Life is unpredictable. Even your existing insurance policies like life insurance and health insurance don’t provide adequate coverage in an untimely event like an illness or a critical injury. Have you ever thought about how you will manage your retirement accounts if something unexpected is to happen in the near future?
A hospital bill for an illness like loss of limbs, occupational HIV exposure, coronary artery- bypass surgery, or, god-forbid, heart valve replacement can easily wipe out your savings. This is where critical illness insurance comes into play. It takes care of you so you can focus on what’s important.
What is Critical Illness Insurance?
Critical illness insurance is a health insurance policy that is formed in a way to pay for your medical bills and other expenses if you were to fall sick of any of the diseases mentioned in the policy. After the diagnosis, you will receive a lump sum cash payment after a set period. This money can be utilized for your further treatment or used as a supplemental fund for your retirement accounts.
Why do I need Critical Illness Insurance?
Diseases like cancer, heart attack, or stroke can make you sick enough to make it difficult to go to work. Loss of a job can invite a litany of other problems while you are still sick and recovering from the illness. In such a dire circumstance, you don’t want yourself and your family to go through financial hardships. This is why investing a small amount in critical illness insurance is necessary.
Critical illness insurance can be purchased as additional coverage for your life or health insurance policy; which is called “bolt-on” benefit–in insurance industry jargon. Along with you, your family members who depend on you can also benefit from the one-time lump sum payment. The policy also pays partial premiums for your mortgage.
What is covered under Critical Illness Insurance?
A few decades ago, critical illness insurance only covered major illnesses like heart attack, cancer, stroke and coronary artery by-pass surgery. But lately, the policy also has begun to shield you from losses incurred by less-known illnesses like Parkinson’s disease, benign brain tumor, bacterial meningitis, aplastic anemia, and motor neuron disease.
By the tried and trusted process of underwriting, the insurance company assures you of guaranteed payment in case you suffer from one of the diseases covered by them. In this process, factors like your age, gender, medical history, habits, etc are taken into account. Healthy and addiction-free candidates can expect to pay lower premiums and get their application approved without any hassles.
Critical illness insurance has become a norm in countries like Canada, South Africa, England, and Australia. It is still new and underused in the United States as most people solely rely on their life or health insurance. Hence, I recommend seeking advice from your insurance agent about getting yourself critical illness insurance.