When you ask for a life insurance quote, remember to also ask about critical illness cover. Critical illness cover is usually available at a very low cost or sometimes no extra cost at all. This cover is usually available only along with a relevant insurance cover.
Critical Illness Cover
So what exactly is a critical illness cover? This cover, over and above your life insurance, will pay out a lump sum of money to you if, within a certain time period, you are diagnosed with a critical illness. Critical illness cover should not be confused with private medical cover, which is insurance used to pay people in the private sector. Critical insurance cover is also different from income protection cover, which pays you a monthly sum of money after you have been unable to work for a particular period of time, usually six months.
While getting your life insurance quote, do remember to ask about critical illness cover. Remember that the illnesses covered will probably differ from one policy to another. If you are diagnosed with a critical illness like cancer, coronary artery bypass surgery, kidney failure, heart disease or more, your payout under the policy will be tax free. Although the illnesses covered are different in each scheme, critical illness cover always includes cancer, stroke and heart attack.
Benefits of Critical Illness Cover
The benefit of taking out an insurance policy with a critical illness cover is that as soon as the policy holder survives a minimum time period (usually of 28 days) after being diagnosed with a critical illness, he is paid a tax free lump sum amount of money. This money can be used to clear loans or mortgages or as a substitute to income being lost due to the illness. The tax free amount does not have to be returned even if you recover from your illness.
Taking out a Critical Illness Cover
You can take out a cover in two ways- on its own merit or linked to a term assurance policy. If the cover is linked then the specified amount will be paid either on diagnosis of the illness or on death- whichever occurs first. While taking out a critical illness cover, however, remember to honestly answer all details about your health. Your insurance will stand cancelled if it comes to light later on that at the time of signing the policy you had withheld information about a critical illness that you were already suffering from.
So who is a critical illness cover best suited for? There are a number of people who could benefit from it, and of these number include-
– Spouses of high wage earners- the high wage earner could typically be a doctor or an engineer. The idea is that if a spouse has to stay at home to take care of an ill partner, the income of the family will suffer. With the amount paid by a critical illness cover, however, the family can afford to hire a nurse or other service providers.
– Other high wage earners or self employed people who have capped out their DI limit.
– People in high risk jobs do not usually qualify for disability insurance. They might, however, qualify for a critical illness cover. This kind of cover could be especially beneficial for long haul truck drivers, fire fighters, police officers etc.
– Anyone who is concerned about an income that may be inadequate in the face of a critical illness.
Since, there are plenty of insurance providers in the market, look for a policy that suits your needs best.