CRITICAL ILLNESS INSURANCE
Support When You
Need It Most
Critical Illness Insurance
Critical Illness Insurance is a policy that gives you a one-time lump sum tax-free amount up to the sum insured upon diagnosis of a critical illness covered under the policy. Most of the policies have a 30 day waiting period which means that after the diagnosis of the covered condition the benefit will be paid out after 30 days and the policy will terminate. Usually a Critical Illness policy provides coverage for 25 conditions, but some policies cover 3 to 5 conditions where most of the claims come from like Heart Attack, Cancer and Stroke.
Benefits of Critical Illness Insurance
Critical Illness can affect anyone at any time. That’s where Critical Illness Insurance can help. Critical Illness Insurance supports you when you need it most. It provides a lump-sum tax-free payment should you become seriously ill. It gives you financial security and support to help you cope during a challenging time. The following are the benefits of Critical Illness Insurance:
1. Living Benefit: Critical illness insurance is a living benefit policy and provides a lump sum benefit which you use while you are alive and hence have become an important health insurance product gaining popularity due to its benefits.
2. Tax Free Benefit: The insurance company pays a tax-free lump-sum amount if a claim arises.
3. No Limitations: There are no restrictions on how to spend the benefit amount received. You can decide how to spend the tax-free benefit received as per your wish.
4. Comprehensive Coverage: Coverage of the conditions may vary among various providers but most of the policies provide protection for up to 25 conditions.
5. Return of Premiums Options: There are policies that provide you with 100% of the premiums that you paid back if you never make a claim or if there is a sudden death due to any other cause at an added cost.
6. Customization: Policies can be customized as per your individual needs. Both term as well as permanent critical insurance policies are available. Optional riders can be added at additional cost to provide more flexibility and benefits.
7. Renewable & Convertible: Almost all of the critical illness insurance policies have in build renewable and convertible options option within the policy.
Types of Critical Illness Insurance
There are two types of critical illness insurance – Term critical insurance and Permanent critical insurance. Products options are similar to Life Insurance .You can buy Term 10, Term 20 or Term to 65, 75 or 100. Some providers also have permanent critical illness insurance plans. It is highly recommended to speak with an experienced licensed advisor to review your current situation and needs to determine what product is right for you
Common Uses for Critical Illness Insurance Payout
If you are diagnosed with a covered critical illness, you will get a lump-sum payment tax-free. The payout from critical illness insurance can be used for lots of things, including to:
- Pay off mortgage or rent
- Pay off loans and other debts
- Restore lost income
- Monthly living expenses
- Healthcare Expenses
- Treatment overseas
- Protect your family's lifestyle
- At Home Care (Nurse)
- Renovation or modification to your home or vehicle
- Protection of Retirement Savings
What Conditions are covered under Critical Illness Insurance?
You should always review the plans carefully to make sure what conditions are covered. Different providers have different covered conditions but, the following are some of the most commonly recognized critical illnesses in the insurance industry:
- Major Cancer
- Heart Attack (may or may not result in a payout)
- Stroke with a permanent neurological disorder
- A coronary artery by-pass, or open-heart surgery
- End-stage kidney failure
- End-stage lung disease
- End-stage liver failure
- Coma
- Permanent loss of speech
- Major Burns
- Major organ or bone marrow transplant
- Multiple Sclerosis
- Muscular Dystrophy
- Idiopathic Parkinson’s Disease
- Alzheimer’s Disease / Severe Dementia
- Primary Pulmonary Hypertension
- HIV Due to Blood Transfusion & Occupationally Acquired HIV
- Benign Brain Tumour
- Encephalitis
- Severe Bacterial Meningitis
- Blindness
- Paralysis
- Terminal Illness
Do I need Critical Illness Insurance if I have Disability Insurance?
Critical illness insurance and disability insurance are not the same, but both of them are very important for the individuals relying on their paycheque to meet their monthly expenses and support their family. While you have the option of one or the other, it is advisable and in your best interest to consider both, because both of them complement each other. The following comparison may help you decide which one you need and is suitable for you.
| CRITICAL ILLNESS INSURANCE | DISABILITY INSURANCE | |
|---|---|---|
| 1. Benefit is paid at the diagnose of a covered critical condition | 1. Benefit is paid when you are unable to work due to injury or illness | |
| 2. Tax–free lump sum benefit | 2. Monthly Income replacement benefit | |
| 3. One-time payment | 3. Regular monthly payments | |
| 4. Coverage for life is available in some policies | 4. Coverage usually ends at age 65 | |
| 5. Payout usually after 30 days waiting period | 5. It varies depending upon your coverage | |
| 6. Critical Illness insurance is stackable | 6. Disability insurance is not as benefits are integrated | |
| 7. Only pre-specified life threatening critical illnesses are covered | 7. Any illness or injury that leads to loss of income are covered | |
| 8. Available to anyone willing to get a coverage | 8. Available to Only Employed people | |
What to Look For When Getting Critical Illness Insurance?
1. Amount of Coverage: The amount of coverage depends on your needs, wants and your budget. The higher the coverage amount you would like to get, the higher will be the monthly premiums. Ask your insurance broker to find out and suggest the best benefit option for you as per your need.
2. Covered Conditions: Make sure you know what conditions are covered under the plan and what exclusions are there if any? Many Critical Illness policies carry exclusions for past medical conditions. Coverage of the conditions may vary among various providers but most of the policies provide protection for up to 25 conditions.
3. Type of Plan: Check the type of plan; whether it is a Non-cancellable plan or Guaranteed Renewable plan. A Non-cancellable plan is the most desirable option as it cannot be cancelled by the insurance provider and offer guaranteed premiums for the life of the policy.
4. Type of Coverage and duration: Make sure that you know what type of plan you have and for how long it will cover you? Typically there are Term 10, Term 20, and Term to age 65 or Term 100 plans. If you pick a 10 year plan your coverage will either end or renew at the end of 10 years and premiums will increase as per your contract.
5. Survival Period: There is a survival period of usually 30 days, after your diagnosis before the money will be released. Most insurance companies have a 30 day survival period for all conditions but some companies are now permitting a zero day survival period for some conditions.
6. Return of Premiums Options: There are policies that provide you with 100% of the premiums that you paid back if you never make a claim or if there is a sudden death due to any other cause at an added cost.
7. Limitations or Exclusions: Always review the limitations or exclusions that may prevent you from receiving benefits in future.
Critical Illness Insurance policies are designed to provide you with financial support when you need it most. There is a wide range of policy types and coverage amounts available to choose from the top insurance providers. The terms and conditions will vary from company to company as not all critical illness policies are the same, it is important to seek out professional advice and guidance in choosing your policy. We at Family Care Insurance can compare pricing from multiple companies to ensure that you are getting the right product at the lowest possible price. Be prepared for the unexpected-Let’s sit together to discuss your critical Illness insurance needs today.
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