Illness in life doesn’t give you a warning before coming. It comes suddenly and puts your life in misery. It is always a wise decision to get insured. So when the problem occurs you must find yourself in a position to fight it rather than surrendering. Critical illness insurance is designed to help you out in these types of situations. It provides you the money when you need it the most. Thus, in this article we will see is critical insurance necessary?
During critical illness, you feel like a fish out of water. All of us have seen people in this type of situation. Whether it has happened to us or it has happened to our loved ones or somebody that we know. The effects of critical illness can be devastating. The medical expenses in these types of illnesses keep pilling up. If someone from the family is suffering from these types of illnesses, the other members get affected too. They have to take constant care of you. So their work-life gets disrupted. Apart from the medical expenses, there are other types of expenses like paying for the mortgage, paying for insurance, household needs, etc.
Working procedure of critical illness
Critical illness insurance covers one or more types of diseases that are mentioned in the policy. And if you are suffering from any of the types of diseases mentioned in the policy. Then the insurance company will pay you a lump sum of money that you are entitled to as per the policy. Critical illness policies typically cover these types of conditions although it can vary policy-wise. They are:
- Heart attacks
- Bypass surgery
- Organ transplant
- Benign brain tumor
- Loss of limbs
- Motor neuron disease
These types of illnesses require medical care and treatment for a longer period of time. This can quickly outstrip medical insurance. So if there is no critical illness policy attached to the health insurance eventually you have to pay for it from your pocket which will be a burden at that time.
Benefits of critical illness policy
#1: Income Substitution:
When you get affected by some critical illness it not only takes a toll on your health but also causes financial problems. A critical illness policy pays you a lump sum of money that can be used both for medical expenses and household expenses.
#2: Tax-free Money:
The lump-sum money that you acquire from the critical illness policy is totally tax-free.
#3: Makes life little easy:
As this policy provides you enough money for your medical and household expenses, you can relax and concentrate on your medical treatment. Rather than worrying and looking for funds to meet the expenses.
#4: It is irrespective of the place of treatment:
It gives you money irrespective of the fact that the treatment is done within the county or not.
Is this policy costly?
The main factor that makes these types of policy attractive is that their premiums are generally on the lower side. Smaller plans with limited coverage cost very low. The size of the premium increases if you try to include more illness in the plan. So if you select policy according to your needs the cost of premium won’t go high.
Disadvantages of critical illness policy
Like everything in this universe, even this policy has its pros and cons. We have seen the pros above. Let’s see the cons now:
- Similar to the other insurance plans this type of plan also has a series of conditions. They will only cover it under the specific condition mentioned in the policy
- Diagnosis won’t generate the payment if the condition is not life-threatening.
- A diagnosis of a stroke won’t generate any money if the neurological damage is not continued for 30 days.
- The policyholder must be ill and he must survive after the diagnosis otherwise the payment won’t happen.
- It pays you only one time. So if you have another heart stroke it won’t be covered by the policy.
- This type of policy does not provide guaranteed payments.
- There is an age reduction schedule in this type of policy. As you grow older your insurance payout decreases.
Are there any alternatives?
Although Critical illness gives you good benefits there are some other insurance products that will give you similar kinds of benefits without any restrictions. Disability Insurance is one of them. It provides you income when you no longer can work due to some illness. The financial protection is also not limited in the case of illness.
Is Critical Insurance necessary?
Yes, definitely critical insurance is necessary. Because, if you don’t get any critical illness you are lucky. But in case of any critical illness such as heart attack or cancer, this type of policy will protect you from financial disaster. You can think that your normal health insurance will cover all your expenses but in case of critical disease, your normal health plan won’t be able to meet all your expenses. So this type of policy should be taken into consideration while you are buying a health insurance policy.
Medical expenses are a common factor in the bankruptcy of a family in the United States. So protecting you and your family from such a disaster should be taken into consideration. If your family has a medical history of critical illness then it is necessary that you apply for this policy. The lump-sum amount that you will get after the illness, it’s totally up to you how you spend the money. Though in this type of policy there are some conditions, it is so in every insurance policy. Critical illness policy can become useful for you when you become too sick to work. It will help you to cover your medical and household expenses.
So to sum up the discussion it is advised to shop for the best policy that meets your needs. Many Insurance companies in the USA are providing critical illness insurance, like, United Health, Chubb, etc. It is always good to consult with a financial advisor before taking any insurance policy. If you like this article please share it with your friends. If you have any further queries, please feel free to comment in our comment box below. We will definitely clear your doubts.