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Critical Illness Coverage
in Southeast Asia
By Geoffrey Mann – August 31, 2023
Grow and protect your assets
Most financial advisors would agree that there are two components to a proper wealth management strategy: growing your assets and protecting them. If your advisor focuses on growth but ignores protection, you might ask yourself what good is accumulating wealth if you can’t protect it?
We’ll focus today on the insurance side of protecting your wealth, but don’t forget that protection can include managing your investments: adjusting your holdings to diversify, reduce volatility and reflect changing market conditions.
If you’re taking the time to read this article, you probably know and agree with the following: It goes without saying that you should have quality health insurance – there is really no circumstance where this isn’t true. Medical costs are simply too high to risk paying out of pocket, even in Southeast Asia.
If your family relies on your income, or if you have significant debt, you should also strongly consider life insurance. A less well-known option with some policies is coverage for critical illnesses, which will issue a lump sum payout in the event of death or a major illness or accident. The benefit can be used as you or your beneficiaries see fit: replace lost income, cover expenses that are not covered with health insurance, pay funeral expenses, whatever.
What is a critical illness?
The benefit is triggered by a diagnosis of a life-changing illness or accident, typically one or more of these:
- Heart attack
- Stroke
- Cancer
- Heart disease
- Respiratory diseases.
- Permanent disability
- Severe trauma
- Coma
- Impairment of daily living
- Organ failure and transplant
- Loss of vision
- Third degree burns
The list will vary to some degree depending on the insurer and the condition must meet minimum severity criteria.
The chances of experiencing a critical illness continue to rise, along with costs.
People are living longer now than ever, with the global average life expectancy at over 74 years. Check out the World Health Organization’s global Health Estimates for a breakdown of causes of death and disability – you’ll see a lot of matches with the above list of critical illnesses.
At the same time, with ongoing advances in medicine, many critical illnesses are more survivable than ever, meaning the associated expenses can keep growing. Much of your medical bills should be covered by your health insurance, but you may need to pay deductibles or copays. In addition, some hospital expenses may not be eligible under your policy, and the likelihood of out-of-pocket expenses will only increase as you start ongoing care, therapy, and the many other ancillary expenses that arise following a critical illness.
What happens to my health insurance?
You should be aware of two major concerns: guaranteed renewability and portability. Don’t worry, we’ll explain:
- If you have a low-cost health insurance policy issued in Southeast Asia, you need to know whether the insurer can decide to not let you renew. That’s right, every year, people get kicked off their health plans because of big claims.
- If you have insurance through your employer and you lose or quit your job, in most instances your coverage will end too. Some employers and insurers do allow you to take it with you, but they’re the exception, not the rule. (This isn’t the case with personal health insurance, which is a good reason to not rely 100% on employer coverage.)
If you have a low-cost health insurance policy issued in Southeast Asia, you need to know whether the insurer can decide to not let you renew. That’s right, every year, people get kicked off their health plans because of big claims.
If you have insurance through your employer and you lose or quit your job, in most instances your coverage will end too. Some employers and insurers do allow you to take it with you, but they’re the exception, not the rule. (This isn’t the case with personal health insurance, which is a good reason to not rely 100% on employer coverage.)
And the consequences of losing health coverage when you have a critical illness?
Dire: throughout most of Southeast Asia, there is no requirement for insurance policies to cover pre-existing conditions.
So, when you attempt to buy a policy on the private market, your critical illness will not be covered. Worse, in many cases, you won’t be able to even find an insurer that will issue you any policy because you’re so likely to have major medical expenses.
Are you ready?
We get it, nobody wants to think about stuff like this: do I really need to buy more insurance so I’ll essentially get my life insurance payout while I’m still alive but in critical condition? But if you’ve read this far, you’re probably ready to have a conversation about some of the details and cost.
These articles are intended to give you enough information to make informed decisions, but health insurance is complicated. Whether you still have questions on this topic or feel ready to take the first steps toward getting a policy, our advisors can help. Just fill in this form.
