Critical Illness Insurance

Critical illness insurance is like conventional insurance policies in every respect. It differs only in the respect that premiums paid contribute to provide a protective cover against critical life threatening diseases. Here, you should keep in mind that your critical illness insurance provides cover for (some) specified illnesses that are explicitly mentioned in the contract. Just because you are diagnosed with a critical condition critical illness insurance company will automatically cover it. Like conventional insurance, critical illness insurance premiums depend upon your smoking/drinking patterns, your medical history, your family’s medical history and a number of other similar factors. These factors help the critical illness insurance company assess your health condition and decide the appropriate premiums. Most critical illness insurance companies provide a lump sum payment in case of diagnosis. This payment usually amounts to the maximum cover promised by the critical illness insurance company. After this payment, liability of the critical illness insurance company is covered and your claim is rested.

Most critical illness insurance companies cover seven types of critical illnesses. These can be classified as follows: cancer, stroke, kidney failure, main organ or body part transplant, sclerosis, heart attack and bypass surgery. This is because the probability of getting these critical illnesses is higher than other life threatening conditions. Some of the others conditions covered under critical illness insurance are aorta graft surgery, benign brain tumor, coma, blindness, deafness, loss of speech, loss of limbs, heart valve replacement or repair, motor neuron disease, paralysis/paraplegia, Parkinson’s disease, terminal illness, organ transplants, strokes, Alzheimer’s and third degree burns. Not all critical illness insurance companies cover all the above-mentioned conditions. Thus, make sure you have adequate cover in case you are identified with a serious illness.

Types Of Critical Illness Insurance Policies

Critical illness insurance policies can be classified into three main types viz.

• Death or Earlier Critical Illness Insurance - Death or earlier critical illness insurance is an insurance policy that on either critical illness or death but not both i.e. if the policyholder has made claims up to the value of the policy prior to his death he will not be entitled to a death benefit.
  
• Death and Critical Illness Insurance - Death and critical illness insurance is an insurance policy that pays on both serious illnesses and death. However, most critical illness insurance policies do not pay claims for a second critical illness if developed.
  
• Critical Illness Mortgage Insurance - Critical illness mortgage insurance is an insurance policy that fulfills your mortgage obligations in case you are unable to work (and have lost your income) after being diagnosed with a critical illness.

There are both advantages and disadvantages of critical illness insurance some of which are discussed below:

Advantages

• Critical illness insurance is useful for protecting you and your loved ones against adverse condition of inability to afford medical care.
  
• You can choose a health care provider of your choice who can provide you expert medical attention in a soothing environment.

Disadvantages

• As discussed above, not all the above-mentioned critical illnesses will be covered by all critical illness insurance policies. Thus it is for the policyholder to decide what cover he/she requires based on his/her family history and a number of other factors. Also compare costs and benefits of the critical illness insurance policy.
  
• Some critical illness insurance companies do not cover the policyholder(s) for pre existing conditions.
  
• Critical illness insurance policies are more expensive than other types of health insurance policies.