Comparing the flagship critical illness insurance plans from AIA, Manulife, and Prudential: Analyse critical illness coverage and new features.

The ongoing COVID-19 pandemic has heightened everyone's focus on health protection. Among the new generation of critical illness insurance plans launched this year, in addition to covering major critical illnesses such as cancer, heart disease, and stroke, insurance companies have also enhanced protection for policyholders in areas such as ongoing cancer treatment, severe infectious diseases, and post-illness life. This article will analyse the coverage, features, and returns of the flagship lifetime critical illness insurance plans from AIA, Manulife, and Prudential.

 

 

Critical illness insurance provides a lump-sum payout when the policyholder is diagnosed with a specified illness as defined in the policy. The payout amount depends on the severity of the illness; severe cases may receive 100% of the basic sum assured, while early-stage critical illnesses, such as carcinoma in situ or angioplasty, may receive approximately 20 to 25% of the basic sum assured. Assuming the policyholder is a 35-year-old non-smoker, paying a monthly premium of HKD 1,000 for 25 years, the average payout amounts for specified illnesses under AIA Premier Elite Max 3, Manulife Vivid Life Critical Illness 2 (available in two versions), and Prudential Crisis Cover Protector II are as follows (see Note 2):

 

Chart 1: Comparison of Lifetime Critical Illness Insurance from AIA, Manulife, and Prudential: Average Payout for Critical Illnesses

 

 

As shown in Chart 1, under the same premium, Prudential Crisis Cover Protector II offers higher payouts for early-stage critical illnesses, while Manulife Vivid Life Critical Illness 2 leads in payouts for the first and second severe critical illnesses. Additionally, premium rates for critical illness insurance differ by gender, with females generally paying slightly higher premiums. If a policyholder claims for the first severe critical illness, they are exempt from paying future premiums.

 

In-Depth Comparison of Single and Multiple Critical Illness Coverage from AIA, Manulife, and Prudential (Male)

In-Depth Comparison of Single and Multiple Critical Illness Coverage from AIA, Manulife, and Prudential (Female)

 

 

In the previous generation of multiple-claim critical illness plans, even if cancer persisted after the initial claim, policyholders had to wait for a period of 3 years or more before making a second claim. However, the new generation of critical illness plans includes coverage for ongoing cancer treatment. Even during the waiting period (1 year after the first claim), as long as the policyholder is actively receiving cancer treatment, they can receive additional payouts. Active cancer treatment typically includes surgery, radiotherapy, chemotherapy, or targeted therapy, but excludes hormone therapy. Although cancer is a serious illness, it is not necessarily incurable; however, the prolonged treatment can be costly. Thus, ongoing cancer treatment coverage can alleviate the financial burden on policyholders during treatment.

 

When reviewing the ongoing cancer treatment coverage of a product, key aspects to note include the payout amount, payout method (lump sum or monthly), and the number of payouts. We have used cancer cases with varying treatment durations, up to six years, to explain the coverage provided by AIA, Manulife (Enhanced Version), and Prudential. Below are the cumulative payout amounts at different stages (assuming a 35-year-old non-smoking male, paying a monthly premium of HKD 1,000 for 25 years).

 

Chart 2: Comparison of Lifetime Critical Illness Insurance from AIA, Manulife, and Prudential: Ongoing Cancer Treatment Coverage

 

 

Upon cancer diagnosis, the policyholder receives the first cancer payout. Among the plans mentioned, Prudential and Manulife (Enhanced Version) offer slightly higher payouts.

If the policyholder continues active treatment 1 and 2 years later, they can receive ongoing cancer treatment coverage each year. At this point, AIA offers a higher cumulative payout, but its ongoing cancer treatment coverage concludes.

After 3 years (post-waiting period), policyholders with persistent cancer can claim the second cancer payout, and AIA’s cumulative payout remains higher.

After 4 and 5 years, eligible policyholders under Prudential and Manulife (Enhanced Version) can again receive ongoing cancer treatment coverage. However, AIA does not offer this benefit, so its cumulative payout remains unchanged.

