Critical Illness

Is this death insurance? No, Critical Illness illness is actually a health insurance policy. How does it work? You purchase a set amount to be paid to you if you are diagnosed with a certain disease and live 30 days from the date of that diagnosis. You now have this money to use for whatever you want. The lump sum paid does not have to be used for medical expenses.

This would not be getting pneumonia or strep throat. A critical illness insurance policy pays for different types of cancer, heart attack, stroke, paralysis, Parkinson Disease, MS, blindness or other life-threatening illness as defined in that particular insurance policy wordings. Yes, different insurers will cover one type of illness or another.

Again we find that insurance does not have one specific answer for any one question. If you have a history of heart attacks killing family members then you will need to do some research. One company may not be willing to give you any coverage at all, some may wait for a certain period of time to have gone by without any follow-up incidents and some may just charge you more money. Some insurers will even give back part of your premiums paid if you go the full term, usually five years, without making a claim.

Critical illness insurance is becoming more commonly known. Some employers now include it in their group insurance packages for employees.

Sometimes you can buy this coverage with your business insurance and have the business pay the cost of the coverage. If you choose this option then be sure to declare a tax benefit for your future share. This way if you do collect on the policy it will be tax free. If you pay for this coverage personally then it is not taxable.

Talk to your insurance adviser as to what is available to you for your particular circumstances.