Critical illness insurance is appropriate for certain types of people. Who are they? What benefits will they receive under this policy? What are the factors to consider before applying for this policy?
Here are the answers to the questions above and more.
Let’s start with the simplest definition of critical illness insurance.
What is critical illness insurance?
Critical illness insurance covers a policyholder against critical diseases. Some examples of these life-threatening illnesses are cancer, stroke, heart attack, renal failure, and more. The policy has a lump sum coverage to cover the high medical expenses incurred for treating the disease.
As such, it is specifically designed to absorb out-of-pocket medical costs associated with having life-threatening conditions. These include prescriptions, treatments, and deductibles.
The lump sum is given to the policyholder upon the diagnosis of the disease or when a major surgery like an organ transplant is scheduled. The waiting period is between 30 and 90 days before the insured will receive the benefits.
Some policies allow partial payments, particularly for severe medical conditions that developed while the insurance is active.
Who may benefit the most from critical illness insurance?
If you are one of these people, then this coverage is perfect for you.
- With a family history of life-threatening illnesses
Several critical illnesses are hereditary. So if you have someone in the family suffering from this condition, your risks are higher. While the risks may not be minimized by having insurance alone, you may preempt the consequences of having an illness more so financially.
- Primary breadwinners
Breadwinners play a paramount role in the family. If something happened to you, your family would have to have financial hardships. This is true for single-income families. So earning family members are advised to obtain this insurance, especially when there’s medical history.
- With high-pressure jobs
High-pressure jobs have a direct association with critical illnesses, mainly due to the levels of stress that these workers experience. Lifestyle and genetic factors also play a part in the increased risk of developing a condition. These people would benefit from opting for this policy.
- Over the age of 40 years
Even healthy-living adults may contract an age-related critical illness. Their susceptibility is indispensable. So the next best thing is to put a premium on health by securing a critical illness policy.
Nowadays, the people’s sedentary lifestyle, which is considered the culprit behind the rise of all kinds of medical conditions, warrant a critical illness policy. That’s one side of the equation, though.
The other side is the fact that people contracting these diseases are getting younger. Generation Y or millennials are now more prone to illnesses. So they should take a more proactive role with their health by getting an insurance product that fits their lifestyle and needs.
How critical illness insurance benefits the policyholder?
Most importantly, critical illness is a reality. Treatments for critical illnesses are not cheap. Medical technologies are getting sophisticated by the day, which contributes to the treatment costs. With a policy like critical illness insurance, you may afford the best treatments without worrying about the sky-high prices of medicines and treatments.
Ultimately, like any other insurance product, this policy gives you peace of mind and a sense of comfort. Facing the consequences of a critical illness is financially draining. The lump sum can help you pay for the medical bills while also allowing you and your family to continue living the lifestyle you can afford.
Can I avail a critical illness coverage as a rider?
Critical illness coverage can be availed as a rider of a regular health insurance plan. The advantage is that you will pay a reduced cost. However, the benefits may not be similar to that of actual critical illness insurance. There would be restrictions, including the lack of flexibility regarding the sum assured to you a the policyholder.
Better yet, if you belong to the high-risk category, you might as well buy a standalone policy. This is more so if paying monthly premiums is not an issue.
Other tips when availing a critical insurance policy
The tips and hacks below will also help.
- Know the illnesses covered in the policy. The list you see online could be indicative and not exhaustive. Ask your agent about the inclusions.
- Learn about the exclusions as well. The list of critical conditions is the list of circumstances that the policy does not cover (e.g., diagnosis during the waiting period, illnesses due to smoking, and illnesses while deployed in a military operation).
- Discern clauses on one-time and repeat payouts. Some insurance providers cover the second incidence of the same illness; others don’t. Also, determine if the second incidence will be paid in partial or full.
- Avail the policy as early as you can afford it. The older you are, the higher the premiums that you need to pay. So don’t delay.
Being prepared for your future by staying financially prepared means winning half the battle. So don’t put off whatever you can do today, and that’s buying critical illness coverage.