Critical Illness Insurance Policies
Critical illness insurance provides coverage for various types of serious illnesses that, when treated, are apt to be ongoing and very expensive. It is generally purchased along with a health insurance policy.
1) What it is and how it relates to Workplace Benefits
Health insurance policies do not cover every illness, particularly those that are often more serious. Critical illness coverage is usually offered as an option by an employer. This helps retain good employees because it covers them and their families in the event of a critical illness.
2) Who it is for
This type of coverage is for anyone who can pay for it. Coverage for critical illnesses is selective, and no coverage will cover all critical illnesses. The buyer selects a plan covering several specific illnesses, or may want to be sure to get coverage for a specific one – such as cancer if there is a history of that illness in the family.
3) How it works
Once an official diagnosis has been made of a covered critical illness, the insurer will make the payment. Although benefits can be paid in more ways than one, the most common method is to pay it in a lump sum. The money can be used in any way deemed fit by the insured.
4) Different types of coverage in existence
Critical illness plans are usually offered as riders on a health insurance policy. They may be voluntary, which means the employee pays for the total cost. Two kinds of this type of insurance may be offered:
• Simplified Issue – these are lower cost plans that will provide payment up to $50,000. The insurer only asks a few health questions for this type of plan.
• Fully Underwritten Plans – these plans can provide coverage in amounts up to $500,000. The insurer will require more detailed health insurance information.
5) Major benefits
The primary benefit of this critical illness insurance is that it is paid to the insured, not to the medical providers. This enables the money to be used as the insured has need, which may include: medical bills, pay the regular bills and mortgage, child care, travel to and from medical care, get experimental care and more.
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