Critical Illness Insurance Author:    Posted under: Health InsuranceHealth Insurance Types


Critical illness insurance is a policy intended to relieve financial pressures by means of paying what is called a lump sum, free of tax in the event that the policyholder becomes seriously sick or completely disabled. This policy differs from one provider to the next, but all of them require that the policyholder, after becoming ill or disabled must normally survive a certain amount of time before the policy will pay out.

Critical Illness Insurance was originally known as dread disease coverage. This means that the policy covers you or pays benefits should you be diagnosed with specific illness or illnesses.

Examples of core conditions that most if not all policies should cover are: Stroke, cancer, kidney failure, coronary artery bypass, major organ transplant, heart attack, multiple sclerosis. Also, the policy makes that the company will pay out if the insured becomes disabled as a result of an illness or his or her injury.

In May 2003 though, the Association of British Insurers set up rules which were absorbed by insurers that tightened the conditions under which customers could claim on critical illness insurance (CII) policies. This means not all conditions are necessarily covered.

Part of this changes added that policies won’t cover conditions such as less advanced cases of prostate cancer, and non-invasive skin cancers. Also, tumors that have not yet invaded the organ or tissue are excluded along with lymphoma or Kaposi’s sarcoma in the presence of HIV.

Furthermore, more restrictive conditions for heart attacks require evidences of typical chest pain, for example: changes in the electrocardiogram (ECG), if that claim is to be successful. Cardiac conditions will also not be covered.

If you are part of a couple, this provides a financial enhancement at a time of emotional stress and financial adversity but for people that have no dependants or no spouse, having critical illness cover is more important and useful than having life cover, this is because you don’t really have a beneficiary who will use the benefit when you are gone, and getting treatment would be a better use of your money.

Critical illness insurance helps you reduce your financial burden by paying off or reducing your mortgage, credit cards or other debts. It can also help maintain your independence by having means to modify your home or even your vehicle to improve your mobility inside and outside your house. Also, it allows you to access cutting-edge medical services like in Canada where you can pay for medications and treatment not covered by provincial health plans. You may also spend more time with your family or use the money benefited in ways that can help you keep focused on getting well.

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