Why do you need Critical Illness Insurance?
Functions of Critical Illness insurance
The primary function of critical illness insurance is to provide a lump-sum cash payout to compensate the insured for the loss of income due to illness.
Unlike medical insurance, which covers the expenses of treating patients, critical illness insurance provides compensation that is not limited to medical expenses. The insured can use the payout to meet daily living needs and maintain a basic standard of living.
1. You need to repay a property mortgage
Firstly, if you need to repay a property mortgage, it is necessary to consider purchasing critical illness insurance to protect yourself or your family.
In the event that you are diagnosed with a critical illness during the mortgage repayment period and your health deteriorates, making it impossible for you to work, it means that even with medical insurance, your financial plans will be disrupted due to the loss of your original income.
Without an income to repay the mortgage, the bank can foreclose on your property at any time. Even if your spouse or family members contribute to the repayment, they may not be able to fully afford the expenses. Critical illness insurance can provide sufficient cash flow in emergencies, allowing the insured to use the payout to repay the mortgage, eliminating the worry of foreclosure and financial troubles, and providing peace of mind for recovery.
2. You have young children
Secondly, if you have young children to take care of, critical illness insurance can provide support when you are helpless due to illness.
It is well known that raising children entails significant expenses, including daily living, food, education, and more. If a parent is diagnosed with a critical illness, they may need to take time off work to focus on their health, resulting in a loss of income that would affect various expenses related to their children. This may lead to a reduction in their children’s extracurricular classes or activities.
If there are no family members or friends who can provide financial assistance, you may need to cut back on daily expenses, affecting your children’s quality of life and having long-term implications on their future development. Critical illness insurance can provide a lump sum payout to help maintain the children’s expenses during the insured’s illness.
3. You have parents to support
Thirdly, in Hong Kong, many families have both young and elderly members, and supporting parents in addition to children can create financial pressure.
If you, as the breadwinner, suddenly fall seriously ill, it will impose a tremendous burden on the entire family. Elderly parents, after retiring, have no fixed income and rely on meager retirement funds to cover their living expenses, which often require support from their children. If you are diagnosed with a critical illness, there is a risk of loss of income due to time off work, which will impact the stability of your parents’ later years. Besides the worry, they will also feel uneasy.
A high-quality critical illness insurance can provide you with peace of mind. In times of helplessness and illness, it offers a lump-sum cash payout that can be used for your parents’ expenses, allowing them to maintain their quality of life while you are ill.
4. You are running a company or business premises
The last scenario is when you are running a company or business premises.
As a business owner, you do not have sick leave benefits. If you have to stop working due to a serious illness, it will affect your business and income. If the financial situation worsens, the company may need to reduce staff or even close down. A critical illness payout can provide additional emergency funds to the company, which can be used to hire additional staff to help with the operations, allowing the company to continue running during your recovery until you are able to return to work.
Critical Illness Insurance Is Essential!
From the above scenarios, it is clear that critical illness insurance should be considered in many situations. A reliable critical illness insurance can replace the lost income during your time off work, provide financial support, and minimize the impact on other family members, allowing you to maintain your standard of living.
Critical illness insurance is undoubtedly important. In addition to medical insurance, the importance of critical illness insurance should not be overlooked. In any situation where you have a stable income, it is advisable to actively consider purchasing critical illness insurance for yourself.