Critical Illness Insurance

All about Critical Illness Insurance

Critical illness conditions have left many American citizens in bad shape financially, with most of them being forced to file for chapter 13 bankruptcy. Most of these people still had their regular health insurance coverage. The point is, a typical health insurance coverage is not enough in the face of critical illness. Critical health insurance is designed to help the families to people suffering from a critical condition cope financially until they regain their full health. If there is a chance for your loved ones to meet the cost of house bills or to pay the mortgage in case a critical condition prevent you from making a living, this type of coverage is for you.

How Does Critical Illness Insurance Work?

In the event that an insured person is diagnosed with a covered medical condition during the term of the policy, the critical health insurance plan will pay a tax-free settlement amount which the individual can use in whichever way they deem fit. This type of insurance can be purchased individually via private health insurance plans or provided by an employer as an employment perk. Conditions mostly covered under critical health conditions include, but are not limited to cancer, heart attack, and stroke.

What Are The Different Coverage Types In Critical Illness Insurance?

There are two major different forms of critical illness coverage. These are:

• Fully Underwritten Individual Plan

This type of critical illness coverage provides high payouts amounting to up to $500,000. These plans can be purchased from an insurance company directly or via a broker. To purchase this kind coverage, individuals are required to submit medical records.

• Simplified Issue Individual Protection Plan

This type of critical health coverage plan is more affordable but it also provides a smaller payout amount. The maximum amount one can get from this type of coverage is $50,000. Generally, the insurer will only ask you a few health related questions when purchasing the policy. No need to submit medical records.

Benefits of Purchasing a Critical Health Insurance Policy

This type of insurance hands you a lifeline in the face of tough financial conditions brought by critical illness. On top of that, the amount you get is tax-free. Some policies will also provide coverage for your children at no additional cost, but the pay-out amount is limited.