With enhancements in medicine and treatment, although more people are surviving critical illnesses today, it is not the same story when it comes to their personal finances. Surviving a critical illness (ie. cancer or hear attack) takes time away from you work and ability to earn an income. A well structured critical illness insurance plan can provide you with the resources your require in the event you become sick.
Critical illness insurance plans are an important part of the income protection mix. However, many assume that life insurance and disability insurance provides all the coverage you needed. Unlike disability insurance, critical illness insurance pay out a lump sum after 30 days of diagnosis. Having a lump-sum payment when sick in bed facing cancer, a heart attack, stroke or a wide variety of other conditions, depending on the contract, can help provide the security for your family and business in a tough situation.
Critical illness insurance is a living benefit plan, meaning, the policies provide you with funds after 30 days of diagnosis to help with recovery. Life insurance benefits someone else (your dependent), and disability insurance typically has a 90 day waiting period while only paying up to 67.7% of your income.
Here are a few points to consider that could reduce costs when looking to a policy:
• Consider smaller coverage amounts, there is no point in getting a policy that is not affordable for your budget and you will have to cancel.
• Tailor the policy to cover the 3 main conditions that account for over 80 percent of claims: heart attack, stroke and cancer
• Buy early, you aren’t getting any younger and the longer you wait the more expensive your premiums will be
• Be aware of “return-of-premium” contracts, these policies cost more because they refund some or all of a premium when the policy matures, if no claims have been made. Ask to see a contract without the “return of premium” rider so you can compare the cost.
Having a plan tailored for your individual situation is important, be sure you are working with an independent representative that has access to the numerous carriers and options that are on today’s market. Much like life insurance, pricing for critical illness insurance is based on your gender, age and medical history. A medical examination is often required.
Being aware that these policies exist, how they work and exploring options may be worth your time.