Insurance for critical illness is one of the several supplemental insurances that are available in the market. Chances are that you already have a personal life insurance for yourself and your dependents. Then why should you care about a critical illness insurance? In this article we discuss the exact reasons why you need critical illness insurance.
Read on to know more about this.
What is Critical Illness Insurance?
As the name suggests, critical illness insurance provides coverage against life threatening diseases like cancer, strokes, heart attacks, coronary blockages, organ transplants, etc. These are illnesses which are typically not covered by the usual life insurance policies. And if you are unlucky to contract one of these critical illnesses, then your personal insurance will not be sufficient to cover the huge expenses of treatment. Read more about what is covered by critical illness insurance.
In fact, critical illness insurance came into being in the 1990’s, when it was found that people were becoming destitute after paying for the treatment of heart attack and cancer.
How Does It Work?
A typical critical insurance policy comes with a list of illnesses that are covered under it. While some policies cover only a few, there are others that are more inclusive. Needless to say, with the expansion of coverage, the premium payable also increases. Additionally, while determining the premium amount, the insurance companies take into account certain factors like:
- General health of the insured
- Smoking habits
- The amount of cash to be made available in case of the illness etc.
In some cases combining the critical illness insurance with the existing personal life insurance results in optimizing the premium amount to be paid to your benefit.
Pros and Cons of This Insurance
One of the major advantages of a critical illness insurance is that unlike a personal insurance, in this case you receive the amount as a lump sum in case of the qualifying event. This means that you can use the cash to cover not only the treatment costs, but also to take care of other requirements like transport, living costs, hospice care, etc.
Another advantageous point is that the coverage received is substantial when compared to the premium paid. These critical illnesses are always costly and a simple life insurance is never enough to cover such expenses.
However, one con of the critical illness insurance is the fact that in some cases some illnesses are excluded from coverage. An example of this is certain types of cancer.
Why You Need Critical Illness Insurance?
Naturally, the question comes as to why you need critical illness insurance. If you are a healthy individual, it might seem a bit far fetched. But think of this as an investment towards your future. In the off hand chance that you or your loved one becomes critically ill, then you will find that your personal life insurance is ineffective in overing the cost of the treatment. In fact, sometimes personal insurances do not cover certain catastrophic illnesses. In such a scenario it is prudent to have a critical illness insurance coverage.
While deciding to buy insurance policies for yourself and your family, it is always a good idea to give some consideration to the critical illness insurance. After all it is a way of investing in safeguarding your future.