Critical Illness Insurance is a separate policy to Major Medical Health Insurance and provides lump sum cash payments to the policyholder if they suffer a Critical Illness.
Most plans will cover the 3 main Critical Illnesses – Heart Attack, Cancer & Strokes, and each company will offer some additional coverage beyond this.
Cancer plans are a sub-category of Critical Illness policies.
The policyholder receives a lump sum check from the insurance company if they are diagnosed or treated for any of these covered conditions, and typically we see clients choose coverage benefits in the $10,000 – $50,000 range.
The money can be spent in any way the client chooses – it could be to cover the Deductible and Out of Pocket Maximum of their health insurance plan.
Some people use the cash benefits for travel and accommodation costs that come from receiving treatment from a specialist hospital – MD Anderson or Mayo Clinic for example.
Or it could be used to cover day to day bills and living expenses or business expenses if they are required to miss work to recover and convalesce. The cash benefit can cover this lost income.
This is a great policy for those who are self-employed and those who do not have Short Term or Long Term Disability Insurance benefits through their employer.
In addition, the monthly premiums are generally low for Critical Illness policies.
Some companies offer a combined Critical Illness & Accident plan as a package policy.