Life has a lot of surprises! More challenging and exciting things may come along the way unexpectedly, which critical illness insurance can save financially. While you hope for the best, it is smart to play for the unpredictable situations of health.
Critical illness policy
The policyholder offers a lump sum payment. An illegible policyholder is diagnosed with a serious medical condition. The illnesses covered by insurance policy should be life-threatening. It prevents you from working or puts you under the burden of medical expenses.
Most commonly covered conditions included are:
- Cancer
- Kidney failure
- Heart attack
- Major organ transplant
- Stroke
- Multiple sclerosis
Each policy varies, you can read the terms and conditions to understand which illness is covered.
Why should you get a critical illness policy?
Critical illness coverage sends the policyholder extra financial support, even if you have regular health insurance.
- It pays for the things a health insurance cannot cater
- Health insurance comes with:
- deductibles
- co-pays
- limitations
- Critical illness insurance helps fill those gaps.
- It covers daily expenses while recovering.
- If you cannot work during recovery or treatment, the lump sum helps pay the following:
- mortgage
- rent
- utility bills
- childcare costs
- It gives you peace of mind
- Knowing you have a financial cushion in case of serious illness helps reduce stress during difficult times.
How does the policy work?
Critical illness policy is straightforward. You can follow this beginner guide on how the insurance works:
- Buying a policy and paying monthly or annually
- File a claim
- You may receive a lump sum payment after approval
- You can use the money without restrictions
It is not based on medical bills, but it is just a one-time payment you can use.
Who should consider getting the policy?
You can consider purchasing a critical illness policy when you belong to one below:
- People with high-deductible health insurance policy
- Self-employed people who do not have sick leave or employer-sponsored disability
- Those with a family history
- Anyone who wanted financial protection in a health crisis
Benefits from Critical Illness Policy
Primary breadwinners and parents
If your family relies on the income to keep everything running, a serious illness has an impact on your financial consequences. Critical illness policy will offer you a safety net, which covers the following:
- bills
- childcare
- replace lost income
Disability insurance covers part of the income when diagnosed with cancer or in need of months off work. The insurance covers part of the income, but it can give an extra cash cushion to cover the treatment.
Self-employed people and small business owners
There is no disability plan or employer-sponsored sick leave when running your business. Serious illness means no income at all, and the added pressure to keep a business afloat. A critical illness payout gives you breathing room for:
- to pay employees
- cover operating costs
- keep personal finances stable
Conclusion
Critical illness leaves you without spending from your pocket if you have chosen a high-deductible health insurance plan. A lump sum payout from the insurance helps bridge that gap and keeps you from getting a debt.
