When it comes to purchasing life insurance, there are many different
things you have to consider. The price of the policy, what it covers,
and the type of coverage are all very important factors. Another factor
is critical illness insurance. This is
often an extra feature of some insurances that is
optional, but is it a good option? That’s the question. There are some
obvious benefits to adding critical illness insurance to your policy,
but there are also some reasons you may want to pass on it. Either way,
you should make certain that you are completely informed about the
insurance before making a decision.
Basically, critical illness insurance is a policy that comes into play
if you come down with a life-threatening illness. What constitutes a
life-threatening illness is defined by the policy and is different for
each insurance company. Some have a very short list of illnesses, while
others cover up to 30 diseases or more. When you become unable to work
due to one of these illnesses, the policy will pay out. Some of these
policies pay over a period of time, but many of them pay out a one-time
lump sum that is generally tax-free. You are free to use this lump sum
to pay for medical procedures not covered by your medical insurance and
to handle bills and financial obligations such as your house payment,
utilities, etc.
The most obvious benefit is that you get an immediate payout. This
means you won’t have to worry about meeting your monthly financial
obligations. You may even be able to use the sum to pay off your
mortgage or vehicle, thus removing a potential financial obligation from
your surviving family members in the event of your death. Your family
will also have the finances to handle your funeral arrangements and the
various expenses that come with death, something that can put a major
financial strain on people.
On the downside, there is the fact that critical illness insurance is an
additional cost. If you already have high month-to-month living
expenses, it may be difficult to add another type of coverage to your
insurance. It’s also possible that your premiums will increase at some
point, especially if you start smoking or if you are determined to be
overweight. If you’re already in poor health, in fact, you may not be
able to get critical illness insurance at all.
Another factor is that those who have a pre-existing medical condition
may have that condition specifically excluded from their critical
illness policy. Others may have conditions excluded based on the fact
that close family members suffer from that condition or the fact that
their family has a medical history of the disease. Some critical
illness insurance policies have also started excluding certain diseases
like basic cases of prostate cancer or some types of skin cancers. This
is why it is very important to read every condition and exclusion in
the policy before you pay for it. While critical illness insurance can
be a life-saver in some situations, in others, it is simply another
financial commitment that may not actually help you that much.
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