What Is Critical Illness Insurance?

When considering an event that can personally and financially ruin a perfectly planned life, bad health is at the top of the list. After all, even the wealthiest people in the world would give away the millions and billions of dollars, yen, euro or other currency they have to regain their health. Although we have not found a cure for death and all sickness yet, we do have an option that can make these events less stressful. Particularity for those of us who do not have a ton of money stashed away. That option is Critical illness Insurance!
Critical illness insurance is a type of medical insurance that pays an insured a lump sum amount ($10,000 to $500,000) when he or she is diagnosed with a critical illness. It may be a serious illness or a disabling injury. The lump sum amount can be payable to the insured or the owner of the policy. The insured and his family have the freedom to decide on the type of treatment needed the insured to recover from his or her illness. Unlike traditional health insurance which may have restrictions on the type and amount of each treatment - conventional or alternative - Critical Illness payouts do not have these restrictions. The insurance proceeds can also be used for non-medical reasons without such as paying off a mortgage, living expenses, travel and entertainment, college education and more. Bottom line, this policy can provide relief to the insured and the family when it is needed most - at the time of a critical illness (unlike life insurance). It will also help the family to spend time with the patient and to focus attention on his recovery as the cash necessary for the treatment will be available.
What can be covered under critical illness insurance?
The type of diseases covered by critical illness life insurance policies differs from company to company. The following diseases or conditions are usually covered:
  • Alzheimer's disease
  • Blindness
  • Cancer
  • Heart attack
  • Kidney failure
  • Loss of limbs
  • Multiple sclerosis
  • Organ transplants
  • Paralysis
  • Stroke
  • Quadriplegia
  • Deafness
  • And more
In some policies there may be provision to make payment on claims according to the degree of severity of the disease. Also payments may sometimes not be made for diseases which are easily curable. All details should be in your policy. It does not hurt to ask questions before you apply! Sample polices may be available for your review.
Can anyone apply for critical illness insurance?
Yes, but when applying be prepared to answer questions and even take a free exam. Insurance companies usually issue critical illness life policies after conducting comprehensive medical tests. The individual's medical history and family health records are also checked and an insurance company may not be approved a person who has already been diagnosed with certain diseases. Every case is considered on its own merit. A qualified agent should be able to help you with the decision. Also, most policies do not accept individuals past the age of 65. Unlike disability insurance the type of work that you do is not much of a consideration.
My life insurance already covers critical illnesses
It is possible that your life insurance policy offers some form of critical illness insurance. In other words, if you are diagnosed with a critical illness your life insurance policy may allow you to have an early payout on some of your death benefit. These critical illness riders in life insurance policies are much more restrictive than stand alone critical illness policies though.
Is it expensive?
Put simply, the younger you are and the healthier you are, the cheaper the policy. The amount of coverage that you need will also dictate the cost. Although the policy may be renewable for life, rates may not be guaranteed for life. A nice perk to these policies is the return of premium rider. With this rider, no matter how much you have spent on the policy, should you die while the policy is in force, your beneficiary will receive a full refund of all premiums paid.
Is it the same as disability Insurance?
No. Disability insurance, also known as "income replacement" insurance, provides a monthly income replacement benefit if you become disabled and can no longer perform the normal duties of your work. Generally, the benefit is limited to a percentage of your regular income and ceases once you earn an income or you no longer meet the definition of disability in the contract.
Unlike critical illness insurance which provides the full policy benefit in a lump sum payment on diagnosis of an illness, long-term disability policies may have a waiting period from the onset of disability. Unlike critical illness benefits, long-term disability benefits may be affected by other income you receive or by your full recovery from the illness.
We hope this article has given you a good introduction to critical illness insurance. As we say in all of our articles, always ask as many questions as you need to. Be well.
Philippe Deray - About the Author:
Philippe Deray is President and CEO of MCD Financial Services and MCD Life. Our web site address is http://www.mcdlife.com/sl/ci.html
Our Focus Critical Illness Insurance
With many years of experience in the insurance business, we have developed proprietary methods to help individuals, get affordable insurance. We offer critical illness insurance plans for healthy individuals as well as individual with not so perfect health. We will make this process as simple as possible and get you an answer as fast as possible.
Company Profile
MCD Life is a successful, dynamic company built on the principal of serving our customers FIRST! Our primary mission is to bring peace of mind to our clients by offering innovative, value-added products and information that place emphasis on short and long term benefits, benefits backed by selected companies with high quality assets and written guarantees.

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