Critical illness insurance is an insurance policy where an insurance company makes a lump sum cash payment to the insured if the person who has the policy does not have a major illness during the length of the policy. Examples of critical illnesses are a stroke, cancer, heart attack, heart disease that requires surgery, angioplasty or other treatments for coronary artery disease and heart valve replacement.
This kind of insurance policy was created in the late 1990s as many were concerned about surviving a serious illness and having to pay very high medical bills.
What does major illness insurance cover?
It is important to note; major illness insurance can pay for medical costs that are not covered by traditional insurance. The money from major illness insurance can also be used to pay for non-medical costs related to the illness such as child care and transportation.
Are there exceptions to critical illness coverage?
There are exceptions to critical illness coverage. Some cancers may not be covered, as well as chronic illnesses. In addition, coverage may also be eliminated if a disease comes back or if you suffer a second heart attack or second stroke. Also, coverage may end if the insured reaches a certain age.
What are the benefits of major illness coverage?
There are several benefits of critical illness coverage. First, it functions as a replacement for income. When a person is critically ill, it can have a major impact on a family’s finances. Another benefit is that it gives tax benefits. Critical illness money is tax-free. Most importantly, critical illness coverage provides peace of mind. Instead of searching for money to pay for your critical coverage needs, you have the peace of mind knowing that you don’t have to worry about paying off your illness expenses.
In addition, critical insurance coverage also covers treatment that takes place in a foreign country. This can be a lifesaver for those who want to go abroad to get additional medical treatment.
Other benefits of major insurance
An additional benefit of this kind of policy is that in most cases, they are affordable. However, for seniors there may be limits for payout on some policies and many policies do not provide a guaranteed payment. All you need to do is to explore your options regarding the critical illness insurance beforehand.
Tips that may help before purchasing a major illness policy
The type of policy you are seeking for this kind of coverage should be considered with a critical illness policy. With a critical illness policy, you can get a life insurance policy with a critical illness rider or purchase combined life insurance and major illness insurance policy. It is also important to look at the list of critical illnesses being covered. Also, check the policy to see if any certain illnesses are covered, those which you may be vulnerable to.
In addition, think about your current medical condition and medical history. This is important because your insurance company will look carefully at health and could affect your premiums and the level of coverage you have. Also, by purchasing this insurance while you are healthy, will ensure that you get full coverage.
Also, give good thought to your current finance. If you are doing well, then there is no need to be concerned; however, if you are still paying for many long-term debts, you may want to get a higher level of coverage to ensure that you have enough to pay for these loans.
Other questions to consider:
- In your family, is there anyone else who is earning an income?
- What are the ages of your children and dependents?
- How many years do you have before you pay off your mortgage?
- What is the total amount of your debt?
- How much life and critical illness coverage do you need?
Type of policy
Before purchasing a critical illness policy, think about the kind of policy you need. Do you need a separate critical illness policy, life and critical illness policy combined or a severity based policy?
How are major illnesses defined? Premiums vs. budget?
Always purchase a policy according to what you can afford. And, find out if your employer provides you with critical illness coverage. Most importantly, find out if the policy you are interested in is guaranteed renewable without you having to go through another medical exam.
To conclude, major illness insurance is an insurance policy where an insurance company makes a lump sum cash payment to the insured if the person who has the policy does not have a major illness during the length of the policy.
Talk with your insurance agent soon and find out additional information about this kind of insurance and how it might help you and your family. Major illness can wreak havoc not only with your health but also your finances. Don’t be left out at a time when you need extra help.