What is critical illness insurance?

Most people know that health insurance covers healthcare costs and that life insurance protects your loved ones from taking on your debts after passing away. However, critical illness insurance is a less common form of insurance that many people haven’t heard of, but it can be essential to preserving the quality of life for you and your loved ones if you face and defeat a critical disease.

Medical technology is constantly advancing, leading to higher survival rates from diseases that were previously a death sentence. However, recovery from a debilitating illness can be lengthy and expensive; costs like rent and bills still need to be paid even though you may be unable to work. Because you are more likely than ever to survive one of these illnesses, it is important to protect yourself financially for any unforeseen costs. Critical illness insurance can ensure that getting back to normal isn’t weighed down with debt.

Why get critical illness insurance?

Most people don’t account for the fact that a debilitating illness can happen to anyone, including themselves. While you may have great healthcare coverage, it can take a long time to recover. You may not be able to work while receiving treatment. Your spouse or child may have to take time from work in order to take care of you.

Critical illness insurance, paid in a lump sum, can help you take care of costs beyond medical treatment. If you qualify, you can use this money for whatever you wish. It can be especially helpful for taking care of bills and giving both yourself and your caregiver peace of mind during your illness. It can keep you from falling into debt that would have to be dealt with after you have recovered from your illness. Some people have even used their money to travel to and pay for experimental treatments that they would not be able to pay for otherwise.

Getting this insurance can be a good idea if you are at risk for certain kinds of diseases and want to assure that you and your family are set up for success should you become ill. It is also recommended for peace of mind should the worst occur; a small monthly payment can save you from years of distress in the long run.

How does critical illness insurance work?

When you are faced with something qualified as a critical illness – such as cancer, stroke, or an organ transplant – healthcare is not the only coverage that you have to account for. These diseases often take an extreme financial toll on both the sufferer and their families within this time. When someone is dealing with a critical illness, they can’t work, and their spouse or family member often must lose wages in taking care of them. Critical illness insurance is intended to cover any additional expenses that may arise from your recovery.

Depending on your insurance policy, anywhere from $5000 to $10,000,000 can be covered. If you are to face a critical illness, your policy is paid out in a tax-free lump sum; this gives you the flexibility to cover the specific expenses that arise during your recovery. You aren’t required to prove what you spent the money on; if you qualify to receive coverage, you receive the money no questions asked.

Critical illness insurance is paid in a monthly premium, much like life insurance. The younger and healthier you are, the lower premium that you will have to pay each month. It is important to work with a trusted insurance advisor, like Venture First Advisory, so that you can get the best possible rates available for life insurance.

How does it work and what does it cover?

Receiving your tax-free payout from critical illness insurance isn’t as simple as proving that you have fallen ill. Most policies require you to have been healthily paying for premiums for at least 90 days leading up to your diagnosis. This means that, should you be uncovered, you can’t sign up for an insurance policy and receive the lump sum after being diagnosed.

Most critical illness insurance policies also require you to survive the illness for a certain amount of time, generally 30 days, before receiving your payout. This is because the insurance is intended to assist you and your family in recovering from illness and adjusting to your normal life again, not as a stand-in for a life insurance policy (Click here to learn when you should consider getting life insurance.)

To make matters more complicated, some policies only account for certain illnesses – such as cancer, heart attack, and stroke – to qualify for critical illness insurance. While there are a variety of maladies that can dramatically affect your livelihood, that doesn’t mean that critical illness insurance will affect them. Some policies get even more particular, only covering certain kinds of cancer.

Investing in critical illness insurance is a smart choice in order to protect yourself and your family should you fall critically ill. However, finding a policy with a price that works for you with coverage that you understand can be difficult. Book an appointment with Venture First Advisory today. We can help you find an insurance policy that meets your needs and helps give you and your family peace of mind.