Guard yourself against the financial burdens brought by serious diseases, such as strokes, heart attacks and cancer. Critical illness insurance offers protection against more than two dozen life-threatening conditions. After being diagnosed or requiring intensive care for previously-undiagnosed diseases, you’ll receive a lump-sum benefit after a 30-day waiting period that’s entirely free of taxes.
It is sometimes referred to as catastrophic illness insurance. It makes a lump sum payment if the insured person survives a certain period from a list of covered illnesses ( some plans can cover up to 28 illnesses).
Medical technology has made it possible for individuals to survive serious illnesses such as a heart attack or cancer but often at the cost of their financial resources. . A CI insurance policy would give the insured the flexibility to use the payout, without restrictions, to aid in their recovery.
Most CI Insurance plans will have the following features;
– Cover up to 28 illnesses
– Option of term 10 or 20 year coverage period or to Age 65 or 100
– Can also choose a Return of Premium Rider that would allow premium to be returned at the death of the insured or expiry of the plan. Riders are optional benefits that can be added to the policy.
– Can also add a disability waiver that waives your premiums, usually after 6 months, after you are unable to work your regular occupation.
Both term and permanent CI insurance plans are available. Ie; term 10, 20 and term to Age 65; as well as permanent coverage to Age 100.
When is the right time to buy Critical Illness Insurance?
Definitely, before you are diagnosed with any of the covered illnesses. It is always a good idea to get CI insurance if you are carrying a mortgage, other debts and have dependents.
How much Critical Illness Insurance cover do you need?
The rule of thumb is to cover at least 6 months of living expenses. This would include:
– Loss of income from your job
– Replacement of at least 3 months income of spouse’s job
– Mortgage/Rent payments
– Loans and credit card payment
– Housecleaning and childcare support
– Home modification
– Equipment
– Miscellaneous expenses (ie; hospital parking & transportation)
What are the payout options of Critical Illness Insurance?
Payout is usually a one-time tax-free lump sum payment.
What are the factors that can affect Critical Illness Insurance premiums?
Factors such as age, gender, weight, health status and smoking status will affect CI insurance premiums. Family history will also be taken into account.
What is a Critical Illness Insurance rider?
A CI insurance rider is an optional benefit that can be added to your policy. It can include such things as; Return of premium rider on expiry of coverage and disability waiver premium.
Who should buy Critical Illness Insurance?
Anyone who has a mortgage, high debt load and dependent children and not enough money to tie them over if they develop a serious illness.
Which type of Critical Illness Insurance cover should I get?
This will depend largely on your financial needs and budget..
Who shouldn’t buy Critical Illness Insurance?
We believe that everyone should have CI insurance because life is unpredictable and a catastrophic illness can be a major financial disaster.
How much does Critical Illness Insurance cost?
This will depend on the on your age, gender, health and family history, as well as your coverage amount and period.
What are the pros and cons of Critical Illness Insurance?
Critical Illness Insurance
PROS
- It pays out a lump sum benefit if you are suffer from any of the covered illnesses
- Payout is tax free
- There is no restriction on how the insured person is to use the payout.
- Payout is unaffected by other benefits you might receive from other sources.
- Some policies have early recovery benefits that shortens the waiting period to submit a claim.
- Insured person would also have access to specialized medical care and consultation.
CONS
- Most plans pay out on one illness then the policy terminates.
- The wording for the covered illnesses is not always clear and can cause confusion when there is a claim.
- Most covered illnesses have a 30 day waiting period.
- Only the illnesses listed in the policy are covered.
- Family medical history plays an important role in how an CI application is underwritten.
What to do when you get your Critical Illness Insurance policy?
As with all insurance policies, you exam the policy for accuracy. Go over the plan with your Insurance Agent/Broker to ensure that you understand what illnesses are covered and under what circumstances you can submit a claim.
FAQ
