Critical illness insurance pays a lump sum when the policyholder is stricken with a specific critical illness. Heart attack, cancer and stroke are the three major illnesses usually covered by this type of insurance. An employee can offer this insurance as part of a benefits package. An employee can purchase it separately as well. When offered as a job benefit, critical illness insurance can help employees avoid bankruptcy due to unpaid medical bills or allow them to seek experimental treatments.
Any person can get this kind of insurance, but they might not need it. No one knows when an illness of this sort might occur. And critical illnesses are not limited by age, race or income. However, some people are more likely to have certain illnesses. For example, if heart problems are a family trait, then a person is more likely to have a heart attack.
When the policyholder is diagnosed or stricken with a critical illness, they receive a tax-free lump sum payment for the policy amount to use as they wish. They can pay for treatments not covered by medical insurance or to pay household expenses.
The most common critical illness insurance policies cover cancer, stroke and heart attack, but other illnesses can be covered. Things such as organ transplants and kidney failure are two other circumstances that can be covered. A person can purchase a policy on their own, but it might also be presented as part of a work benefits package.
The benefit is that this insurance can help when other insurance falls short. Any critical illnesses can lead to massive bills and financial problems. Plus, if someone has a critical illness, they’re likely to miss time from work, if they can work at all. The money from critical illness insurance can make things much easier.