Critical Illness Insurance

Critical Illness Insurance: Expert opinion on how much is enough?

We all know CI protection is vital but how to determine the right insurance coverage? Here are the factors to take into consideration.
Author Bowtie Team
Reviewed By Bowtie Team
Date 2021-01-07
Updated on 2021-09-29
How much coverage is enough?Is Coverage 2 to 3 times my annual salary sufficient?

How much coverage is enough?

The general rule of thumb to determine the sum assured is to multiply annual salary by 2 to 3 times. This is based on the time required to recover from a serious illness. However, everyone’s financial situation is different and therefore should be adjusted accordingly.

There are several key considerations:

  1. Cost of treatments
  2. Living expenses
  3. Other insurance protection, i.e. medical insurance
  4. Personal finances

Is Coverage 2 to 3 times my annual salary sufficient?

Simply applying this basic formula to determine your critical illness insurance coverage can easily lead to underestimating or overestimating the actual coverage you might need. Take colon cancer for example, one of the most common cancers in Hong Kong, the medical treatment fees can range from $500,000 to well over $1 million, depending on the type of treatment and drugs. If your monthly salary is around $18,000, then applying the basic formula of 3 times the annual salary would bring the sum assured to only $648,000. A $700,000 sum assured is just enough to cover the medical expenses but insufficient to also support living expenses. 

If personal or company group medical insurance can cover the basic hospital expenses, and there is enough savings to support living expenses, then the coverage of $700,000 may be sufficient.

Therefore, it’s important to consider the above four factors for the sum insured of critical illness insurance. Like all insurance, it is recommended to buy critical illness insurance while you are young and healthy so that the premiums are lower. This way, even  the insured amount is lower, you can at least benefit from adequate protection while paying lower premiums.

The higher the insured amount, the higher the premium. If there are financial constraints, it is recommended to start with a $500,000 coverage for basic protection. You can always increase the coverage once finances allow. At the end of the day, it is a personal decision that  depends on each individual’s circumstances.


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