Multiple vs. Single claim
Difference between "Multiple" and "Single" Claims
|Single Claims CI||Multiple Claims CI|
|Premium||More affordable||More expensive|
|No. of Claims||Once||2 times or more|
|Offer long term protection?||No, as it only allows one single claim, even if the critical illness recurs, there will be no compensation||Yes, as it can provide multiple claims, even if the critical illness recurs or other occur, compensation can still be obtained|
|Product design||Relatively simple||Relatively complex, usually with additional claim terms for the 2nd or subsequent claims.|
|Areas of Coverage||Specified severe illnesses as stated in the policy|
In short, Critical Illness Insurance with “Single claim” will only provide a one-time compensation to the insured, and in most cases, the compensation amount is 100% of the sum assured. Critical Illness Insurance with “Multiple Claim” will, on the other hand, provide the insured with more than one compensation, and the insurance company will also pay 100% or a specified percentage of the sum assured (depending on the policy terms).
When it comes to Critical Illness Insurance with “Multiple Claims”, naturally, the insured may expect having protection for all critical illness recurrences. However, term for “Multiple Claims” can be more complicated than you expected, meaning not all critical illnesses are entitled to the multiple claim. These terms help insurance companies to manage risk better while providing more protection but still keeping premiums affordable.
Therefore, Bowtie will explain the complicated terms and limitations for multiple claims in this article, and compare Bowtie Critical Illness Insurance – Multiple Cover with other similar products on the market, and help you to choose the insurance product that fits you the best.
Breaking down Complicated Terms about "Multiple Claims"
Most of the “complicated” terms are related to the “three major critical illnesses.” To make it easier to understand, we will use Bowtie Critical Illness Insurance – Multiple Cover for elaboration.
It is worth noting that the terms mentioned below are not unique to Bowtie products.
You can also refer to policies of other insurance companies.
1. Term 1: “Irrelevant to the previously claimed condition”
Normally, only Critical Illness Insurance with multiple claims that cover more than the “three major critical illnesses” will include this term, the aim is to prevent a series of claims caused by a single critical illness or event.
Example: Suffering from heart disease can cause a series of illnesses and conditions, including arrhythmia, myocardial infarction, and even the need for a second coronary artery bypass surgery.
When you suffer from heart disease, you can certainly receive a critical illness claim.
However, if other conditions occur due to heart disease, and the insurance company has to compensate every time, the risk pool will become strained. In order to manage the risk, insurance companies may have to keep raising the premiums (which is not something that the insured would be happy to see)
Therefore, insurance companies have to design terms that constrain the claims for diseases caused by a single critical illness.
Let’s use a simple example to explain the term and what situations can be claimed:
Mr. Chan suffered a stroke on April 1, 2022, and has been reimbursed for it. However, if he were to suffer another stroke related to the previous one, he would not be able to receive reimbursement as both incidents are related, even after a waiting period of two years.
On the other hand, if the current stroke is newly diagnosed and is proven to be unrelated to the previous one, he can receive reimbursement for the second stroke (100% of the insured amount).
You may ask, how can we prove that the current critical illness is related to the previous reimbursed claim? Doctors can prove whether the two diseases are related through clinical medical analysis.
The insurance company will make claims decisions based on the doctor’s diagnosis.
The term “related” includes:
- Diseases caused by the illness of the previous paid claim or its complications.
- Treatment for the previous paid claim (such as coronary artery bypass surgery after a heart attack)
It is important to note that this term does not apply to recurring cancers. For example, if an insured person receives reimbursement for first-time cancer and then diagnosed with cancer again (including cancer recurrence, spread, or continuation) after a waiting period of 2 years, they can still receive reimbursement even if it is related to the previous cancer.
Term 2: “Received curative care within 12 months” (applies to cancer)
If an insured person experiences cancer recurrence, they need to ensure that they should have received curative care for cancer within 12 months before the recurrence is confirmed to be eligible for a second claim. Curative care refers to surgical treatment, radiation therapy, chemotherapy, targeted therapy, or immunotherapy for cancer but does not include palliative or hormone therapy.
Let’s use two simple examples to explain what situations can or cannot receive reimbursement under this term:
Mr. Chan was diagnosed with lung cancer on April 1, 2022, and received reimbursement. After a waiting period of 2 years, he was diagnosed with lung cancer again, but did not receive curative care within 12 months before the claim. In this situation, he cannot receive reimbursement. However, if Mr. Chan received 10 sessions of radiation therapy within 12 months before the claim, he can receive reimbursement (100% of the insured amount).
Following the previous example, Mr. Chan received reimbursement twice for lung cancer. Afterward, Mr. Chan was confirmed to have fully recovered and cancer cells are no longer detectable in his body, and therefore did not receive any curative care. However, on June 30, 2028, he was diagnosed with colorectal cancer. As this is a newly diagnosed cancer, Mr. Chan can receive reimbursement for the third time.
Why we have to add this term to the policy?
Cancer may sound very intimidating, but with the advancement of medical technology, we can see a rising trend in survival rates of some types of cancer, and negative impacts can be greatly reduced after treatment. Taking prostate cancer as an example, early-stage prostate cancer normally does not have symptoms, and cancer cells grow slowly. Through active monitoring or long-term treatment (including hormone therapy), symptoms can be effectively reduced, and patients can have their life back to normal.
