost of treatment and medical spending². The timeline to complete recovery is lengthier compared to other illnesses, and the patient (or their family) would need to have sufficient finances to tide them not just through the course of their treatment but any existing financial obligations such as mortgages, bills and living expenses.

Meanwhile, lesser life threatening illnesses like end-stage kidney failure, for which there is no current cure, require long-term dialysis treatment. This reportedly costs Malaysian taxpayers and individuals involved more than RM700mil a year[1]!

Do I really need it right now?

It is common to think, especially in the prime of one’s life, that you have time on your side and you do not need a critical illness cover. However, critical illnesses do not differentiate between age or gender. Certain behaviours, such as a smoking habit or a sedentary lifestyle are high risk factors for critical illnesses. Closer to home, cases of kidney failure stemming from diabetes is one of the fastest growing among Malaysians. Injuries from incidents and accidents like major head trauma or third degree burns are unpredictable consequences of unexpected events, and require extensive (and possibly costly) medical care.

Having a sound financial plan in place before the unexpected happens is equivalent to having more choices for treatment and recovery.  The choice to take time off from work to focus on a complete recovery. The ability to choose quality healthcare. The privilege to spend time with your loved ones instead of thinking about where the payment for the treatment would come from.

Time may be your best strength, and you can use it to your advantage. The ideal scenario is to be prepared for the unexpected when your best days are still ahead of you, and the next best is to prepare when you are made aware of this. The road to recovery from a critical illness can possibly take months or years, and sound financial backing is critical to protect your wellbeing and the future of your loved ones.