Finance Choices
Critical Illness Insurance Is Critical
A difficult time in life can teach you what's really important. Just ask anyone whose life took a sharp turn when a medical problem was discovered.
First off there are expenses, a difficulty for any family but which are a special challenge for any family who are covered by a limited medical insurance policy or have no insurance at all.
If you have limited medical insurance, there is sometimes just not enough to pay the bills. You could have costs of staying near a clinic while hoping and praying that you will get well.
Some people have family members and friends who have started get well funds to help pay expsenses. But all of this doesn't answer why there was no critical illness insurance.
This Is Why Critical Illness Insurance Is Important
Critical illness insurance is important as what you are doing is insuring your income, just like you insure your house. You wouldn't own a house without insurance, so why do you walk around without insurance against a personal catastrophe? You'll never know anything about expenses until you confront expenses caused by a major illness! From no income coming in to all the savings going out, families can be left in a great bind. Now that you've bothered to read this article, call your life insurance broker who sells critical illness insurance and get to know the difficulties you may face. And more positively, how you can solve them.
First off there are expenses, a difficulty for any family but which are a special challenge for any family who are covered by a limited medical insurance policy or have no insurance at all.
If you have limited medical insurance, there is sometimes just not enough to pay the bills. You could have costs of staying near a clinic while hoping and praying that you will get well.
Some people have family members and friends who have started get well funds to help pay expsenses. But all of this doesn't answer why there was no critical illness insurance.
This Is Why Critical Illness Insurance Is Important
Critical illness insurance is important as what you are doing is insuring your income, just like you insure your house. You wouldn't own a house without insurance, so why do you walk around without insurance against a personal catastrophe? You'll never know anything about expenses until you confront expenses caused by a major illness! From no income coming in to all the savings going out, families can be left in a great bind. Now that you've bothered to read this article, call your life insurance broker who sells critical illness insurance and get to know the difficulties you may face. And more positively, how you can solve them.
posted by Bruce Wayne at 8:32 AM
Critical Illness Insurance Is Critical
5 Comments:
I am 30 and my wife is 25, we have just bought a home and are wondering if it is better for us to get disability or critical illness insurance?
They are 2 different products.
Disability insurance is intended to replace your earned income if you become hurt and/or sick. there is a qualifying period before you receive benefits. ( often if you're willing to pay a higher premium the qualifying period can be shorter). Most policies will pay a "percentage" of your proven lost earnings. Ideally you would like to get close to your net income for a benefit. If you pay the premiums in after tax dollars, then the benefit should be tax free. To complicate things further, there are various definitions of disability. Can the policy holder return to work at his "substantive job" or just return to work at "any job". look also at how long the policy will pay benefits. Is the insurance Company willing to be only the "second Payor" in a claim? ( Second payor will only top up the amount of benefit you receive after another insurer has paid a claim. An example would be if you were already covered by EI or had a group plan through work, that paid you a benefit. A personally owned second payor policy may only top up from that amount up to your net pay. Obviously the longer the coverage period the better. in an effort to reduce claims some companies offer to assist with therapy, etc. to help get the insured individual back to work. Many nasty fights can occur between insurance companies and policy holders over what qualifies as a disability, what is acceptable employment if you cannot return to your own occupation, and when you are able to return to work.
I don't even want to get into all the other nuances like occupation classes, non cancellable clause, guaranteed renewable, etc. This is one product that I would avoid comparison shopping by price only! If you are unfamiliar with disability insurance, you will definitely want to talk to a professional. ( usually NOT A BANK EMPLOYEE)
Now some info on Critical illness
It might be easiest to think of critical illness as working similiar to life insurance. with life insurance if an event happens (death) a lump sum, tax free death benefit is paid to the beneficiaries.
With critical illness insurance, when one of the defined events occur (ex: heart attack) the beneficiary receives the coverage amount in a lump sum, and just like life insurance, can spend the funds in any fashion they choose. Often there is a survival clause before the policy pays out. ( ex: you must live for 30 days after the event)
Now your question was which is better?
As you can see they are 2 very different beasts. There would be nothing wrong with having both in your risk management plan. ex: if you had a heart attack and were off work, you could collect on a Critical illness policy and collect disability insurance
sometimes it just comes down to a persons personal wants and needs. If you are not certain what you need, Make a list of all the questions you have and what's important to you. Be prepared to discuss your personal situation. Talking with a professional will often eliminate most of the "clutter" and help you find what you're looking for.
Good luck
Hi
I am searching for a Standalone (i.e. not linked to a life insurance policy) Critical Illness insurance - preferably decreasing term to cover a mortgage....
Doesnt seem to be too many people doing standalone policies- can anyone provide any pointers... so far I've tried:
Egg
Tesco
First Direct
Norwich Union - They did provide it
Legal and General
Morethan
Can anyone help me?
Just as many companies that do life assurance also do standalone critical illness. The problem is that you are no looking in the right place. You are looking at the companies that cherry pick the easy business and not the more complicated.
With critical illness cover, you have guaranteed and reviewable premiums. You also have comprehensive, budget/core conditions only and a varying number of conditions covered depending on the company. The increased number of options and the increased underwriting costs mean that some of these companies are not interested in them for the level of business they would likely get.
It's always worth comparing the cost of a Death or Earlier Critical Illness policy even if you have enough life cover already.
Mainly because in order to claim on Critical Illness you have to survive the 'survival period' of either 14 or 28 days (depending on the insurer). Therefore, if you suffered a heart attack and were on of the aprox 30% who die immediately or on the way to hospital - the policy will not pay out.
Apart from that, the cost of linking a CIC policy to life is usually minimal, infact believe it or not in some cases its even cheaper than a stand alone CIC policy! Don't ask why, its much to boring to explain.
Anyway hope that helps in some way but do take careful note of Barbara's comments. It is very important to consider how comprehensive the cover is, after all the most expensive policy is the one that doesnt pay out - no matter how cheap it is! Case in point; Egg cover 8 Critical Illness Conditions in there policy (plus TPD) most major insurers cover between 25 and 33. So as with so much in life, the key is VALUE not just cost.
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