Compare critical illness coverage

What is critical illness coverage?

Critical illness coverage is an insurance policy that can help you pay off your debts and household bills if you become seriously ill and are unable to work.

Critical illness insurance usually pays a lump sum if you are diagnosed with a serious illness, such as cancer or kidney failure, for example.

Each provider will have policies that may exclude certain illnesses or conditions, so there is no guarantee on what they will specifically cover until you get a quote from the provider.

Critical illness coverage can be purchased with life insurance or on its own and can be used to pay off large debts like a mortgage and cover bills while you are unable to work. Here we explain what critical illness insurance covers and who it is for.

What is the difference between life insurance and critical illness coverage?

Critical illness coverage pays a non-taxable lump sum if you are diagnosed with one of the life-threatening illnesses.

Life insurance pays a lump sum if you die with money that goes to the person you nominate, such as your family to help cover bills while you are away.

Read on to learn more before you compare life and critical illness coverage.

What does critical illness insurance cover?

Critical illness insurance policies pay a lump sum if you are diagnosed with a life-threatening illness, such as cancer or kidney failure.

Critical illness insurance policies typically cover heart attacks, multiple sclerosis, heart bypass surgery, cancer, kidney failure, stroke, and major transplants. Critical illness insurance policies normally last for a specified period or until retirement.

You should read the policy document to see exactly what illnesses it covers, as less serious illnesses may not be covered, for example, skin cancer.

Although the initial premium is more expensive, choosing a critical illness insurance policy with guaranteed premiums, which remain the same for the duration of the policy, may be more useful for some.

Critical illness coverage with adjustable premiums is cheaper to start with, but will generally increase over time. Critical illness insurance policies normally pay only one lump sum and therefore do not replace income.

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