What is cancer insurance?
Types of Cancer Insurance
There is no clear definition of cancer insurance in Hong Kong, and currently, the market mainly offers two types of insurance plans: “cancer medical insurance” and “cancer critical illness insurance.”
| Insurance Plan | Cancer Medical Insurance | Cancer Critical Illness Insurance |
| Reimbursement/ Compensation Method | Reimbursement of actual medical expenses | Pays a lump sum |
| Coverage | Protects against general cancer and carcinoma in situ | For carcinoma in situ, only a portion of the sum assured will typically be advanced; for cancer diagnosis, the total sum insured will be paid out. |
| Policy Renewal Method | Renewed annually | Mostly level premiums*; some renew every 1 or 5 years |
| Product Design | Generally no savings component | Typically includes other critical illness coverage and savings component |
In summary, “cancer medical insurance” pays for medical expenses, while “cancer critical illness insurance” supports the insured’s daily living expenses in addition to paying for massive medical expenses.
| Regular Medical Insurance Premium | Level Premium* | |
| Total Premium | $1.7 million | $1.7 million |
| Payment Period | Renewed annually | 30 years (typically) |
| Average Annual Payment | $28,000/year ($1.7 million over 60 years) (21 to 80 years old) | $57,000/year ($1.7 million over 30 years) (21 to 50 years old) |
The table above shows the difference in premium payments between cancercritical illness insurance (level premiums) and cancer medical insurance.
Assuming the policyholder starts insured at age 21, the total premium for both policies is $1.7 million, and assuming a lifespan of 80 years.
Due to the different payment periods, level premiums* are over 1.5 times higher than cancer medical insurance premiums.
However, most What is Critical Illness Insurance? policies on the market have a savings component, and policyholders can receive a partial premium refund at the end of the policy. But “there is no such thing as a free lunch,” and policyholders must pay higher monthly premiums at the same time.
Insurance Tip 💰
Level premiums* refer to the premiums that the policyholder needs to pay each year during the payment period, during which the amount remains constant.
However, most medical insurance policies typically follow an “annual renewal” system, which means that the premiums the policyholder needs to pay each year increase with their age.
