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Critical Illness Insurance

Critical illness insurance is also known as dread disease policy. This is an insurance product whereby the policyholder is entitled to payment by the cover provider if he/she contracts a particular disease. These diseases are highlighted in the insurance policy terms. The policyholder is required to survive for a particular period for the policy to mature. This time is called survival period and it varies from one company to another. Most companies use a survival period of 2 weeks. Most employers currently are insuring their employees with this cover. This employing company contracts an insurance firm to cover for their employees. Employers use this cover to protect their workers from financial constraints in case of sickness. Some employers also use the cover as a means of attracting people to work in their company.

Who requires this cover?
Critical insurance cover is mostly subsribed to by individuals suffering from terminal diseases. In most cases, the compensation is in not in terms of lump sum cash. The cover is instead used to pay for medical bills of the patient. The cover can also be used to pay for decreased income of the affected individual resulting from the inability to work due to sickness. The can also be used to pay for a mortgage in case the policyholder succumbs to the illness.

How does it work?
There are many different types of compensation. A policyholder can be paid a lump sum cash as highlighted in the cover terms. This payment can be made immediately upon diagnosis, and no other payment is made. Alternatively, the insurance provider pays the medical bills.

Covers available
The standard policy is where a policymaker is paid a pre-determined amount by the cover provider. In another form, the cover provider directly pays a healthcare provider money required for treatment of the policyholder. Mostly in this type of cover a policyholder is required to select a few hospitals where he/she wants to be treated in. An alternative cover pays for travel and accommodation expenses of the policyholder when he/she goes to another country for treatment.

Benefits of the cover
A policyholder receives some benefits upon subscription to this cover. They include
1. The policyholder is able to pay for treatment and care.
2. The policyholder can replace income lost during the convalescing period.
3. The policyholder can meet demands of the new lifestyle brought by sickness.

Exploring the Benefits of Critical Illness Insurance

Known also as “dread disease” coverage, critical illness insurance is a product offered by many insurance providers that give policyholders, in their time of need, compensation that covers him or her when stricken with certain diseases. (What diseases covered are specifically listed in the individual policy details.) The individual who opts for this important coverage must understand that he or she is mandated by the insurance companies to first survive for a certain period of time prior to being availed of the policy benefits. This is usually referred to as the “survival period” and each insurance policy will often have different amounts of time that one must first “survive” before getting the promised pay out. (Most insurance providers will mandate a 2-week period). Many employers offer this coverage as a perk to their employees. It is utilized to safeguard their workers from financial challenges in times of sickness. Often good critical illness insurance is provided as part of an overall benefits package that is engineered to attract good candidates to seek employment with the company.

Who Needs this Coverage?
Critical insurance coverage normally will benefit those who might contract and then suffer from a potentially terminal and, certainly, chronic disease. The pay out can be in the form of a lump sum of cash or it can be provided incrementally as needed to cover whatever is required for medical bills and other expenses for the patient. This can also include compensation for the lost income of the worker that results from his or her inability to work as a consequence of the illness suffered. Pay outs can also be utilized to help cover such expenses as mortgage or rent, should the policyholder be sickened due to a covered disease.

How it Functions
There are many different kinds of payouts offered by individual policies of this kind. For example, a policyholder can be provided a lump sum amount of cash to use as he or she sees fit, if it is part of the policy terms. This amount of cash can be delivered to the policyholder immediately upon diagnosis, (after the survival period has transpired) but then no further payment will be made. Instead, the policyholder can opt to have the insurance provider pay the medical expenses as they come due. Keep in mind that each policy can be different in its various terms.

Types of Coverage Available
The standard coverage is normally one that is where the individual covered is provided a pre-determined cash sum by the insurance company. Otherwise, the coverage provided comes in the form of payments to a healthcare provider for whatever needed treatments for the policyholder. In this case, a policyholder will be obligated to choose from a few hospitals with whom the insurance company has relationships. Coverage will sometimes also provide payment for travel and lodging costs of the policyholder when treatment is needed far away from the his or her residence.

Coverage Benefits
Benefits from Critical Illness Coverage include:
• Funds for treatment and care.
• Replacement of income lost during treatment and recovery.
• Payment for ancillary costs that cannot be met due to an inability to work.