What is early critical illness insurance? A quick guide for Malaysians.

Now the question is why is additional coverage for early critical illness needed, if you already have other insurance plans?

• You already have a medical card

If you already have a medical card, you may wonder whether you need early critical illness insurance. It may seem like an overkill. But there are differences between both plans that you should know about. 

A medical card (hospitalisation and surgical insurance) reimburses your hospital bills, up to your plan's limits, but it doesn't hand you cash to cover things a bill doesn't capture, like a pause in income, transport to treatment, or a domestic helper while you recover.

Early-stage critical illness cover pays you a lump sum on diagnosis, which you're free to use however you need, including on non-medical costs that a hospitalisation plan was never designed to touch.

• You have life insurance

The future is uncertain. You may lead a happy, healthy life and the unexpected may hit your family out of the blue. It’s crucial for every person with dependants to have a life insurance plan. Your dependants usually receive the cash payout from the life insurance policy when you, the insured person, pass away. But if you have early critical illness insurance, you will receive a lump sum payout earlier if diagnosed with a covered early stage of critical illness.

At Great Eastern, we have designed a tool to calculate how much critical illness coverage that you may need according to your lifestyle, treatment expectations and income so you know how much you need to put aside to prepare yourself.

Choosing the right early critical illness insurance

When buying any type of insurance, you should always think about your personal considerations. The same applies to early critical illness insurance.

There's no single right number, but a reasonable starting point is to add up roughly 1–2 years of your income (to cover a career pause during treatment and recovery), plus an estimate of out-of-pocket treatment and non-medical costs your medical card won't reimburse.

From there, adjust for your age, family health history, existing coverage, and how much of that risk you're comfortable carrying yourself versus transferring to an insurer.

Here are some questions before choosing an early critical illness plan:

• What are the medical conditions covered in the plan?
• Do you want to be covered against all stages of critical illnesses - early, intermediate and critical stages?
• How much early critical illness coverage do you need?
  
• What should be the coverage duration of the policy?
• Will you be covered if there is an illness relapse?
• Is there a waiting period, and how long is it?
• What percentage of the sum assured is paid at the early stage, and how much is left for later claims?
• Is it a standalone plan or a rider? If it's a rider, does a claim reduce your base life or medical coverage?

Let's recap on what we know about early critical illness insurance plans

1. Is it worth buying early critical insurance coverage?

Early critical illness insurance coverage can be worthwhile, knowing that you will get a lump sum payout if you are diagnosed with covered medical conditions like early stage cancer, or undergo covered procedures for stroke or heart attack, which can be costly to recover from.

Hence, it is crucial to get covered as early as possible, especially when you are young and healthy.

2. Is early critical illness insurance necessary?

Early critical illness insurance will help to pay major expenses after one is diagnosed so that you can focus on getting better and back to normal life in the early stages of critical illness.

3. How much critical illness insurance coverage should I buy?

The amount of coverage should reflect your income or living expenses, at least eight times your annual income.

It also depends on how much you and your family will need to sustain daily expenses, plus any added medical costs during your recovery period. Having adequate critical illness coverage helps by giving you and your family greater peace of mind.

One final note about early Critical Illness Insurance

The earlier a serious illness is caught, the better your odds, and the more options you have. If you're not sure whether your current coverage already includes early-stage protection, it's worth a quick check with Great Eastern’s Life Planning Advisors (LPA), who can walk you through your age, income, family health history, and existing policies to see where the gaps are.