Critical Illness Cover – What You Need To Know

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If you think inflation is the only thing that keeps rising every year to increase our limitations then you are wrong because health-care costs have risen even higher. Thus, many of us are unable to cope up with our medical bills and resultantly lead to chronic illnesses which require larger covers.

If you are diagnosed with any of the risky and life-threatening diseases then critical illness insurance comes on the scene by paying out a tax-free lump sum to cover your health-care cost.

According to a research by Canada Life Group Insurance,

“Its survey of 1,010 UK full-time and part-time employees also found that 72% of respondents would struggle to cope financially if their income dropped by £570 a month, the average loss of income experienced by 80% of families following a cancer diagnosis.”

Why Was the Critical Illness Insurance Created?

We all dream about living a life that includes health, security, and well-being. So, to make sure you are reaching your dreams you need to save and get a proper insurance plan. But life’s uncertainties often make us helpless for choices we never imagined we’d look up to.

The Association of British Insurers (ABI) found that in 2016 £4.7 billion was paid to British households which had some form of protection insurance policy (such as critical illness cover, life insurance, and income protection).

Especially in case of sudden illnesses, you might lose all your life’s savings.  Nobody can save for things uncalled for.  Losing all the income alongside recovering from the disease can be a very painful process. Critical illness was developed in the late 1990s.

Critical illness can benefit you by compensating the hardships and financial loss faced by an individual due to a critical health condition. And sometimes a person is bound to be a victim of disease due to hereditary causes.

What Does a Critical Illness Health-Care Plan Cover?

A critical illness insurance covers the following conditions to cater your family’s needs,

  • Cancer
  • Renal failure
  • Angioplasty
  • Coronary Bypass Surgery
  • Stroke
  • Major Organ Transplant
  • Paralysis

Most policies will cover even more critical illnesses than just these three mentioned above like multiple organ transplants and sclerosis.

How Will the Critical Illness Cover Cost?

Critical illness cover depends on several factors that include:

  • Age
  • Smoker
  • Your current health state and medical history or hereditary reasons
  • Occupation

Why Would I Need Critical Illness Cover Benefits?

A critical health condition can risk your life and is an unpredictable state in which financial state can be a life-threatening issue. That is why critical illness was created to provide you financial aid at the most crucial time.

Despite having a health insurance you may require medical treatments that your health care plan does not cover. While recovering you’ll still be responsible for the mortgage and utility bills. Some treatments might require you to travel if not available locally.

A study was performed prior to the recession period in 2008 by the Harvard University that tells that 6% of the bankruptcies in the United States took place due to medical problems. Cancer and heart attacks have become a common life-threatening ailment in every third American.  

The consequences brought upon by the financial devastation after a critical illness are something no one can be prepared for. Most of the health insurance policies do not cover full prescriptions and rather deduct a large sum every year. So, you need to be wary of the conditions stated. Many people find themselves under-insured and have to pay out-of-pocket costs.

How Much Coverage Will I Get?

It is fairly up to you on how much critical illness coverage you want to buy or can buy. This decision majorly depends upon your monthly mortgage. Non-smokers are estimated to pay $180-$200 per year as their critical illness cover whereas smokers will have to pay 50% more. It is also said that for smokers the deductible amount increases after the age of 50.

You can easily receive the illness insurance cover up to $50,000. This is an affordable processed amount for protection. As soon as the individual is diagnosed with a condition that comes under the insurance policy he/she will receive a single amount ranging from $10,000 to $1 million.

In some policies, multiple payments can be applied for instance if you are being treated for cancer and you recover you will get a lump sum amount. But then after a few years, you have a heart attack then another sum of money will be issued. So make sure to ask your insurer about all such conditions.

If the policy you acquire is a little more comprehensive, then it will cover much more life-risking diseases that include permanent loss of sight and hearing ability, full body disability or a lost limb etc. If your health condition stops you from working then most of the health insurance companies will cover for your loss.

How Does the Critical Illness Plan Work to Aid You?

A critical illness cover plan works by paying a lump sum amount that is equal to the total insured money at the time of any serious and risky illness that may hit you suddenly like a stroke, renal and heart malfunction and cancer.

The American Cancer Society lists that 38% of women and 42% of men (in the US at least) will develop some form of cancer in their lifetime, and a 19% and 23% chance of dying from cancer, respectively.   Singapore’s Ministry of Health lists “accident, poisoning & violence” causes about 40% more hospitalizations than cancer.

You can use this fund to pay the medical bills that include your treatment and healthcare facilities, rehabilitation. No matter how much the hospital charges are the insurer will pay the full sum that you are insured for. The financial aid and benefit policies are pre-defined and fixed.

My Ending Thoughts

The number of critical illnesses covered varies from insurer to insurer. Most insurers cover 10-20 major and life-threatening diseases that include cancer, open chest bypass surgery, heart attack, kidney failure, stroke, aorta valve replacement, organ transplant, paralysis etc. The coverage amount can go up to $50,000

Nicole Blackmore’s take on How to successfully claim for critical illness cover,

Research by Legal and General shows that the average UK household has enough in savings to survive financially for just 18 days before being totally reliant on state benefits, friends or family if the main breadwinner’s income is lost. It adds that almost two in five households have no savings at all, making them dependent on some form of assistance.

With the help of critical illness cover, you will be able to receive funds for your health-care needs as and when required so you do not have to resort to loaning or borrowing money from others or chop current savings and investments. Before buying any health insurance get yourself examined for the existence and chances of any hereditary disease, your age and the kind of job you are doing.


Critical Illness Cover – Myths & Stats

18% of staff have critical illness or income protection cover

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