Critical Illnes life cover plans compared Have you taken care of the worst case scenario?

posted 14 Aug 2009 critical illness insurance

How are Critical & Terminal Illness defined?

Critical Illness life insurance policy pays out a lump cash sum to the beneficiary on diagnosis of a critical or terminal disease. The diagnosed disease must be permanent and incurable in nature for the policy to be effected.

If according to the terms of your policy assured payment of the cash sum differs for the critical illness life cover and the death cover, than there is required period of 28 days (14 days in some other life insurance policies) survival period, which needs to pass before lump cash sum will be paid.

Critical illness cover is not usually sold as a stand alone cover, but it is packaged with general life cover that will pay the assured sum to the beneficiaries in case of your death. Here some life insurance policies differ, since they can both be linked to either fixed term or decreasing mortgage protection cover.

If you are a single person, without any beneficiaries to whom you might want to transfer the benefit, than a life cover would not make much sense and it might make more sense to go only for the critical illness life assurance. On the contrary, if you have some dependents like a partner or kids, that you would like to take care of in the case of your death, than the life insurance policy which combines critical illness with life cover might be the right answer.

It must be said, that in the case of joint cover, a typical life insurance cover doesn't pay twice, but only once, on the first death of the either joint partner.

One special case is Terminal illness. If you rise or your beneficiaries rise a claim for a terminal disease, than insurer will ask you to provide a medical certificate. You will be responsible for bearing the costs of this certificate, but insurer will pay those costs back to you in the case they accept your claim.

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