Critical Illness Insurance

Critical Illness Insurance: What is it and who needs it?

This insurance plan offers the insured person a large sum of money in case of any eventuality that the person is being diagnosed with any critical illness. This illness can make the person stay away from work for a longer period. The money attached to this insurance plan is very high to cover for all the sickness expenses, and when the person has recovered fully. Some fortunate people are not going to makes use of this type of insurance plan throughout their lives. 

Furthermore, due to ignorance from the part of some people, they feel it is not necessary to enroll for it. Later on, they have to regret based on the kind of high expenses they have to pay, as a result of not having critical illness insurance. The money given to the insured person or insurance policyholder is for consolation due to their illness state. Different payment structures are well mapped-out to pay for the policyholder’s medication, treatments, and other things that will make him or her recuperate on time.

What is Critical Illness Insurance?

This is an insurance plan that has been provided with a lump of money to serve as a relief for someone who is having a critical illness to fund their medical expenses, while the person recovers from his or her illness. This financial compensation goes a long way in the treatment of the individual during this helpless state (critical illness). This sum can be claimed by the policyholder who is involved, and the family doesn’t have to bother looking for finance for medical expenses.

Types of Critical Illness Insurance

There are three different types of critical illness insurance plan:

  • Simplified issue individual 
  • Fully underwritten individual
  • Policy rider

1 .Simplified Issue Individual:

Simplified issue individual is a critical illness insurance coverage for insured people that is available in a sum that amounts to $50, 000. The conditions of this policy are not outrageous, because only a few basic health questions are to be answered. Most homes can buy this insurance plan on their own.

2. Fully Underwritten Individual:

Anyone can purchase this insurance plan for up to $500, 000. As a result of the large amount of money involved in this, the insurance company will need to ask the beneficiary detailed questions as regards to their medical history.

3. Policy Rider:

Some life insurance policy does provide this critical illness insurance plan through change, to generate endorsement that comes with numerous options to the insured person to add other insurance coverage.

How Does Critical Illness Insurance Work?

There are different critical illnesses which are included in this type of insurance plan. It is not all illnesses that are seen as being critical. Critical illnesses have a high payout to the person involved in it. This is the reason proper diagnoses are being carried out to check the level of the individual’s illness.

Other policies have placed to measure these illnesses. For anyone who has been diagnosed with any illness will be given a large sum of money that will be able to take care of the medical treatments, recuperating centres, transportation, and other related medical expenditures of the patients.

Benefits of Critical Illness Insurance

When an individual obtains this critical illness insurance plan through their employer’s assistance, some benefits come with it. Therefore, this money is being used to serve different purposes:

  • For payment of critical medical health services which are not included in the plan.
  • For payment of medical treatments that are not within the traditional insurance policy.
  • For payment of transportation, expenses to get to and fro to health centres.
  • For payment of recuperating centres for terminally ill patients who are under recovering.

Criteria or Conditions for Critical Illness Insurance

There are criteria or conditions which must be met for one to benefit from this insurance plan, and they are:

  • Anyone who wants it should be below 18 years, and at least 67 years old.
  • The term for this insurance policy is between 3 to 15 years.
  • The payment of monthly premiums must come in three different ways; monthly, quarterly, and yearly.
  • All applicants are to fill in the medical questionnaire and medical tests appropriately.

Factors Affecting the Cost of Critical Illness Insurance

The following are factors that lead to the increase or decrease prices for having critical illness insurance:

  • Age
  • Sex
  • Health
  • Job
  • Lifestyle

1 .Age

This is one of the decisive factors for an insurance plan because it does affect the cost of having it. For the aged people who have enrolled in this insurance, they tend to pay more due to how prone they become a critical illness.

2. Sex

Gender is another thing to look out in this insurance plan. The insurance firm or insurer charges more when it comes to issuing out this insurance plan to the male gender because they do make more claims when compared to the opposite gender (female).

3. Health

Health plays a vital role in influencing the price one has to pay for a critical illness insurance plan. People who are in a good state of health do pay a lesser fee in obtaining this plan, while those with extreme health conditions will pay higher.

4. Job

The risk in various jobs varies from one of the other. There are some kinds of jobs that are less challenging and demanding for the workers. This type of person fee will be lesser compared to those whose jobs are risky enough to terminate their lives.

5. Lifestyle

People engage in some lifestyles than affect them in various ways, such as mentally, emotionally, socially, and physically. For instance, people who take drugs, alcohol, and smoke addicts will pay more because they are vulnerable to various health problems.

Various Diseases Covered by Critical Illness Insurance

The following illnesses are covered by this insurance plan:

  • Cancer
  • Heart transplant
  • Kidney failure
  • Stroke
  • Hypertension
  • Coronary bypass
  • Paralysis
  • Multiple Sclerosis etc.


A person with critical illness required maximum funds to be safe. The right way to get things sorted out is to purchase a critical illness insurance plan to cut down the cost of running bankrupt. This makes it needless for the individual to bother himself or herself in search of money to pay the medical bills.  

Author: Brandon

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