This is a cover that pays a lump sum (tax-free) when one is diagnosed with a certain defined life-threatening illness during a policy term. As long as one keeps paying the premiums, he or she will be covered throughout the entire term. Immediately a policy term ends, the complete protection stops. You need to decide how long the policy will last when signing up for the plan.
Critical illness insurance can be combined with term life insurance. If this is done, you will only claim once. For instance, in case you get a payout after you are diagnosed with a certain form of cancer, the policy gets effectively finished. There won’t be another life insurance payout when you pass on later.
The illnesses covered by this insurance plan will depend on the insurer. But, policies will commonly cover strokes, heart attacks, some types of cancer, as well as optional add-on illnesses.
Different people need this insurance cover for various reasons:
If you have kids and you would like to make sure that your family doesn’t lack anything because you can’t work due to your illness. When recovering from an illness, you and your family will incur extra costs. The payout can be used to pay for these expenses. If you are single, you’ll need a policy that ensures the mortgage is paid.
Many people do benefit from this illness cover, but the premium’s impact and the benefits will differ from one person to another. One has to weigh up the monthly costs against the payout benefits. If you depend heavily on the salary, you will need this kind of protection.
You will also come across other plans availed by employers on a voluntary basis and paid fully by the employee.
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