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Critical illness coverage - do I need it?
Posted on Nov 05, 2015 by Rob McBroom
UAE Medical Insurance looks at critical illness coverage and if people living in Dubai can benefit from it.
In an article published earlier this summer, UMI interviewed Maria Loughran, our Corporate Account Manager in Dubai about life insurance. While there were many points covered about life insurance, one resonated with our audience and that was critical illness cover. We have had a number of inquiries about this in the past few months and have written this article in response to the most common questions people have in regards to critical illness coverage.
What is critical illness and critical illness coverage?
First, it would be a beneficial to define what, to insurers, qualifies as 'critical illness'. Most insurers follow a definition similar to that found on the UK's Financial Ombudsman Service website, "Critical illness is a life-threatening condition, which is generally strictly defined." Some of the more prevalent critical illnesses include:
- Heart attack
- Late-stage cancers
- Conditions like Multiple Sclerosis
For people suffering from a critical illness, there is little to no chance that they will be able to support themselves or their family financially while recovering. That is where critical illness coverage comes in. Usually attached to a life insurance plan, this type of coverage issues a lump sum payment to you or a beneficiary with the idea that the payment be used to cover hospital and living costs while you recover.
Is critical illness coverage important?
If you are currently healthy and financially stable it may not seem like critical illness coverage is important or even necessary, but the fact of the matter is we will not all be healthy forever. Beyond that, critical illnesses are usually incredibly expensive to cure and can put a financial strain on even the most financially sound.
But it's not just the cost of health care that makes critical illness plans viable. The lifestyle of many in Dubai and the greater UAE has resulted a rise in serious diseases. For example, according to Intelligent Health, "In 2013, 850 heart-attack patients were admitted to Rashid Hospital in Dubai. A troubling statistic in itself, the even more sobering news was the average age of the first-time heart attack patients. Whereas the global average is 65 years, the average age of the Rashid Hospital patients was 45 years."
The cost of care combined with the increased potential of critical illness in Dubai means that for many, critical illness coverage should be something to consider.
What makes a sound critical illness plan?
Critical illness plans, like many other insurance options, cover a wide variety of options. This can make it hard for the first time buyer to secure the best plan for them. Some of the most important things to consider when looking for an ideal plan are:
- The illnesses covered - This is arguably the most important thing to consider. In the definition above we noted that insurers strictly define critical illness, this means that insurers will have a specific list of what they deem to be critical illnesses and explicitly define the condition. Beyond that, different insurance companies will offer different levels of illness coverage and different lists of what is covered. And, as with many other types of insurance some conditions will be excluded. For example, genetic conditions and conditions caused by drug or alcohol abuse are usually not covered. To find the best plan look carefully at what is covered, how conditions are defined and what is excluded.
- How claims are filed - The claims process is an important part of any kind of insurance. It is important that you know how to submit a claim with the required documents, when to submit a claim, and how payments are reimbursed.
- When payment is made - It is also key to know when payments are made. Some insurers will issue the lump sum soon after you are diagnosed, others after a certain waiting period. This is important as it can help you budget - if you know that you won't receive payment until say 6 months after diagnosis then you can budget for those 6 months.
- Benefits offered - Different providers will also offer different benefits in relation to critical illness covered. For example if you renew your plan and have not submitted any claims you may be able to get a discount on the premium, or you may be able to increase coverage limits.
- The hospital network the insurer works with - Some insurers will only offer 100% payouts if you receive care from a hospital included in their coverage network. This means that if you visit one not included, there is a good chance you will not receive the full payment, or may have to wait longer. This is especially important if you have health insurance as well, as it could be easier on you to receive care at a facility where both your health insurance and life insurance are accepted.
- Flexible sum assured - The sum assured is the amount the insurer will pay when a claim is submitted. It is important to figure this amount out ahead of time, and most experts suggest that the sum assured be up to two years of income. Be sure to consider current expenditures, insurance coverage, and whether your employer will cover any lost time or hold your job while you recover.
- Standalone vs rider - Generally, critical illness coverage can be secured two ways: Standalone (purchased strictly as critical illness coverage) and as a rider (included as an additional coverage element in another form of insurance, most commonly life insurance). For the most part, the conditions of coverage are the same for the two options, the main difference is really whether you want additional coverage or not. For example, if you have life insurance through your work, then standalone may be more beneficial as it will retain the coverage if you leave your job.
How do I secure critical illness coverage?
There are a wide variety of insurance providers offering critical illness coverage in the UAE and Dubai, and as we noted above, plans can be quite varied. In order to secure the best plan for your needs it would be a good idea to work with a company like UMI. Our experts can help you find the best plan and advise you on the best way to secure it.
Is there anything else I can do to minimize the cost impact of critical illness?
One of the best things you can do to minimize the cost of a critical illness is to also secure a robust health insurance plan. These plans can help cover costs of medical care which means the lump sum you receive can be used to pay off other costs including living expenses.
If you are looking for a complete solution, why not contact the experts at UMI. By working with you, we can help uncover the best insurance solution for your needs. Contact us today.