Critical illness insurance,
otherwise known as a dread disease policy, is an insurance product in which the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the specific illnesses on a predetermined list such as cancer, heart attack or stroke, this policy is structured to pay out regular income and the payout may also be on the policyholder undergoing a surgical procedure, for example, having a heart bypass operation or kemo theray or even an accident.
Due to the fact that the incidence of a condition may decrease over time and both the diagnosis and treatment may improve over time, the financial need to cover some illnesses deemed critical.
The actual conditions covered depend on the market need for the coverage which means that depending on the insurer some conditions such as diabetes and rheumatoid arthritis, among others, may or may not be covered, some policies require that a policyholder must survive a minimum number of days (the survival period) from when the illness was first diagnosed. The survival period used varies from company to company, however, 14 days is the most typical survival period used.
Some policies will or will not cover
- Alzheimer's disease
- blindness
- deafness
- kidney failure
- A major organ transplant (e.g. heart, lung, liver, pancreas)
- multiple sclerosis
- HIV/AIDS contracted by blood transfusion or during an operation
- Parkinson's disease
- paralysis of limb
- terminal illness
which can be added with a rider, depending on what you are
looking for.
Critical Illness Facts.
Critical illness insurance can help you pay for unexpected medical and non-medical expenses if you are diagnosed with critical illness or a critical illness such as a heart attack or stroke.
Cancer and critical illnesses are more common than you may think. Americans face the following risks:
- One-half of all men and one-third of all women are at risk of developing critical illness during their lifetimes.
- Heart attacks are the leading cause of death for both men and women.
- Strokes are the fifth leading cause of death for both men and women.
A critical illness insurance plan provides up to $100,000 in coverage that you can use for any purpose after your diagnosis, such as medical treatments, living expenses, and transportation services. You may be ineligible for coverage if you have already been diagnosed with critical illness.
