Critical illness insurance cover is an insurance policy, where the insurer must sign a contract with an insurance company to gain some typical benefits. Generally in such policies the insurance company makes a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed in the insurance policy.
Some of the illnesses that are commonly categorized as critical illness are:
* Alzheimer’s disease
* Blindness and Deafness
* Kidney failure
* Terminal diseases like cancers of various kinds
* HIV/AIDS
The purpose of critical illness cover is to fill a gap that is left by traditional life insurance policies, which will only provide a pay-out on the death of the policy holder. Critical insurance cover provides a tax free lump sum following the diagnosis of one of a number of life-threatening illnesses or certain types of surgery.
Critical illness insurance policies are sold to cover mortgage repayments. They are often sold alongside a life insurance package to ensure the borrower can repay the loan in all circumstances. When an insurer goes for a combined life insurance and critical illness cover package is taken out, then it would not be unusual for an insurer to pay out for only one of the events. So, if the policy holder suffers a critical illness and then dies at a later date, there will only be one pay-out, for the initial illness. It is essential whenever you go for a policy that you make sure it covers all of your needs and those of your family. There is no real rule to estimate how much cover one may actually need. You will additionally need to consider the period for which you want critical illness cover, such as a set number of years to cover the mortgage or no fixed period at all, so you can maintain the policy as long as you need it.
The critical illness insurance market has come under increasing pressure in recent years, as the number of claims has soared, survival rates increased and medical science has made it far easier to detect serious conditions much earlier. These factors have prompted some serious questions about the viability of critical illness cover, particularly guaranteed products.
For many, the most important benefit of critical illness insurance is to protect their mortgage. Most mortgage protection policies allow you to include life insurance and critical illness cover. If you already have life insurance in place, you can buy an additional, separate critical illness insurance policy.
Source by Adolphpaul
