Acclaimed writer Mark Twain once said that a lie travels halfway around the world while the truth puts on its shoes. This quote has aged well, with multiple recent scientific studies corroborating the velocity of lies. An MIT study focusing on social-media discourse revealed that false information travels six times faster than truth and has higher outreach. This phenomenon can have serious repercussions, especially in high-stakes sectors such as insurance. 

Insurance is generally fraught with complexities in terms of options, affordability, and potential benefits. In recent years, despite growing awareness, higher flexibility, and increasing accessibility of products, insurance penetration has been low. Among the sector’s many detriments are misconceptions affecting some insurance categories more than others. Critical illness (CI) insurance is a notable example. 

Critical illness insurance, by definition, is a policy which entitles a beneficiary to a lump-sum cash payment upon a diagnosis of a stipulated critical illness(s). Though seemingly straightforward, Critical illness insurance is plagued by misconceptions, partly because it is less known than health and life insurance. However, Critical illness insurance is as vital as health and life insurance, if not more. That importance is linked to the fact that critical illnesses have debilitating effects on a person’s life, earnings, lifestyle, family’s future, and overall finances. A few common myths and misconceptions associated with Critical illness insurance have been dispelled below:

Myth 1: Health insurance is a substitute for critical illness insurance

Health insurance, though advisable to have, only covers hospitalization expenses. However, in some cases, especially when diagnosed with critical illnesses such as cancer, out-of-pocket expenses will continue to mount post-hospitalization due to palliative care, which health insurance will not cover. At times, the severity of the problem could require unique treatment in locations beyond the scope of the health insurance policy. In such cases, the lump sum from a Critical illness policy can be a lifesaver, providing financial relief and a boost. It can also compensate for the loss of income due to the illness while enabling the patient to focus on recovery. 


Myth 2: Critical illness insurance is generally expensive

Like other insurance categories, Critical illness insurance accompanies distinctive coverages and premiums aligned with the expectations and requirements of people across age groups and socioeconomic conditions. Typically, Critical illness insurance policies procured as riders with life/health insurance tend to be cheaper compared to standalone products. However, the insurance rule of thumb applies: The more coverage, the higher premium.


Myth 3: Critical illness insurance is an excess, especially for young people

According to the UAE Ministry of Health and Prevention(2), the number of deaths from heart disease in 2019 was 72 per 100,000 population. The corresponding number in 2020 was 84. Such year-on-year figures underscore the growing incidence of critical illnesses in the region and, by extension, the need for appropriate insurance protection. That said, the diagnoses of critical illnesses are increasing and surfacing among young people, with another survey(3) revealing that the average and youngest ages of Critical illness insurance claimants in the Middle East are 49 and 27, respectively. 

So, contrary to popular belief, Critical illness insurance holds relevance across age groups. In fact, young patients have a lot more at stake financially upon diagnosis due to a longer prognosis and the loss of income at their prime earning age. At the same time, they can potentially get more coverage for lower premiums due to their young age.

Myth 4: Critical illness insurance covers all critical illnesses

Insurers don’t like ambiguities. So, they are meticulous and elaborate in their exclusion and inclusion clauses. As a result, Critical illness insurance policies tend to mention the health conditions that fall under “critical illnesses”, and, unfortunately, not every life-threatening disease qualifies. However, there are no set-in-stone rules, as the inclusions and exclusions are subject to change. So, policyholders are advised to revisit their existing plans and indemnify themselves against evolving risks. 

Myth 5: People with pre-existing conditions cannot get Critical illness insurance

While it is true that pre-existing conditions make it harder to procure favourable Critical illness insurance, they are not a roadblock. Intermediaries, agents, or service providers review an applicant’s medical history and determine if the pre-existing conditions are a direct risk for critical illnesses. An insurer could sometimes accept such risks for a higher premium, provided the applicant undergoes and clears a medical screening. If the applicant has no known pre-existing conditions and is relatively younger, Critical illness insurance policies don’t require such medical screening in most cases. A leading insurer said that 97% of all Critical illness insurance applications are accepted irrespective of pre-existing conditions. 

In recent years, exemplary digitalization in the insurance sector has induced convenience in the procurement process. So, customers can easily browse various options online, perform comparative analyses of prices and coverages between different insurers, and address any lingering misconceptions. That said, indemnifying against all potential risks requires reading between the lines and expert opinion, where insurance advisors excel. Drop a mail at info@cfsgroup.com to learn more about Critical illness insurance, its benefits, and products tailored to your requirements. 

  1. https://apnews.com/article/donald-trump-us-news-ap-top-news-international-news-massachusetts-institute-of-technology-8da97e49a9064b36baa047d98bb72272
  2. https://mohap.gov.ae/assets/download/fb039118/UAE%20Statistical%20Annual%20Report%202020.pdf.aspx
  3. https://www.zurich.ae/claims-report-2023

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