Critical Illness Protection Will Always Come In Handy
Critical Illness insurance is a type of insurance that can provide a lump sum cash benefit to the insured if they are determined to have one of the critical illnesses identified in their insurance policy. This type of insurance was introduced in the late 1990s to help individuals cover their expenses associated with various critical illnesses.
Critical Illness insurance is applicable to any individual who is concerned about the risks of critical illness. The three primary illnesses covered under critical illness policies include heart attack, stroke and cancer. However, these policies may also cover conditions such as heart transplants, coronary bypass surgery, kidney failure, angioplasty and paralysis. Individuals may need this insurance for a variety of reasons, such as to pay for their medical treatments that are not covered by their health plan or to pay for their mortgage when they are recovering. Other reasons may include having cash to replace a spouse’s income while they are caring for the insured, and to pay for travel for treatments not available in the local market.
Critical illness policies work by significantly reducing the financial losses that are normally incurred without the insurance. As soon as an individual is diagnosed with a covered condition, the insurance company provides a single lump sum payment that is tax-free. Depending upon the specific policy, these cash payments can range anywhere from $10,000 to $1 million. In addition, some policies will provide multiple cash payments for separate critical illnesses. For example, if an individual is diagnosed with cancer and survives, they will receive a cash payment. In addition, they will receive another cash payment in a few years if they suffer from a heart attack.
There are essentially two types of critical illness policies, Simplified Individual Protection and Fully Underwritten Individual Plans. The Simplified Issue Individual Protection plans are issued after just a few health questions, are generally affordable and are available in amounts up to $50,000. Fully Underwritten Individual Plans are issued after medical information has been provided to the insurance company, and they are available in higher amounts.