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I have read through the critical illness book and it gives a good definition of the 36 critical disease and very informative. However, despite all the explanation. However, as I'm in the medical profession. For example, let us discuss the heart attack.

The definition of the heart attack under the critical illness is as follows:

(1) Heart Attack
The death of a portion of the heart muscle (myocardium) as a result of inadequate blood supply and being evidenced by:-

(a) A history of typical prolonged chest pain; and
(b) New electrocardiographic changes resulting from this occurrence; and
(c) Elevation of the cardiac enzyme (CPK-MB) above the generally accepted laboratory levels of normal.

The information stated that Trop T can't be used as indicator for claiming and it neither included angina.

In real life, from 100 person suffering heart attack, 50 of them will die on the spot. The rest of the 50 will manage to reach the hospital and 30 of them will die there. So only 20 will able to be kept alive by the emergency doctor.

Now the trick is here. Are 20 alive patient fit in the the criteria mentioned? Of course not as most of the chest pain patient are having angina. Trop T is an early indicator for the heart attack so that doctor can give the medicine fast enough to save the patient before it develop into full blown heart attack. My point is you seldom see any heart attack patient that fits all the criteria as mentioned. If you fit all the criteria above, the chance you you are still alive is very slim.

What it means by new ECG changes is very vague? During my practice as doctor, I never seen a successful case that can get the compensation as the insurance company will try look for any clue to defer it. Practically, medical insurance is more worth it but definitely not 36 critical illness. I have seen the statistic from one insurance agent, the rate of claiming is about 20 to 30 cases in a month. So, let say insurance company 1,000,000 people buying it (agent from Great Eastern told me), than the rate of successful claiming is 0.003% (30 cases in a month) BUT you must know that not all 36 illness are equally same. Some is very very very rare like muscular dystrophy. Are 30 cases that successfully claimed got full compensation? The answer is NO. The insurance agent normally tell you the maximum compensation which it is seldom occurred. So far, the agent only show me one case and the case was 15 year old case. What is the point?

I wish to discuss one by one the critical illness but it will be very lengthy to do that. My point is, why buying a protection with such a low probability? Chances that you will killed in an accident or others unfortunate disease e.g. dengue, malaria and others are much higher. Sometime, you just buy it for security feeling and you may feel protected but in fact it is not. You need to fit 100% the criteria stated in the agreement before u r eligible to claim.

My advise is live healthy from the beginning and be more health conscious, this is more practical then buying 36 critical illness.

Hi Cheong Peng, your view on this matter is absolutely justified and valid. An insurance policy is in fact just like any other contract, where two parties agreed with the terms and conditions, and in the event of any ambiguity, as long as one party can prove that the ambiguity has resulted in losses, then there's a high probability for the victim to be compensated.

It's also true that the probability of catching any of these 36 critical illnesses is like hitting the jackpot- extremely rare. I have mentioned this in my book, and in fact, like yourself, I have made the point that there's a higher chance of you being killed in an accident than catching one of these critical illnesses.

So, should one NOT buy a critical illness policy? Before I answer this question, let me paint a backdrop of how a standard insurance policy is drafted. I am not an actuary by profession, but I should be able to provide a general overview.

1) An actuary will design a product based on the probability (statistics) of certain events, for example, mortality rates. In this case, chances of people being diagnosed with critical illness (including the severity and variations of the illness) would be an important factor. Age, hereditary, and diet could be another set of considerations.

2) The Actuary will then assign a price tag which will determine the insurance charges for the benefits covered by the scheme he is designing. This will determine the premium that the policyholder will need to pay to ensure that he is protected by the policy's scheme.

3) The Actuary and the Insurer will then need to get approval from the Industry Regulator, the Central Bank of Malaysia to approve the new scheme, before it can be sold to the public. The Central Bank will be responsible in ensuring that the premium, the benefits, advertising & marketing information, and how the figures are derived meets the requirement set by the Regulator.

4) Once approved, the Agents will then be briefed on the new products and then can then start selling. New applications submitted by the agents will then be screened by the Underwriters using the guidelines determined by the Insurer.

