Critical Illness insurance is usually not included in most group insurance plans. That’s why this coverage is so important. Critical illness insurance eases the financial burden brought on by missing work due to a serious illness. In fact, the financial repercussions put on dependents in the case of the primary earner falling gravely ill can be far worse than a sudden death. This is because if you’re unable to work, you may have a hard time paying living expenses. A critical illness insurance policy can help in the form of a tax-free lump sum payment shortly after a diagnosis.
Critical Illness Insurance Basics
Typical critical illness insurance policies pay a lump sum directly to the policyholder. These funds are to be used as the policyholder sees fit. The funds can go towards medical expenses or to other expenses such as mortgage payments and groceries.
There are policies that offer additional benefits. One such benefit is the ability to have your premiums refunded to you in full upon the maturity of the policy or upon death. While this type of policy is more expensive, it’s like a savings plan, where if you don’t end up making a claim, you receive your premiums back.
It may be worth noting the typical conditions and illness that are often covered by critical illness insurance plans. These include the following:
• Alzheimer’s disease
• Loss of hearing
• Kidney failure
• Major organ transplant (e.g. heart, lung, liver, pancreas)
• Multiple sclerosis
• Parkinson’s disease
• Terminal illness
• Heart attack