Terminal Illness vs Critical Illness

We take steps to live a healthy lifestyle and minimise our risk of serious illnesses, but none of us can completely prevent them. According to the Department of Statistics Malaysia, terminal and critical illnesses exceed 40% of all deaths in Malaysia in 2020, highlighting their ever-present threat across the country. In insurance, the terms critical illness and terminal illness are often used. But what are they, and why are they so important to be aware of not only when it comes to our health and wellbeing, but also in terms of insurance? We will also explore why it’s important to get insured against them.

Terminal illnesses are incurable illnesses that are expected to lead to death within 12 months, such as advanced stages of a disease. Critical illnesses are serious illnesses such as cancer, stroke or heart disease. Typically, the patient must learn to live with their critical illness but extensive medical treatment can cure some of them. 

Similarities & Differences Between Terminal and Critical Illness

Similarities

Both types of illnesses are similar in that they lead to a loss of income and productivity in the patient. This can be financially crippling, especially with soaring medical costs and the expensive nature of such illnesses. Furthermore, the patient may be unable to continue working due to deteriorating physical conditions. 

A caretaker and medication may also be needed, further adding to the financial strain. Patients will prioritise focusing on recovery, leading to reduced productivity as they allocate their time accordingly. Both illnesses can also lead to mental setback and grief for the individual and their family. For example, a parent or breadwinner will likely feel guilty for being unable to provide for their family.

Differences

A key difference between the two types of illnesses is that terminal illnesses usually have no available cure. Critical Illnesses typically have a cure, but they can be costly and the patient may still relapse after recovery. 

The care for terminally ill patients is focused on end of life care. This is the support for people who are in the final months of their life, including support for the family, respecting their wishes/preferences, and provision of different types of care such as palliative care. The care for critical illness patients is focused on their recovery such as their treatment or rehabilitation.

Why should we get insurance?

Late detection of a disease is a common phenomenon in Malaysia,with over 60% of patients only discovering cancer at Stage 3 or 4. At this point, an illness can even go from critical to terminal. Hence, having an insurance policy ready to tackle serious illnesses will go a long way. It is important to know that, for both illnesses, you cannot buy insurance to protect against them after you have been diagnosed. This is all the more reason to buy insurance now.

Critical illness cover offers the insured financial support upon the diagnosis of a predefined list of critical illnesses under the policy. This typically comes in the form of a single lump sum payment given to the patient as an income replacement. This lump sum can also be utilised for medical treatments if their cost exceeds the individual’s medical insurance limit, maintaining their financial stability and ensuring they can pay for treatment. Critical illness insurance is highly recommended for individuals with family health history or for the breadwinner whose family cannot meet monthly expenses without their income. Some critical illness policies even provide additional benefits such as coverage resets and optional premium waivers so that patients can focus on recovery. 

Terminal illness insurance pays out a lump sum upon diagnosis of terminal illness. It is highly recommended for patients with a family health history and those wanting to secure their family’s future livelihood in case of their death. The payout can help financially prepare dependents or settle any financial issues that would occur after the patient’s death.