Many of us have experienced the devastating impact of cancer, stroke, heart attack  or other critical illnesses on friends or relatives.

During such challenging times, having support is crucial. One effective way to protect your financial well-being is through a critical illness policy, which offers a lump sum benefit if an individual is diagnosed with a serious illness.

However, there are common misconceptions that often prevent people from considering this coverage. In this article, we aim to clarify these doubts and shed light on the importance of critical illness insurance.

Why should I have critical illness insurance?

As in most developed countries, incidence of critical illness is increasing in Malta, but so too are survival rates. Beyond any statistics, there are personal life experiences of struggle, endurance, acceptance and, increasingly, recovery.

While there continues to be much focus on prevention, early detection and cure, there is increasing attention to the quality of life of people as they go through a critical illness, both during and after their treatment.

The following statements represent a few of the common misconceptions about critical illness insurance:

“Critical illness is a death sentence.”

With the advancements in medical treatments, heightened awareness and prevention campaigns, many critical illnesses can now be prevented or effectively managed.  Some can even be cured.

Moreover, the emphasis on rehabilitation and the support of medical experts means that several individuals who experience critical illnesses can not only recover but also return to a good quality of life.

The journey through a critical illness is indeed challenging, but it’s important to recognise the opportunities for healing, recovery and a positive life beyond the diagnosis.

“My family can help me out if I suffer a critical illness.”

While it is natural to rely on family support during difficult times, it is essential to consider the potential impact on your loved ones. If your family members need to cover your mortgage, childcare costs, or other expenses, it can significantly affect their financial stability. Therefore, having a critical illness policy can ease the burden on your family, allowing them to focus on supporting you emotionally without additional financial stress.

“I’m too young for critical illness cover.”

Critical illnesses can affect people of all ages. Obtaining critical illness coverage at a younger age can be more cost-effective, and it ensures that you are protected if a health crisis arises unexpectedly.

You can face life’s challenges with more peace of mind

“Critical illness premiums are out of my budget.”

Critical illness policy premiums are influenced by several factors, such as the level of cover needed, the duration of coverage and your individual circumstances. By tailoring your policy to fit your budget, you can find a suitable plan that provides the necessary financial protection without straining your finances. The best way to determine the exact premium for your needs is to obtain a quote from a financial planning adviser or online.

The application process

When applying for critical illness cover, the insurer will ask you a series of questions related to your health, lifestyle and coverage requirements. The more accurate and detailed information you provide, the better your financial planning adviser can assess your needs and offer an appropriate policy.

Depending on your specific circumstances, additional information or medical records may be required, ensuring a smoother and faster process in the event of any claims.

Understanding critical illness policies

Critical illness policies are designed to provide a monetary amount to support you and your loved ones in the face of financial challenges due to a critical illness, such as cancer, stroke or heart attack.

The policy will specify the covered critical illnesses and the required severity levels for making a claim. The severity level is determined by predefined medical definitions with some policies also allowing for multiple claims for different stages of illness progression.

For instance, the severity levels for certain types of cancers involved might align with the general classification system commonly adopted by an internationally recognised organisation. These cancers could be categorised into various stages of progression, such as stage 1, stage 2, stage 3 or stage 4 Cancer.

Most policies include the most common critical illnesses like cancer, stroke, heart attack, coronary artery bypass grafting, kidney failure, major organ transplant, coma, paralysis, blindness and severe burns.

Choosing critical illness cover is a responsible step towards protecting your financial well-being and that of your loved ones. By gaining clarity on misconceptions surrounding critical illness policies, you can make a well-informed decision about the coverage that best suits your needs.

Remember to carefully review policy terms and consider seeking advice from financial planning advisers to determine the ideal critical illness policy to your situation.

Additionally, when choosing a life insurance policy, you may want to prioritise companies with a high claims pay-out ratio, as this reflects their track record to fulfil obligations to policyholders and promptly pay out claims.

With this invaluable safety net, you can face life’s challenges with more peace of mind and secure a protected future for yourself and your family.

Josef Camilleri is head of products and distribution at HSBC Life Assurance (Malta) Ltd.