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All About Critical Illness Insurance

People living in all countries around the world, whether native or expatriate, will want to be able to take care of their family should a traumatic accident or major surgery arise. This is one area where Critical Illness Insurance can be a literal life saver. Find out more about it here.

Posted on Nov 13, 2015 by Travis Jones

What’s the worst thing you can imagine happening to you? Some people would answer this question with “Death”, but, believe it or not, there are worse things in the world than simply dying. How could this be? Well, if you add crippling debt, burdening your family, and a long, drawn out period of misery before you (hypothetically) pass away and you can see just how bad things could really be. Even without a person’s expiration, the quality of life that someone experiences after a serious accident can turn not only their world upside down, but also their family’s world. Fortunately, there are ways that this kind of misfortune can be avoided.


How Critical Illness insurance works

Critical Illness Insurance is a type of insurance coverage that will pay out on a regular basis in the event that a policyholder is unable to work following a surgical procedure or other disabling accident.  This is a boon to individuals and families that cannot afford a loss of income, be it in the short or long term.

Critical Illness cover is oftentimes included as part of a more comprehensive Life Insurance or Medical Insurance policy. Of course, stand alone Critical Illness plans can be obtained if your existing insurances do not provide the level of coverage that you need, or, even more likely, a rider can be added to your existing policy that includes Critical Illness coverage.

Once a Critical Illness plan has been successfully claimed on, it is unlikely that the insured person will be able to obtain additional Critical Illness coverage. This is simply because insurance underwriters will likely not find it financially favorable to a person who has already claimed on a Critical Illness plan. This is important for buyers to be aware of, as they will probably only ever get one use out of Critical Illness cover, if they ever use it at all.


Features of a Critical Illness plan

An additional point to note about Critical Illness plans is that they sometimes come with a ‘survival period’ which is a particular amount of time after a surgery or traumatic accident that the insured must live before any benefits will be dispersed. A typical survival period is likely to last 2 weeks, although the amount of time may vary.

Another aspect to consider about Critical Illness Insurance is that benefits are normally paid out as a lump sum. This means that a single payment will be made for a predetermined amount at such time as the insured person is deemed to have a critical illness. (Be sure to check your policy for specific details on what this amount is.)

While most people would assume that this money would be used to address a person’s medical bills, the nature of the lump sum payment could allow for funds to be used elsewhere at the insured person’s discretion. For example, if a patient were to receive a US$500,000 lump sum payment from their Critical Insurance plan, and their hospital bills end up only amounting to US$300,000, that means that the patient will be able to use the remaining USD$200,000 on whatever they like, be it putting it towards a mortgage, buying gifts for family members, or simply putting it into savings.

There is no doubt that Critical Illness plans can literally be life savers, not only for individuals, but for their families as well. Plans can vary greatly (both with the amount of disbursements and the conditions under which a plan will pay out), so being aware of the specific details of a plan before you buy is important.

To discuss whether or not Critical Illness Insurance is right for you,contact us today! Pacific Prime’s knowledgeable and experienced team is standing by to answer all your questions, as well as provide you with plan comparisons and a free quote!

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