Unless you have substantial net worth, even in the UK or Canada, catching a life-threatening illness, such as cancer, can be a very pricey matter. Most importantly, not only do you need to consider how contracting such a critical illness will affect your savings due to the extreme expense of any medical care costs, but you also want to consider that you may well not be able to bring in any income to cover you day-to-day expenditure. As a result, making sure you apply for a critical illness coverage policymay well be one of the smartest and astute financial decisions you make.
What Actually Is Critical Illness (CI) Insurance?
Briefly, a critical illness insurance policy is very much like any other insurance policy you purchase. In CI, however, your premiums go towards insuring that you do not catch a severe sickeness. In the event that you do contract a critical sickness, your insurance supplier will compensate you out a tax-free lump sum to help you cover the day-to-day costs of having to live with your newly found medical status.
Are There Any Limitations With CI Insurance?
It is crucial that you look at the list of critical illnesses that your insurance policy covers, as these will be the only illness under which the policy will pay you. Put differently, the policy provider will not pay you on the policy merely because you have a doctor's certificate that you have a severe illness, it needs to be one of the designated critical illness.
Moreover, if you are considered by the insurance provider to be a high risk - for instance, if you smoke - then it is probable that either you will not be able to take out the critical illness insurance, or your insurance premiums will be significantly higher than if this were not to the case. One important point is, you will need to disclose whether or not you have any existing medical conditions, in which case these will in all probability not be included, and whether or not your family has a history of the illnesses set out in the policy, in which case this will likely affect your premium payments.
How Will I Receive My Payment?
As mentioned, with a CI insurance your insurance supplier will write you out a cheque for a lump-sum tax free amount of money once you contract one of the illnesses set out in the policy. Having paid out the lump-sum amount, your relationship with the insurance company will come to an end. This means, you will not have an ongoing relationship with the insurance provider paying you funds. This is the case, unless you take out a "rider" when you apply for the oringial insruance policythat states you may have a second event of a sickness under the same policy. This is called a Second Event Rider.
Is It Worthwhile Having Critical Illness Insurance?
The question of whether or not there is any value in you having a critical illness insurance policy will depend for the most part on your age, disbursements, and whether or not you have any other insurance. Basically, critical illness insurance covers an area for which other forms of insurance can be obtained. However, unlike other types of insurance, this is a very particular insurance policy paying out for a very specific purpose. That being said, there is a strong argument that you can never really have too much insurance and with statistics seemingly showing that more and more people contracting severe illnesses as we grow older as a population, this type of insurance has its important place
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