Cover for treatment costs and income lost during recovery.
Critical illness cover to buy
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Treatment
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Income replaced
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Less existing cover
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Why a critical illness payout has two jobs to do
A serious diagnosis hits your finances from both sides at once. There is the bill for treatment, which for cancer, a heart bypass, or a stroke can run into the hundreds of thousands or even millions of pesos at a private Philippine hospital. And there is the income you stop earning while you recover, which can stretch across many months. A critical illness rider or standalone policy pays a single lump sum on diagnosis, and that lump sum is meant to absorb both shocks. This calculator sizes the cover by adding the two together, then trimming the part your existing health protection already handles.
The reason a lump sum matters is timing. PhilHealth case rates and most HMO plans reimburse against actual hospital charges, so they shrink your bill but rarely replace a single peso of lost salary. A critical illness benefit is paid in cash, with no strings attached to receipts, so it can cover the mortgage, the kids' tuition, and the months you spend not working. Treating those as one combined need is the honest way to set the figure.
The number this tool lands on
The formula is deliberately simple so you can sanity-check it by hand. Cover needed equals estimated treatment cost, plus monthly income multiplied by the months you want replaced, less your existing health coverage. The existing-cover figure is subtracted because PhilHealth benefits and any HMO or company plan already chip away at the treatment side. If that subtraction would push the result below zero, the tool floors it at PHP 0 and tells you your current protection already meets the modelled need.
Take the default inputs. A treatment estimate of PHP 1,500,000, a monthly income of PHP 50,000 you want covered for 12 months, and PHP 200,000 of existing health cover. The income replacement is PHP 50,000 multiplied by 12, which is PHP 600,000. Add the treatment and you reach PHP 2,100,000 of gross need. Subtract the PHP 200,000 of existing cover and the calculator recommends PHP 1,900,000 of critical illness cover to buy.
| Step | Amount |
|---|---|
| Estimated treatment cost | PHP 1,500,000 |
| Income replaced (PHP 50,000 times 12 months) | PHP 600,000 |
| Gross need before offset | PHP 2,100,000 |
| Less existing health coverage | PHP 200,000 |
| Critical illness cover to buy | PHP 1,900,000 |
The chart below shows how those pieces stack into the gross need, and where the existing cover is carved back out.
Setting each input honestly
The treatment figure is where most people guess too low. Pull a realistic number from a private hospital's package rates for the conditions that run in your family, and remember that chemotherapy or dialysis is a recurring cost, not a one-off admission. For income replacement, 12 months is a sensible starting point for a salaried worker, but a self-employed earner whose business stalls without them may want 18 or 24 months. The existing-coverage box should reflect what your PhilHealth case rate plus HMO annual limit would actually pay toward the illness, not the headline plan value.
One practical judgement: critical illness cover is usually cheapest to lock in while you are young and healthy, because premiums are priced on your age and medical history at purchase. Waiting until your forties to buy can multiply the cost, and a condition diagnosed in the meantime may be excluded.
Does PhilHealth replace the need for critical illness cover?
No. PhilHealth and its Z Benefit packages reduce the hospital bill, which is exactly why this tool subtracts your existing cover from the treatment side. What PhilHealth does not do is hand you cash to live on while you cannot work. That income gap is the second half of the need, and it is the part a critical illness lump sum is built to fill.
Is a critical illness payout taxable in the Philippines?
Proceeds from insurance paid on the occurrence of an insured event are generally received tax-free by the beneficiary, which is part of what makes a lump sum so useful. Tax treatment of insurance proceeds can be specific to the policy and the payer, though, so confirm the current position with the Bureau of Internal Revenue or a licensed insurer before you rely on it for planning.