Term Critical Illness Insurance


Term Critical Illness Insurance

Term Critical Illness Insurance emphasizes "pure protection" without any savings component. The premiums are lower than those of Whole Life Critical Illness Insurance, and it offers greater flexibility as policyholders can apply or cancel the insurance at any time. Want to know if it is suitable for you? And what's the difference between annual renewal and renewal every 10 years? Bowtie will explain all the essential information about periodic critical illness insurance!

What is Term Critical Illness Insurance?

Term Critical Illness Insurance, also known as “100% pure protection” critical illness insurance, does not include any savings component.

Term Critical Illness Insurance only provides coverage for the insured within a fixed term, which is typically 1 year, 5 years, 10 years, 15 years, or 20 years. During the coverage period, the insurance company may adjust the premiums based on the insured’s age or other factors when renewing the policy. If the policyholder chooses not to renew, the coverage will expire at the end of the coverage term.

It is important to note that some Term Critical Illness Insurance policies do not allow renewal or application for individuals aged 80 or above. The maximum insured age varies among insurance companies, so it is recommended to confirm this before applying.

Who Should Consider Buying Term Critical Illness Insurance?

The biggest feature of Term Critical Illness Insurance is its lack of savings component, resulting in lower premiums compared to Whole Life Critical Illness Insurance. Furthermore, Term Critical Illness Insurance is a non-bundled insurance product, which means that policyholders will not incur any financial loss if they choose to cancel early. Therefore, it is particularly suitable for the following individuals:

  • Individuals who have just entered the workforce with low income
  • Individuals who frequently change jobs
  • Individuals with unstable cash flow
  • Individuals who want to flexibly utilize their funds

Benefits of Term Critical Illness Insurance

Lower premiums, higher coverage

Since Term Critical Illness Insurance does not include a savings component, policyholders only need to pay for the “protection,” resulting in significantly lower premiums compared to Whole Life Critical Illness Insurance. For example, with Bowtie Term Critical Illness, assuming a coverage amount of HK$1 million, the standard premium can be 14 times lower than that of a typical Savings Critical Illness insurance.

No bundling required, zero loss upon early cancellation

Insurance products that are linked to savings or investments usually have “cash value.” As policyholders can only receive the funds upon cancellation or when the policy matures, some policyholders continue to make payments even when they need immediate cash flow due to concerns about the loss from early cancellation. In contrast, Term Critical Illness Insurance does not have cash value or dividends, so policyholders will not incur unnecessary financial losses by cancelling early, ensuring greater flexibility in future asset arrangements.

Flexible premium payment period, decide the duration yourself

Term Critical Illness Insurance plans on the market generally allow policyholders to choose the coverage term that suits their needs, ranging from 5 to 20 years, catering to individuals at different stages of life. For example, for individuals who prioritize stability, longer-term plans can be considered as the premiums remain fixed during the coverage period. On the other hand, individuals who value flexibility can opt for shorter-term Term Critical Illness Insurance.

Monthly Premiums for Term Critical Illness Insurance

Assuming a coverage amount of HK$1 million and an annual renewal format
AgeBowtieHighest premium among other companiesLowest premium among other companies
25*HK$68/ monthHK$338/ month*HK$68/ month*
35*HK$144/ monthHK$692/ month*HK$166/ month*
  • *Assuming a non-smoking male
Assuming a coverage amount of HK$1 million and a 10-year renewal format
AgeBowtieHighest premium among other companiesLowest premium among other companies
25*HK$94.2/ month**HK$186/ month*HK$83/ month*
35*HK$215.1/ month***HK$319/ month*HK$170/ month*
  • *Assuming a non-smoking male
  • **Average monthly premiums for a total of 10 years between the ages of 25 and 34
  • ***Average monthly premiums for a total of 10 years between

Scope of Coverage for Term Critical Illness Insurance

The coverage scope of Term Critical Illness Insurance is similar to that of Whole Life Critical Illness Insurance. It generally covers specified critical illnesses listed in the policy, while any illnesses not mentioned are not covered.

Common covered critical illnesses include but are not limited to:

  • Cancer
  • Stroke
  • Heart disease
  • Kidney failure
  • Benign brain tumor
  • Coronary artery bypass surgery

How to Determine the Critical Illness Coverage Amount?

The main purpose of critical illness insurance is to provide “non-medical” protection, compensating the policyholder for the loss of income during the period of illness when they are unable to work and ensuring that the patient and their family can maintain their quality of life.

If unfortunately diagnosed with a severe illness, it usually takes about 2 to 3 years of treatment. Therefore, it is recommended to have a coverage amount of at least 2 to 3 times the annual income.

Compensation Method for Term Critical Illness Insurance

If the insured person is diagnosed with a specified critical illness, the insurance company will provide a lump sum payment, allowing the insured person to have sufficient funds to meet their daily needs during the illness.

For individuals at higher risk of developing critical illnesses, some insurance companies offer “multiple protection” plans. Unlike traditional “one-time protection,” multiple critical illness coverage can protect against the second, or even multiple subsequent, severe illnesses, building a more comprehensive protection network for the insured.

Are There Other Options Besides Term Critical Illness Insurance?

Whole Life Critical Illness Insurance is another common type of critical illness product. Unlike Term Critical Illness Insurance, Whole Life Critical Illness Insurance includes a savings component and generally has longer premium payment periods, commonly up to 20 years.

However, once the policyholder has paid the full premium, they can typically enjoy lifelong coverage until the age of 100 and may receive guaranteed returns upon policy surrender, achieving the goal of “having funds for medical treatment and savings.”

Want to know more? Read “Savings vs Pure Critical Illness Insurance”!

How to Purchase Term Critical Illness Insurance in Hong Kong?

In Hong Kong, purchasing Term Critical Illness Insurance does not necessarily require going through an insurance intermediary.

Bowtie, as the first virtual insurance company in Hong Kong, has pioneered an online underwriting system for medical evaluation. It can assess the applicant’s health condition instantly based on the answers to the questionnaire, allowing the policyholder to directly proceed with the application process online.

How to Make a Claim for Term Critical Illness Insurance?

If a claim needs to be made, it only requires preparing the necessary documents, including application forms and medical reports.

As a virtual insurance company, Bowtie also has an online claims system. When making a claim, simply submit the required information online, and someone will follow up promptly. It’s fast and convenient!

Next article - Savings Critical Illness Insurance vs Pure Critical Illness Insurance
How to choose between Savings and Pure Critical Illness Insurance? Bowtie will provide a detailed analysis to you before you make a decision.
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