Critical Illness
Protecting your personal finances every step of the way
What Is Critical Illness Insurance ?
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).
Benefits of Critical Illness insurance
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.
Features of Critical Illness Insurance
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.
Types of Critical Illness Insurance
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. Â
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)
Payout is usually a one-time tax-free lump sum payment.
Factors such as age, gender, weight, health status and smoking status will affect CI insurance premiums. Family history will also be taken into account.
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.
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.
This will depend largely on your financial needs and budget..Â
We believe that everyone should have CI insurance because life is unpredictable and a catastrophic illness can be a major financial disaster.Â
This will depend on the on your age, gender, health and family history, as well as your coverage amount and period.Â
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.Â
- Only the illnesses listed in the policy are covered.Â
- 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
Under certain circumstances if there are errors with your name, address, age, or if you could like to increase or decrease the coverage amount . These can be done anytime provided a change form is completed.Â
No, if it is a 20 year term for example, the premium and the coverage amount will remain the same through the period.
This is a living benefit plan that payout if the insured person survives any of the covered illnesses.
Most policy is Age 65.
Some policies can provide coverage to Age 100. But most plans terminates by age 75.Â
Yes, you would be considered a smoker.Â
As of this writing, Covid-19 is not one of the covered illnesses
Yes, if they are in good health and are able to qualify for CI coverage.Â
Depends on what your needs are. If you have a high debt load and rely on your earned income, CI insurance should be considered.
Yes, the payout is tax free.
Some policies can provide coverage to Age 100. But most plans terminates by age 75.Â
Yes, you would be considered a smoker.Â
As of this writing, Covid-19 is not one of the covered illnesses
Yes, if they are in good health and are able to qualify for CI coverage.Â
Depends on what your needs are. If you have a high debt load and rely on your earned income, CI insurance should be considered.
Yes, the payout is tax free.
