Critical illness insurance

From ArticleWorld

Critical illness insurance is termed as an insurance cover that either pays out a lump sum or provides an income if the insured is diagnosed as having one of a number of illnesses(mentioned in the insurance policy), including cancer, strokes and heart disease and survives a number of days (also mentioned in the policy). The policy also pledges to pay out even if the insurer subsequently makes a full recovery.

How it works

Plenty of medical conditions and illnesses are not immediately fatal, increasingly due to the modern improved medical facilities. However, they hamper the life style of the patient, many times rendering him/her unable to continue with a job and earn a living. Heart disease, strokes and cancer are the most common causes of death but advances in medical science mean that more people survive these serious illnesses every year and the victim might well live on for decades afterwards. This is where critical illness cover comes in and is placed along with or as an alternative to a life assurance policy.

Critical illness insurance is a cross between health insurance, life insurance, disability insurance and long-term care insurance. Like life insurance, critical illness insurance is purchased in lump sum amounts but unlike life insurance the insurer does not have to wait until death to receive payment; rather the lump sum that the insured was insured for is given immediately after a certain survival period (usually a month) from the date of diagnosis.