Sunday, October 23, 2005

Critical illness cover

Critical illness cover is one the most important elements of personal insurance. Sometime, it is even more important than the death coverage. For instance, even if you don't have dependent, it is still important to have coverage on permanent disablement and critical illness. Of course, it would be good to have a small amount of death coverage that can cover your funeral expenses.

Life insurance companies understand this, therefore life insurance is designed in a way that we CANNOT buy critical illness separately from death and permanent disablement coverage. We are FORCE to buy death coverage, even if we want to buy critical illness coverage only.

In Malaysia, there is one insurance company offers critical illness cover without attaching it to life insurance: American Home Assurance. It is a general insurance company.

I made a quick check with the company.
Coverage: RM50,000 critical illness for male non smoker
Annual premium: RM84 (Age: 18-35), RM177 (Age: 36-45), RM514 (Age: 46-55), RM1,136 (Age: 56-60), RM1,783 (Age: 61-65)

The plan is worthwhile if you are below 46 years old. For instance, the annual premium for a 25-year-old is RM84 only. By splitting out the critical illness coverage from your life insurance, you can get a term life insurance with reducing coverage. It can cut your entire insurance premium further by half.

You can find American Home Assurance Co.'s telephone number at General Insurance Association of Malaysia's web site (List of Members page, left column third row), which is 2058 5000.