Understanding Critical Illness Insurance
Critical illness insurance is coverage that meets the expenses associated with having a critical illness, such as cancer or some other life-threatening disease. You may find that this insurance is a part of your job benefits. If not, then you will have to purchase your own policy if needed.
This type of insurance is meant for people who have the possibility of becoming inflicted with a critical illness. What qualifies as a critical illness depends on your policy. In most cases, covered illnesses include things such as Alzheimer’s, cancer, deafness, blindness, paralysis, sclerosis, and organ transplants.
How it Works
Critical illness insurance comes into play when the policyholder is stricken with disease. Once the individual is diagnosed with the illness, they become eligible for benefits. Some insurance companies require the policyholder to survive for 7 to 14 days before benefits will be paid. Once this period is met, benefits are paid to the policyholder.
Coverage and Usage
The sum paid by the insurance company can be spent in any way the policyholder desires. Although the money is to help pay for medical costs and healthcare, the policyholder can actually spend it on anything. Most people pay medical costs related to the illness, travel expenses as they relate to treatments, the costs involved with rehabilitation, and recuperation and the replacement of income.
Some insurance companies try to have more control over what policyholder’s do with the money. Instead of paying a lump sum of cash, some companies pay the money directly to the hospital or treatment center. This also makes things easier for the policyholder, and removes the need for them to deal with the insurance company or wait for payments.