So, that would be the overview of how a new product reaches the general public. Now, back to the question of whether should one refrain from buying an insurance policy just because the chances of claiming the benefits are low?

This question is almost the same as asking, "Why should I buy an insurance if I know I can't claim from it?"

The logic here is pretty straightforward, the risk of the Insurer paying the benefits has been taken into account when the Actuary was designing the product. They have already estimated the maximum amount of money that could be claimed at any given time, without putting the Insurer's own cash flow at risk. We must remember that these Insurers are profit organisations, and they are not about to insure a money-losing risk. I am not going to touch on the ethical side of the issue, but that's how an Insurer works- they still need to make a profit, after estimating the claim amount, operation and adminstrative expenses. It's a probability game after all, and the last thing a policyholder wants is buying an insurance policy from an Insurer that could not pay up the promised coverage.

So, let's say a policyholder would like to cover herself from a critical illness protection that encompass more variations of each illnesses and a more comprehensive coverage of each illnesses. Something in the line whereby it's enough to just have the Medical Practitioner says, "It's a heart attack" and the claim will be paid out to the policyholder. It's absolutely possible for the Insurer to come up with such a product, because they can easily just adjust the premium rate. The reason why they are not doing that is quite obvious- how many people can then cover themselves, when the premium skyrockets in proportion to the risk taken by the Insurer to provide a more encompassing and comprehensive critical illness coverage? The Insurer also needs to apply the law of large number as the basis of their risk protection business.

I am not saying the Insurers are doing a good job with their education programs through the agents. The policyholders must understand that it's a contract that they are going into, between the Insurer and themselves. Any parties that comes in between- agents, consultants, financial planners will not affect the terms and conditions of the contract after you have solemnly accepted it.

I would suggest that the policyholders do not rely solely only on the agents for their source of product information. Get a lawyer to vet through the details if you have to! You have been given the policy contract and at this point of writing, you are also given 30 days of free look period, whereby you can get a 100% premium refund if you are not satisfied with the policy. No question asked. So, please do yourself a favour by reading through the contract, word by word.

Hai. You chuan. First of all, thanks for the comprehensive explanation of the story behind. I have read through a few of the Malaysian Financial blog recently. I found out that some blogger just thinking of buying 36 critical illnesses, that he is covered of whatever considered risk protection. I think we should sit in the both side of the table to get a whole picture of it. As the premium that we paid to the insurance are all our hard earned money, don't simply use it even though how small the amount. Well, I wish to further discuss the 2nd critical illness disease..

(2) Stroke is defined as a cerebrovascular accident or incident producing neurological sequelae of a permanent nature, having lasted not less than six months.

Infarction of brain tissue, hemorrhage and embolisation from an extra-cranial source are included. The diagnosis must be based on changes seen in a CT scan or MRI and certified by a Consultant Neurologist.

The key word here is neurological sequelae of a permanent nature having lasted not less than six months. Normally stroke is divided in the hemorrhagic and ischemic (embolisation).

a. Hemorrhagic stroke - chances that you will awake is very slim for instance Yasmin Ahmad, she has got hemorrhagic stroke. You know how long she survived? It happened when one of your brain vessel is burst. Normally this kind of stroke happen suddenly, you can't predict it anyway. But I think the chances that you go heaven / hell is pretty much higher.

b. Ischemic stroke - If you kena this, most of the patients will still alert and know what is happening, you will realize that you have slurred speech, limb weakness. This kind of stroke has good prognosis and by controlling the risk factor and physiotherapy or acupuncture, you have high chance of gaining back you limb ability (so this is not fitting : neurological sequelae of a permanent nature having lasted not less than six months).

Some ischemic stroke might not have changes in the CT/MRI scan - so you lose again.

Let say you have ischemic stroke, would you like want to do what ever you can to regain as much ability as possible ASAP? Of course you do, so you are not eligible to get the compensation by the regulation.

I have no intention to dissuade people from buying the 36 critical illness. My concern is tell the reader my opinion in it. There is no free lunch in this world. The insurance company is not doing charity, they need profit as well. Chinese saying 'Goat Fur is coming from the Goat's body itself'. Whatever you claim is coming from other people, not the insurance company.

