'Critical illness' cover may not insure cancer

Many first-time buyers are wooed by insurance agents who, in the first few meetings, will psyche you out with the list of fatal diseases that you can contract and what would happen to your loved ones if you succumb.
 
The thought of small children or a family can prompt many to sign on the dotted line. And, with it you heave a sigh of relief that all is taken care of. Well, think again.
 
What all insurance agents will tell you is the list of many critical diseases that the insurance covers, but they are unlikely to define at what stage of the illness will you receive the insurance money. 
 
And it is here that there is a huge mismatch between the definition of critical illness as defined by an individual and the insurer.
 
For example, your cover will include cancer but you will not be paid when diagnosed with the disease at early stages.

It is only at the last stage that the amount of money will be doled out that has been defined in the document and for which you’ve been paying the premium for, say, over a decade. Until then, the treatment is on you. 
 
Take the case of a patient (prefers to remain anonymous) who was diagnosed with breast cancer. It was in the early stages and she had to undergo lumpectomy, but was denied payment from the insurance provider as it was still in the duct and not covered.
 
If you’ve faced similar problems, Peter Ellen, Chief Operating Officer of Nexus Group, explains why this happens and clarifies the difference between critical illness insurance and medical insurance.

The two are different and buyers sometimes can’t differentiate about what each provides and doesn’t.
 
“Critical illness (CI) insurance is not linked to treatment – that is medical insurance. Typically, CI insurance pays out on diagnosis of the disease. A quote direct from an Insurer's CI brochure demonstrates the point.

“Critical illness benefit pays a lump sum if your client is diagnosed with one of the defined illness or disabilities covered by the ... policy’,” he tells Emirates 24|7.
 
According to Jessica Cook, a private client adviser with AES International, Global Wealth Management, “The sorts of exclusions that are associated with critical illness cover are largely due to regulations put in place by associations of insurers.”
 
It’s wise to take new-style policies. These give customers diagnosed with an early-stage condition between 15 and 20 per cent of the full claim amount.
 
“The tightening of the restrictions is mainly due to advances in medical technology, so much so that the impact of many illnesses is considered less serious than before.

“Screening techniques have also improved, so for example many cancers can be diagnosed earlier and treated before they reach the critical stage,” explains Cook.
 
“No one has a crystal ball and there are things an insurer won’t insure for as the risk/cost is too great.

“Always remember the underlying reason for taking out critical illness is to make sure you can cover living and medical costs should the worst happen,” she adds.
 
Another things that insurance buyer should keep in mind that not all diseases, which, according to you are deadly will be considered critical by the insurance provider.
 
“Again, it varies from policy to policy and you would need to check with the provider. It is also worth noting that some critical illness cover includes permanent and total disability and others do not. Critical illness cover can include cover for cancer, to motor neurons disease, to kidney failure and strokes. The list goes on.
 
“Where a disease such as skin cancer is not considered to be a critical illness in a policy it is likely to be considered by the insurer as treatable at the early stages and the success rate due to medical advances is high, so that the risk of death from illness is not considered high enough to be included,” elaborates Cook.
 
Ellen affirms that “the list of diseases and disabilities is very long, and typically well-defined by the insurance companies in plain English (not plain Arabic, although some companies are making this a next step in their development).
 
“However, it is worth noting that about 90 per cent of all claims relate to either cancer or heart disease.

“Skin cancer is a special case, as most skin cancers are usually easily treated, not likely to spread and not life threatening; however, malignant melanoma, which has progressed beyond the outer layer of skin, is included,” he says.

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