By financen | October 7, 2011 - 10:20 am - Posted in Insurance

A critical illness insurance policy is an insurance product where a lump sum amount of money is provided to the policy holder under certain circumstances defined in the contract when he is diagnosed with a critical illness that is also clearly mentioned in the policy. In certain cases, the policy can be made in such a way so that the policy holder gets a regular monthly payment from the insurance company. The insurance coverage also includes certain surgical procedures.

Life insurance policies are offering critical illness riders which will pay anywhere from $5,000 to $100,000 upon first diagnosis of a critical illness. Some of these life insurance companies will pay you this benefit up to 3 times over the term of the life insurance policy.

It is usually less expensive to buy a critical illness rider on a life insurance term policy that if you purchase a critical illness stand alone policy. If you buy the rider, you also will get the added death benefit on a life policy in additional to a tax free benefit to your beneficiaries.

As per some insurance policies, the policy holder has to be alive for a certain number of years after the diagnosis of the illness before the insurance payment is made. This period is also called the survival period and usually ranges in between 28 to 30 days.

The critical illness insurance is also known as the crisis cash, living insurance or the serious illness insurance. Although different companies cover different different diseases in their insurance policies, but mainly they include serious diseases like coronary artery by-pass surgery, cancer, heart attack and stroke. Later, many other health conditions were added to this insurance coverage such as Alzheimer’s disease, kidney failure, major organ transplant, blindness, multiple sclerosis, deafness, Parkinson’s disease, paralysis of limbs, terminal illness, HIV or Aids contacted through blood transfusion etc.

The number of diseases or illnesses that are covered under this insurance policy and the insurance amount keeps on changing constantly depending upon the number of diagnosis being made and the treatment available for the disease. This means that coverage for diseases that seemed important years ago may not be that much in demand today and the illness that are covered today might not need that much insurance coverage tomorrow. Diseases like rheumatoid arthritis and diabetes are expected to get greater insurance coverage in the near future.

The critical illness insurance was earlier introduced to safeguard the financial conditions of people who are unfortunately struck by illness that were later deemed to be critical after treatment or diagnosis was made. The amount received from the insurance payment can be used for paying off the treatment bills and costs, used as aid for recuperation, repayment of debts, make up for lost income incurred due to inability to earn following the illness, or even to help the change the life style of a person once the illness diagnosis has been made.

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