Another common mistake made by the public when come to claim the medical insurance is they will go to the most expensive hospital and made claim of whatever they can from the insurance company. I use to scold my patient for that.

Whatever you do now is going to affect your next generation. Your daughter and son is going to pay for the price (high premium for similar protection). This is the common practice from the private hospital - 'you are well enough to discharge but the hospital will keep you till you reach the maximum claimable limit before they let you go. This will explain why simple diarrhoea case will cause up to RM4000. The insurance company is feeding the hospital and public just paying their hard earned money. The vicious cycle just repeat and repeat again and again.

Cheong Peng, again, I think we are pretty much on the same page on this issue.

I think there are more than just the insurance companies, agents and policyholders involved here. We have to take into account the way our health institutions work as well as how they are regulated . If there's the need, we should even get the Statistics Department to ensure the transparency and integrity of the statistics used by these insurance companies.

Each of these entities are interlinked in this risk ecosystem.

First, we have touched a bit on the Insurance Companies. We know that they are all about profits. They basically just pooled everyone's money together and act somewhat like a trustee of the fund. They are also in charge of disbursing claims as long as the condition of the illness matches according to the wordings of the contract. Like you have mentioned, these Insurers are not stupid, policy wordings are almost always favorable to the Insurer. However, let's give them the benefit of doubts. It's a good thing none of the Insurers in Malaysia has a monopoly in the Malaysia insurance market, unless of course there are some underground insurance cartel that we don't know about. And if we can trust Bank Negara Malaysia to do her job, we should be expecting that the statistics used by the actuaries are up-to-date and realistic enough to be applied to all Malaysians. So, it would be foolish for any companies to offer any products that is not competitive as they might risk losing their market share. And not to mention, any bad press such as a valid claim not paid, can quickly be used as a tool by other Insurers.

On the insurance agents end, how many of them truly understand in-depths about the 36 critical illness in their product portfolio? Not all of them had medical backgrounds, and from the way you have dissected the policy wordings, I can assure you that if the agents are to explain to their clients like you had, I don't think they could have sold many of these critical illness products. The way these agents are trained and educated in a typical insurance sales agency, profit will always be priority. Though we are seeing insurance companies beefing up their in-house education program, let's not forget the ultimate bottom line of an insurance company, the emphasis will always be on the sales.

What about the health institutions? I am sure institutions like the Malaysian Medical Association and the Ministry of Health should play an important part in ensuring the health and medical policies are properly structured and most importantly, fairly priced so that every Malaysian can be entitled to some level of coverage.

However, what we are seeing is these days are rather the opposite. The cost of getting treatments are escalating by the day, and the attitudes of most doctors in private hospitals makes you think if you had mistakenly ended up in a business complex. With the rising cost of medical care, the premium that was charged to cover such benefits also escalated, causing even more woes to the people who need such coverage most.

We have so often heard about stories where patients are asked what cards (credit card or medical card) they have before they are even being given the chance to register at the counter. It doesn't matter if you are bleeding to your death, the motto seems to be 'No cash no cure'.

Of course, I am not saying that our health care system has gone to the dogs. I am very sure that there are still plenty of good doctors around who still puts lives before the dollar signs. However, the recent trend seems to reflect that our health care system is turning into a wealth care system for some of these profiteering private health care institutions. You know, they loved to say, "We'd to take care of our stakeholders too".

Now, let's turn our attention to the policyholders themselves. Policyholders who don't ask the right questions are just the type of customers that the Insurance Companies, insurance agents and the doctors love. There's really nothing much you can do about it.

If the policyholders themselves don't take the initiatives to be more well-informed and educated about the products recommended by these experts, then there's really no one to blame but themselves. They have to read the fine prints themselves. They have to get second opinions, or third if they are not satisfied. It's their own money at stake here.

Cheongpeng, I think what we've pointed out is only the tip of the iceberg. There are many things that can be done to improve the situation. Public awareness should be one of the main priorities. Policyholders have the right to know more about what they are buying. Insurance companies should make it a point to explain as best as they could how they are really covered.

The health care institutions should be monitored much more closely. Channels to complaint malpractices by health authorities or unethical practices should be made more accessible and patients' rights should be championed at all times.