Critical illness Life Insurance – Everything You Have Wanted To Know
Critical illness life insurance is not automatically included in an ordinary life insurance policy. Some people are under the impression that a life insurance policy will answer your medical bills in case of need. The closest policy wherein this is remotely possible is with a Variable Life Insurance. Since this policy allows the holder to withdraw a portion of their investment anytime, this can be used to answer for incurred critical illness bills. But it is not necessarily specified in the policy to be used as such. Simply put, a life insurance can be used by your beneficiaries when you pass away. On the other hand, a critical illness life insurance beneficiary is the policy holder – you.
Most of the time, policy holders do not think that this type of insurance is needed as they concentrate more on taking care of their families even when they are not there physically to do so. In truth, it is not a certainty that you will develop a critical illness but if you lead a carefree lifestyle, you might want to rethink your stand about this insurance. If you’ve been smoking for years or your family has a history of genetic illnesses, it helps to invest in your own protection. A critical illness life insurance will keep your family from incurring debts as you struggle to fund your medical treatment.
Getting diagnosed with a critical illness is one thing. Having to deal with the mounting financial needs is another. Imagine if your illness lets you survive only to be stuck in a wheelchair for the remainder of your life. You need to have your house renovated to accommodate your transport. You also have several maintenance medicines that are sure to cost a fortune. Your life insurance will not be able to cover that but a critical illness life insurance can.
There are two options to choose from when you decide to get this type of insurance. You can have it as a separate policy or you can add it as a special clause in your life insurance. Having it as a separate policy may be more expensive so most people get it as a combination of an existing life insurance – granted that the life insurance policy that you got allows modifications in the middle of the payments. It is easier if you haven’t finalized your life insurance yet.
You can add this clause or combine it with your preferred policy type. Applying may be tricky especially if you have a history of critical illness in your family. However, some insurers accept them anyway so keep searching until you find a licensed insurance company that can accommodate your condition.
So how does a critical illness life insurance work? It varies per insurance agency. Usually the definition of a critical illness is specified on the policy that you applied for. If your diagnosis is within the specified “critical illness category”, you get to qualify for your claim. You get the monetary amount that is due depending on what you indicated when you applied for the policy. It is yours even if you make a full recovery.
Critical illness life insurance policies have “survival periods” that refer to 28-30 days of waiting. The claim will not be released immediately in the event that the policy holder will die within 30 days of the diagnosis. If they do, then the claim will go to the beneficiary as a part of the life insurance and not the critical illness policy.