The critical need for serious illness insurance

Standard health cover does not apply to all forms of treatment

When it comes to protecting yourself and family, there are many things that seem non-negotiable — health insurance, motor insurance, home insurance and dental, to name a few. But, when it comes to protection against critical illness, most people tend to see this as an option, rather than a necessity.

According to research on behalf of Friends Provident International (FPI), 58 per cent of women and 54 per cent of men in the UAE have been or know someone who has been affected by critical illness in the last 12 months. However, 76 per cent of UAE residents don’t have critical illness protection and nearly 40 per cent aren’t even familiar with the concept.

It’s crucial that you are protected against the effects of a critical illness, whether employed, self-employed, unemployed, single, married, with or without children. To help get started, here are seven tips to keep in mind to choose the right type of protection:

■ Learn: Educate yourself on the benefits of critical illness insurance and the types of illnesses covered. Most providers cover around 35 illnesses.

■ Assess: Figure out whether you are prone to being affected by a critical illness. The factors vary for every individual of course; however critical illnesses are often hereditary. Therefore, be aware of family medical history and if any of the immediate family members have been impacted.

■ Consider: Do you have family or loved ones who rely on you financially? Do you have any liabilities or debts that would need to be cleared if you became seriously ill and unable to work? These are important things to consider as critical illness insurance can cover outstanding debts, in addition to the family’s daily living costs. Speak with a financial adviser who will be able to recommend a policy to suit your circumstances.

■ Know your insurance: One-third of respondents to the FPI survey said their employer provides critical illness insurance as part of their benefits package. This is highly unlikely and highlights that many people confuse medical insurance with critical illness insurance. These two types are completely different and medical insurance is unlikely to cover the cost of recuperation and loss of earnings if you are unable to return to work.

■ Research: Ensure the insurance provider has your best interests in mind. There is generally a lack of understanding around critical illness insurance, which prompts people to base decisions on brand reputation and price. While those are important factors to consider, ask your financial adviser for information on a range of plans from different providers, so you can decide which one most closely matches your individual requirements.

■ Price: There is a common misconception that critical illness insurance is expensive. However, there are various insurance plans that work for every budget. Don’t hesitate to explore options.

■ Eligibility: You may think that only the breadwinner can apply for critical illness insurance. However, anyone can apply, including house persons; stay at home parents, single professionals, breadwinners and widows.

■ David Denton-Cardew is Senior Manager, Products and Propositions at Friends Provident International, Middle East and Africa.