After 6 years (post-waiting period), policyholders with persistent cancer can claim the third cancer payout. At this stage, Prudential and Manulife (Enhanced Version) offer significantly higher cumulative payouts.

Subsequently, if the policyholder develops another critical illness, such as heart disease or stroke, only policyholders under Manulife and Prudential can receive severe illness payouts again, with Manulife paying 100% of the sum assured and Prudential paying 80%. AIA, however, offers no further payouts.

 

As shown in the chart above, when comparing cumulative payout amounts, the advantage depends on the year in which cancer treatment ends. The critical illness plans from AIA, Manulife (Enhanced Version), and Prudential each have their strengths.

 

 

With the outbreak of COVID-19, insurance companies have sought to extend critical illness insurance coverage to severe conditions caused by infectious diseases. For policyholders of AIA Premier Elite Max 3, if diagnosed with a disease declared by the WHO as a Public Health Emergency of International Concern and requiring admission to an intensive care unit (ICU) for 3 or more consecutive days, they can receive a payout of 20% of the basic sum assured. For example, COVID-19 is classified as a Public Health Emergency of International Concern by the WHO.

 

As for Manulife Vivid Life Critical Illness 2, if the policyholder unfortunately requires ICU admission for 3 or more consecutive days, whether for a listed or unlisted illness in the policy, they can receive a payout of 20% of the basic sum assured. This broader coverage extends beyond infectious diseases to illnesses outside the policy’s defined scope.

 

 

Critical illness insurance often introduces new features, and one worth mentioning is the Life Protection Benefit under Manulife Vivid Life Critical Illness 2. If the policyholder has claimed for their first severe critical illness and is unable to independently perform two or more “Activities of Daily Living” (including bathing, dressing, mobility, transferring, toileting, and eating) for 180 consecutive days or more, requiring assistance from others, they can claim an additional 100% of the basic sum assured from the insurance company. For conditions such as stroke or certain cancer treatments, post-illness life can be significantly impacted, and this coverage may prove beneficial.

 

 

Another feature of lifetime critical illness insurance is its dual purpose: coverage for illness and savings if no claims are made. If the policyholder fortunately does not make a claim, they are guaranteed to recover their premiums, though the break-even year varies across plans. In the case of the three products mentioned, Manulife Vivid Life Critical Illness 2 offers the fastest guaranteed break-even year. In principle, upon completing the full 25-year premium payment period, policyholders can surrender the policy and immediately recover their premiums. However, for AIA Premier Elite Max 3 and Prudential Crisis Cover Protector II, the guaranteed break-even year exceeds 45 years. Of course, the primary purpose of critical illness insurance is protection, and surrendering the policy means losing coverage. Nevertheless, a shorter break-even year offers policyholders greater flexibility.

 

Chart 3: Comparison of Lifetime Critical Illness Insurance from AIA, Manulife, and Prudential: Guaranteed Break-Even Year

 

 

Regarding premiums, many customers are concerned about whether lifetime critical illness insurance premiums might increase. Insurance advisors often assure clients that premiums for lifetime critical illness insurance do not increase, citing industry practice. However, very few policies explicitly state fixed premiums in black and white within the contract, and Manulife Vivid Life Critical Illness 2 is among the few that do. Consider this: if claims for a particular plan far exceed expectations, placing pressure on the insurance company’s profitability, can they truly refrain from increasing premiums based solely on industry practice? If one company raises premiums, a domino effect could occur, with others following suit. Without a contractual guarantee, who can prevent this? Ultimately, verbal assurances are no substitute for policy guarantees, and we hope more insurance companies will explicitly state fixed premiums in the future.

 

In-Depth Comparison of Guaranteed Returns from AIA, Manulife, and Prudential (Male)

In-Depth Comparison of Guaranteed Returns from AIA, Manulife, and Prudential (Female)

 

10Life has compared multiple lifetime critical illness insurance plans. For more details, visit 10Life’s 《Product Decoder》.

 

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