For more severe cancers that significantly affect a patient’s life, doctors will recommend patient to receive curative care. Therefore, “curative care” can also be seen as a benchmark or standard for determining the severity of cancer.
On the other hand, the intention of Critical Illness Insurance is to provide financial support for insured persons who are unable to work due to illness. In other words, a person who has cancer but can still work does not need this financial support. The risk pool will be healthier if the insurance company can control this type of claim.
If you want to use insurance to cover medical expenses, it is recommended to purchase Voluntary Medical Insurance Scheme (VHIS).
Term 3: “Limited by the waiting period for multiple critical illness coverage” (applies to all Critical Illness stated)
This term does not refer to the waiting period of what we normally see in different policies, but rather specifically refers to the “waiting period for critical illness with multiple claims”.
The former refers to the “90-day waiting period,” which means that conditions that arise and surgeries performed within 90 days of the policy’s effective date will not be covered and will only apply to the first claim. The latter refers to a waiting period of “2 years from the date of the previous reimbursement paid” and will apply to the second to fifth claim applications.
This means that, except for new diagnoses, recurrences, spread, or continuation of cancer after the first claim for cancer, other severe critical illness will not be able to receive reimbursement if it happens within 2 years from the date of the last reimbursement.
❓There are many different policies in the Hong Kong market that offer multiple claims without incurring endowment, and some even offer “unlimited” coverage. Then why not all of us just choose insurance with “unlimited”coverage?
We have compared two “unlimited coverage” plans on the market to help you figure out their pros and cons.
Difference between Bowtie CI (Multiple Cover) and CI with unlimited claims
All three plans provide more than one claim of the three major critical illnesses. In addition to the aforementioned “Difficult-to-Understand” terms and limitations, each plan also has its own unique features.
The comparison of the three plans:
|Bowtie CI – Multiple Covers||Company A’s CI (Unlimited Claims)||Company C’s CI (Unlimited Claims)|
|Areas of Coverage|
|No. of Claim and Amount|
|Waiting Period||Waiting period A waiting period of 2 years is applied to each claim||Each claim has a waiting period of 1 year||A waiting period of 1-3 years is applied to each claim for the three major critical illnesses|
|Survival Period||14 Days||N/A||N/A|
- *The three major critical illnesses are cancer, heart disease, and stroke.
- ^The most common critical illnesses receive 100% of the insured amount per claim; early critical illness coverage receives 20% of the insured amount per claim, and multiple critical illness coverage receives 80% of the insured amount per claim.
- #Severe illnesses receive 100% of the insured amount per claim; early or non-severe illnesses receive 20% of the insured amount per claim.
- 1Premiums are based on a 10-year average premium of 10 life and a reference of a 30-year-old, non-smoking male insured for HK$1 million.
- 2Premiums are based on a 10-year average premium of 10 life and a reference of a 30-year-old, non-smoking female insured for HK$1 million.
Frequently Asked Questions
In Hong Kong, the three major critical illnesses (cancer, heart disease, and stroke) account for over 90% of all critical illness insurance claims. Even if a Critical Illness Insurance covers more than 100 critical illnesses, it may not be necessary while resulting in higher premiums.
Although Bowtie’s Critical Illness Insurance only covers 38 critical illnesses, their coverage rate exceeds 98%3. Of course, Bowtie also considers the possibility of a rare critical illness occurring and provides four “additional protections.”
Critical illnesses may recur, with cancer having the highest recurrence rate. However, only few people experience more than five recurrences, but still survive for a long time while receiving support. Therefore, Bowtie believes that providing compensation for up to five claims is sufficient.
It is important to note that “unlimited claims” do not necessarily mean coverage for “recurrence”. For example, company A’s “unlimited plan” for critical illness insurance allows for unlimited claims per insured person during the coverage period, but each critical illness can be claimed only once. This means that if Mr. Chan’s lung cancer recurs, he will not be able to receive more than one claim, and the plan will not be able to cover the recurrence.
Plans that offer “unlimited claims” for the three major critical illnesses often have higher premiums. For example, for a 30-year-old non-smoking male insured for HK$1 million, the average monthly premium for ten years is 2.3 times higher than Bowtie’s Critical Illness Insurance – Multiple Cover.
Therefore, before purchasing insurance, it is recommended to carefully consider the coverage needed and not blindly pursue the number of “covered critical illnesses” or “unlimited coverage”.
Bowtie believes that the purpose of Critical Illness Insurance is to provide financial support to insured persons who are unable to work due to illness. If a person dies within 14 days of being diagnosed with a critical illness, they do not need this financial support.
If an insurance company can control this type of claim, the risk pool will be healthier, and the long-term premium increase will be relatively lower.
If you want to provide financial support for your family, it is recommended to get Term Life Insurance.
Bowtie’s Critical Illness Insurance – Multiple Cover aims to provide financial support for insured persons during the treatment of critical illnesses. Early critical illnesses and Carcinoma in Situ have a lower impact on the insured person’s life, so they are not included in the coverage.
If you want to obtain medical insurance, it is recommended to purchase a Medical Insurance/ Cancer Insurance policy with transparent coverage. When critical illnesses and cancer develop into severe illnesses, Bowtie’s Critical Illness Insurance – Multiple Cover can serve as a second line of defense, providing full coverage for income loss and treatment expenses.
Before purchasing insurance, it is essential to carefully consider the coverage needed and not make a decision solely based on “cheap premiums”.