Definition for “Critical Illness” or “Dread Disease“


Definition for "Critical Illness" or “Dread Disease“

There are various critical illness insurance products on the Hong Kong market, and each plan has different definitions of "critical illness" or “dread disease”. It makes customers hard to compare, and may create misunderstandings. Allow Bowtie to walk you through the common definitions of critical illness, and the protection CI usually gives.

Any Standardized Definition for Critical Illness?

When it comes to “Critical Illness,” many people will naturally think of dread diseases such as cancer, stroke, and heart disease. In fact, the medical community has never established a precise definition of which diseases fall under the category of “critical illness.” 

Only a general definition has been ever given.According to the Handbook of Clinical Neurology, critical illness refers to any disease that poses a threat to life and may lead to the patient’s death in a short period of time if proper medical treatment is lacking.

Basically, most insurance companies will list which diseases are covered under critical illness policies, but the definitions may vary to some extent.

Bowtie is committed to increasing transparency and is the first insurance company in Hong Kong to use international critical illness standards as a blueprint. We list the definitions of various covered critical illnesses on our website to ensure customers can fully understand the definitions of critical illness and how they will be protected before purchasing policies.

What Critical Illnesses are usually covered by Hong Kong Insurer?

As the definition of critical illness”varies among different insurance companies, when comparing different critical illness products, the coverage can be categorized in (1) mandatory coverage, (2) major coverage, and (3) special critical illnesses:

  1. Mandatory coverage

“Mandatory coverage” refers to critical illnesses that almost all insurance companies will cover, including:

  • Cancer
  • Stroke
  • Heart disease
  • Alzheimer’s disease
  • Other severe coronary artery diseases
  1. Major coverage

“Major coverage” refers to dread illnesses that most companies will provide coverage for, such as:

  • Carcinoma in situ
  • Early malignant tumor
  • Renal failure
  • End-stage lung disease
  • Parkinson’s disease
  • Terminal illness
  • Total Permanent Disability
  • Severe burns or scalds
  1. Special critical illnesses

“Special critical illnesses” are diseases that only a few critical illness insurance policies will provide coverage for, such as:

  • Pheochromocytoma
  • Lymphatic filariasis (or known as “Elephantiasis”)
  • Chagas disease
  • Crohn’s disease
  • Polycystic kidney disease

Is it better to have more covered diseases in a critical illness insurance policy?

The answer is no.

In Hong Kong, up to 90% of critical illness claims are for cancer, heart disease, and stroke. 

In other words, even if your critical illness insurance policy covers over a hundred diseases, or even includes various rare diseases, it may not be necessary.

From 2012 to 2015, the most common claims for men and women in Hong Kong were:

  1. Cancer (57%)
    • Liver and lung cancer were the most common
  2. Percutaneous transluminal coronary angioplasty (PTCA) (about 10%)
  3. Heart attack (about 9%)
  4. Stroke (about 7%)
  5. Other severe coronary artery diseases (about 3%)
  1. Cancer (83%)
    • Breast cancer and thyroid cancer were the most common
  2. Stroke (about 3%)
  3. Ductal carcinoma in situ of breast (DCIS)* (about 2%)
  4. Cervical carcinoma in situ (CCIS)* (about 2%)
  5. Percutaneous transluminal coronary angioplasty (PTCA) (about 1%)
  • *Claims related to ductal carcinoma in situ of breast, cervical carcinoma in situ, and PTCA were defined as "non-severe" critical illness claims.

Better to have a higher sum insured in critical illness insurance?

As the awareness of critical illness among Hong Kong people has increased, the  sum insured for critical illness insurance has increased by 46% in just a few years from 2012 to 2015, and the per capita sum insured is approaching HK$600,000, showing a continuing upward trend.

Many people mistakenly believe that the higher the sum insured, the more adequate the protection, but they overlook the claim rate. 

According to surveys, the claims rejection rate in Hong Kong is as high as 13%, which is nearly half higher than that in neighboring Singapore. This surprising fact reflects that the sum insured may not always be correlated to sufficient protection.

Therefore, the sum insured for critical illness insurance does not necessarily have to be higher. Instead, the insured person should prioritize their personal financial ability and actual needs, and purchase sufficient protection with reasonable premiums that may actually be more cost-effective.

In order to create a clear claim guideline, Bowtie made reference to the international standards to design and define the claims terms for our Term Critical Illness insurance. Any of the 38 designated critical illnesses diagnosed and specified in the policy, and meeting any one of the “4 Supplementary Coverages” can receive 100% reimbursement.

Moreover, Bowtie uses technology to reduce operating costs, allowing customers to obtain the same coverage as traditional insurance companies at relatively lower premiums. For example, for a 30-year-old male, the monthly standard premium for every HK$1million of critical illness is only HK$91.

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