Is critical illness insurance necessary if i already have hospitalisation plan?

Hi Anon,

It's a good question that you asked, and often, I see many people confused about CI coverage vs Hospitalization coverage.

The short answer is: Hospitalization coverage covers the hospital bills. CI coverage provides money for your bills.

The long answer? Read on:

When we are talking about hospital bills, it can be anything that arises from a treatment that was done at a hospital, and required you to be admitted. For example, surgery to remove a tumour. The scope of coverage is broad, but as long as you were deemed medically necessary to receive the treatment at the hospital, then you will be covered. So yes, the costs of treatment relating to critical illness at a hospital will be covered as well.

Beyond that, follow up treatments (as well as medical bills incurred prior to admission) will also be reimbursed after you have paid for them. Thus, claims such as follow up chemotherapy, etc, will be paid for by a hospitalization plan. However, do note that you'll still have to pay for your deductible and co-insurance, which requires cash. However, for follow ups, you'll have to pay first, and claim back later. So you'll always be out of pocket.

What about your bills? There are plenty of bills that can occur beyond just the hospitalization bills and follow ups. You will likely suffer a loss of income, especially if you take extended no pay leave to focus on your recovery. Yet, your expenses will keep running. There are plenty of expenses to consider, ranging from food to utilities to even the mortgage on your house. Who's going to pay for that in the event that you really face such a scenario?

On top of that, you may wish to seek treatment that is non-standard, e.g. TCM. Or you might want a second opinion from another specialist. These won't be covered by your hospitalization plan, and you'll need hard cash to pay for those.

A critical illness insurance payout will give you the resources you need to pay for whatever I listed above. Ranging from the co-insurance and deductible, to your family expenses and mortgage, to even vitamin or TCM supplements that aid your recovery, CI payout puts hard cash in your hands to utilize as you see fit.

Thus, CI and hospitalization coverage are very different and they really do go hand in hand with each other.

True enough, in an event of hospitalisation, your hospitalisation insurance will cover a huge part of your hospital bill.

However, hospitalisation insurance won’t cover all your expenses. You will still need to fork out co-payment.

Getting afflicted by CI often leaves people unable to work, leading to great financial burden for themselves as well as their families., especially if you are the breadwinner of the family. According to Life Insurance Association (LIA) it takes about 5 years for a person to recover from a critical illness.

So during a big health emergency, CI insurance protects you from financial trouble and keeps you financially afloat while you recover.