Life Insurance and Critical Illness Cover Author:    Posted under: Life InsuranceLife Insurance questions answeredLife Insurance Types


Critical illness cover is usually obtainable when purchasing a life insurance policy, at an added cost. First offered in South Africa in 1983, it has since gained popularity in Europe, Canada and Australia, in countries that offer nationalized healthcare. Critical illness cover is now also beginning to gain recognition in the United States as inadequate health insurance leaves thousands, possibly millions, of families in financial ruin every year.

Critical illness cover provides a lump sum amount to the policyholder within 30 days that he or she receives a diagnosis.

Why critical illness cover should be considered when taking out a life insurance policy

The truth of the matter is you, or your loved ones who are dependent on you, have a pretty big chance of facing great financial challenges should you become critically ill. The cost of health care alone is staggeringly high, and if your illness renders you completely unable to work, the outlay of your family’s basic day to day needs, debts and mortgage payments will add to your worries. Critical illness cover will be able to alleviate your financial uncertainties and you’ll be able to focus on recovery efforts rather than making ends meet.

Which critical illnesses are covered?

Coverage for different critical illnesses varies from one company to another and even from one policy to another. It is also important to note that the heading for each critical illness used here is only a guideline as to the coverage; for example, some types of cancer are not covered. It is always best to talk to your insurance provider to get particulars with regards to the details of your policy.

Examples of conditions that might be covered include, but are not limited to:

  • Cancer
  • Heart attack
  • Kidney failure
  • Stroke
  • Alzheimer’s disease
  • Major organ transplant
  • Paralysis of limb
  • Terminal illness
  • Third degree burns
  • Blindness
  • Deafness
  • Parkinson’s disease

Again, it is important to note the different illnesses that are included and excluded from different policies when comparing for the purpose of buying critical illness cover.

In the U.S., the money received by the policyholder from his or her critical illness cover may be used for a number of things:

  • To pay for critical medical services that might be unavailable due to a lack of health insurance
  • To pay for treatments that are not covered by their health insurance
  • To pay for basic daily living expenses
  • For transportation expenses, to get from their homes to treatment centers
  • To pay for modifications to vehicles and homes to accommodate wheelchairs and the like

As with most insurance policies, you will be expected to pay a premium for critical illness cover. Your premium will be determined by your age, sex, occupation, and condition of your health, whether or not you are a smoker, your family’s medical history, and the amount and type of coverage you wish to obtain. Additionally, most insurance companies will not provide cover for individuals who have already been suffering from critical illness prior to obtaining critical illness cover. In the event that you are able to obtain coverage while already suffering from critical illness, you will be expected to pay a steep premium, much higher than what is considered as the ‘standard’ rate. Still other companies will only allow you to buy a policy that does not cover any critical illness directly or indirectly associated to your illness.

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