She has 3 policies but no coverage (TNP, 31 Aug 2010)

This article was recently reported in The New Paper. In summary, the lady had spent about $600 per month in her insurance but her claims was rejected when she was diagnosis with an early stage cancer. A typical cancer definition excludes carcinoma-in-situ which is the medical terms for early stage cancer. For a cancer claim to be paid, it must diagnose as either malignant and/or at an uncontrollable growth which is commonly known as spreading in layman terms.

It is clearly seen that there is a gap between the initial stage of cancer to the stage that it will be paid. There are many insurance companies that launch plans that are known as ‘Early Critical Illness’ (ECI)plan to cover this gap.

The main illness in critical illness that most people can think of is cancer but do note that there are 29 other illness such as stroke, kidney failure, heart attack etc.

For a male non-smoker age 34, the annual premium for an ECI plan will cost about $1693 for Company G & $186 for Company T. Do note the premiums are not inclusive of any basic plan that maybe required to cover for this early payout. The first question that comes into anyone’s mind will be why it’s so cheap for Company T.

The pros of Company G is it covers for early payout of the 30 critical illness and the cons is obviously the premium. The pros of Company T is the premium and the cons is that it restrict the early payout for cancer ONLY. Is it then worth paying a very low premium to be restricted just to cancer or should we pay a hefty premium for a more comprehensive cover? My personal view is that these ECI plans are consider ‘luxurious item’ in insurance planning. The reason for saying that its luxurious is because the bills of treating these early critical illness usually will not cost more than $50,000. A biopsy to treat CIN-1/2 with a private gynae may even cost less than $20,000 and most important is that these medical bills can be offset with a comprehensive hospital plan and the premium may cost lower.

However if we have some excess budget after a comprehensive planning, there is no harm putting an ECI plan in place. We can see from the article that although the medical bills of $30,000 was settled by her medical insurance, not many will complain if we are also getting additional lump sum of $10,000 or more as payout to offset loss of income, buy tonics or go for a short holiday after the ordeal. So again, the question of is it then worth paying a very low premium to be restricted just to cancer or should we pay a hefty premium for a more comprehensive cover? A quick questionnaire that can decide which option is better for you is – Do you go for a full medical checkup annually?

Most male does not have an annual checkup done unless it is by their company’s requirement. Most females will not have an annual checkup done other than the usual pap smear or mammogram. The point I am stressing on is there will almost be no chance to pick up of these critical illness at the very initial stage unless you have the habit of doing a full medical checkup done. If  you decide to seek medical advice only when you feel sick or when you notice symptoms of certain critical illness then most likely it is at an advance stage and any typical critical illness plan would pay anyway. How many cases of heart patients suffer a cardiac arrest without they knowing they have heart problem? How many kidney failure patients we heard of knew their kidney had failed before they had blackout and was sent to hospital.

Thanks to pap smear & mammogram, these medical test had saved thousand if not millions of female lives by detecting cancerous growth in the female reproductive organs and the breast at a very initial stage. With this, I can safely say that if you are someone who do nothing more than pap smear & mammogram, you can consider taking a ECI plan that restrict to cancer only. There are also female illness plan which can be even more affordable because they are even more restrictive that it must be due to female related illness such as carcinoma-in-situ of the cervix, Uterus , breast etc. You may want to consider opting for a more comprehensive ECI plan if you are one who does more than these test in an annual checkup for e.g conducting a blood profile test that will show signs of abnormality to many illnesses, ECG that picks up abnormal heart activities which indicates heart problems.

Most importantly, I strongly encourage an individually to get a comprehensive medical plans follow by the coverage depending on an individual’s needs and lastly to have a ECI plan. It is always good to talk to your adviser every 1 to 2 for a review. You can initiate the review without the advisor to do it. Of course… what you are thinking now is that ‘ Am I so stupid to initiate an appointment for an agent to sell me something??’ My reply to that question is, if the agent needs you to initiate an appointment to upgrade your cover then it is time to move on to another adviser. He is not doing his job which is to ensure every of his client should be sufficiently covered.

 It is a strange human nature that every few years, we will review our cars, our houses and our income. We review to upgrade to a faster car, a bigger house and a higher income but we failed to review our policies which could be the only financial resources to keep our car, our house and our income.