Do You Know The Difference Between Medical Insurance And Critical Illness Insurance?

We have trees in the picture above.

Let me ask you.

What happened if the tree trunk is chopped down?

Can the tree regrow?


Now, if the tree root is removed and destroyed.

Can you regrow the tree?


The tree root represents YOU.

On the other hand, the tree trunk represents your investment assets such as cash, properties, shares, unit trusts and other investments.

You are the root because you are the money generating asset.

Once the root is removed, we cannot regrow the tree.

Once you are out of earning capability, you can no longer generates more income & assets to achieve your dreams.

Therefore, you are very important!

Statistics show that 1 in 4 people can get cancer. Terminal illness is one the conditions (other than unemployment, total permanent disability, accident) that can cause financial catastrophe in your life.

Furthermore, if you pay attention to news, not only elderly are diagnosed with critical illness nowadays. It is evident that more youngsters are getting ill partly due to unhealthy lifestyle, environment factor, stress level, and others factor.

In fact, one of my colleague’s friend just passed away due to heart attack.

He is only 27 this year.

Life can be unpredictable.

Other than keeping yourself healthy with healthy diets, exercises & proper stress management, you are advised to do a proper financial risk management as well.

You might be thinking that I have a medical insurance, I am good in my financial risk management.

Oh well, you are partially correct.

Medical insurance covers your medical bills (surgery, kidney dialysis, chemotherapy, etc).

BUT, what happened if you would like to try out alternative treatment such as Chinese medicine? And highly likely that you need more rest (thus no longer working) & need more supplements at unhealthy time like this.

Can company still employ you when you need to take frequent leaves for treatment?

No employment = No income, unless you have built a strong passive income.

How can you solve the $$ problem above?

You can take up critical illness insurances with early critical care payout option.

Critical illness insurance pays you a lump sum once you are diagnosed with a terminal illness

(under 39 – 45 types of critical illness, depending on the insurance company)

What if cancer diagnosis is on early or intermediate stage? Can you claim critical illness insurance?

Yes, provided you have early critical care payout option in your insurance.

For instance, if one is diagnosed with early stage of colon cancer.

He can claim partially from the critical illness insurance (with early critical care payout option).

If his critical illness of coverage is RM100,000 and with early payout of 25% claim for early stage of illness, he will receive RM 25,000 (RM 100,000 x 25%) lump sum payment.

Wondering how much should you protect yourself with?

General rule, I would recommend your coverage to be 3 – 7 times of your annual income.

If you are earning RM 100,000/ year, your minimum critical illness coverage needs to be RM 300,000.

It means that this RM 300,000 can replace your income for at least 3 years.

In short you need both medical insurance & critical illness insurance for proper risk management.

Medical Insurance – pay your medical bills, recommended annual limit of 1 million, and unlimited lifetime limit.

Read more on medical insurance

Critical Illness Insurance – pay you a lump sum as financial aid, recommended coverage 3 – 7 times of your annual income.

During health crisis, cash is king.

Look into your insurance and ensure that you have done a proper financial risk management.

Drop me a message below, for any related questions (eg review your existing insurance portfolio, e

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