How much critical illness cover do you need? Learn about critical illness and how to determine the right level of cover in one article.

When travelling, most people spend time planning their itinerary and arranging accommodation, but have you also properly planned for your future? If you were to develop a health problem in the future, would your financial reserves be sufficient to cope with it? Many people currently have medical insurance, but when faced with a sudden critical illness, medical insurance alone may not be sufficient. Do you need to purchase critical illness insurance? How much critical illness cover is enough? In this article, 10Life will explore the role of critical illness insurance and teach you how to calculate an appropriate level of cover, so that you and your family can have greater protection when faced with health risks.

Critical Illness Insurance is an insurance product designed to provide protection against serious illnesses. If the insured person is unfortunately diagnosed with a serious illness specified in the policy, such as cancer, heart disease or stroke, the insurance company will provide the insured person with a lump-sum payout. Unlike general medical insurance, the insured person can use the payout freely and flexibly to cover treatment expenses and daily living costs, enabling them to focus on recovery without worries if they are unable to work due to illness.

Many people may believe that having medical insurance is sufficient, but in reality, medical insurance reimburses medical expenses on an “indemnity” basis. By comparison, critical illness insurance offers greater flexibility. If the insured is unfortunately diagnosed with a specified serious illness, they will receive a lump-sum payout without having to submit receipts for medical expenses, and can use the payout as they see fit. When certain critical illnesses, such as cancer, require long-term treatment, the patient may need to take time off work to recover. Medical insurance alone may not fully cover the treatment costs and everyday living expenses. The lump-sum payout from critical illness insurance can be used to make up for the loss of income resulting from taking time off work, pay medical expenses, or even hire a carer, providing more comprehensive support. Therefore, even if you already have medical insurance, critical illness insurance remains an important form of protection that should not be overlooked.

Medical Expenses

In Hong Kong, private healthcare is expensive. Take breast lump removal surgery as an example: the surgical and hospitalisation costs at a private hospital can exceed HK$50,000 to HK$70,000¹, while the treatment costs for different critical illnesses can vary significantly. In addition, medical inflation in Hong Kong continues to rise. According to data from risk management consultancy WTW, medical inflation in Hong Kong is expected to reach 9.8%% this year, considerably higher than the overall inflation rate. Even cover that appears sufficient today may not be enough to meet actual expenses in the future. Therefore, when choosing the sum insured for critical illness cover, medical inflation should be taken into account to ensure that sufficient protection remains available when needed, helping to reduce financial pressure and allowing you to focus on treatment and recovery.

Living Expenses During Treatment

During an illness, patients may be unable to work for several months or even years, resulting in an interruption to their income. In addition to medical expenses, you should also factor in daily living costs, such as rent or mortgage repayments, children’s education expenses, costs of supporting parents, and basic living expenses such as transport and food. Furthermore, during treatment, patients may need to hire a carer or purchase specific nutritional supplements to support their recovery, resulting in additional expenses. Therefore, it is generally recommended that the sum insured for critical illness cover should cover at least two to three years of living expenses, ensuring that patients can maintain their quality of life during recovery without being affected by an interruption to their income.

Assessing Your Financial Situation and Family Responsibilities

When choosing the sum insured for critical illness cover, you should consider not only medical and living expenses, but also your own financial situation and family responsibilities. The need for protection varies at different stages of life. For example, single individuals mainly need to consider medical expenses and daily living costs, ensuring that they can maintain a basic standard of living during treatment. Married individuals or those with children should also consider their family’s financial situation, including their spouse’s living expenses and their children’s education costs, to ensure that the family can maintain a stable lifestyle even if they are unable to work. In addition, if you have a mortgage or need to support your parents, you should ensure that the sum insured can cover these long-term financial commitments, avoiding any impact on your family’s living standards due to an interruption in income. By taking medical expenses, living costs and personal financial responsibilities into full consideration, you can develop a critical illness insurance plan that better meets your needs, ensuring sufficient financial support at critical moments and giving you and your family peace of mind when facing the future.

When undergoing long-term treatment, patients may need to take time off work and face financial pressure. Critical illness insurance can provide a lump-sum payout to ease the financial burden, giving you and your family greater peace of mind. However, how do you choose the right critical illness insurance? 10Life’s actuaries have conducted an in-depth analysis of whole-life critical illness insurance plans available on the market, assessing payouts under different scenarios, such as cancer, heart disease, stroke, unknown illnesses and early additional benefits, and rating them based on policy terms, including critical illness definitions and exclusions. If you have any questions, you can learn more about term critical illness or whole-life critical illness plans on the 10Life website, or contact a licensed adviser for professional advice.

Further reading:
【Critical Illness Insurance 2025】Whole-life critical illness vs term critical illness: a comprehensive comparison of premiums, coverage and savings components
【Critical Illness Insurance Comparison 2025】Which whole-life critical illness insurance is best? The key features of 5-star insurance explained
Can't get insurance after suffering a serious illness? Which critical illness plan offers renewed hope to recovered patients?

Notes:
1.St. Paul's Hospital, 《二零二三年住院常見的治療或檢查項目的帳目數據》, 2023. 

Last updated: 2 April 2025

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.