- Health Insurance

Critical Illness Insurance

The unfortunate flip side of our increasing life expectancy is the greater likelihood of experiencing a critical illness, serious injury or major surgery during our lifetime.

Critical illness insurance covers a variety of serious medical conditions including: cancer, heart attack and bypass surgery, stroke, severe burns, kidney or other organ failure, multiple sclerosis, Alzheimer’s, paralysis and coma.

A critical illness policy pays a lump sum and you can choose how to use this, whether to pay your mortgage, credit card debt or other bills, rehabilitation or long term health care costs, pay for your children’s school costs or keep your business afloat while you are incapacitated.

Life insurance protects your dependants if you die and disability insurance covers you if you are employed and become disabled, but critical illness insurance fills a void between these two types of insurance. For a critical illness policy you do not need to be employed or disabled. You may experience a complete recovery, but you will still receive the payout to help with rehabilitation, health care or other costs.

Critical illness insurance is typically available through group and employer paid plans, although a few companies offer it for individual plans.

You cannot buy critical illness insurance for a pre-existing medical condition, and if you have a family history of a serious disease or are overweight or HIV positive you may also be ineligible. Some insurance companies will cover smokers, but charge them higher premiums. Most critical illness policies include a 30 day wait period before you can receive the payout. If you show no signs of the illness at the end of that period, or if you die within the first 30 days of the medical event, then your policy will not pay out. Once you have had a critical illness and your policy has paid out, it will then terminate and any future critical illness policy you take out may exclude that condition from coverage. Insurance companies consider a number of factors, including your gender, age, family medical history and whether you are a smoker, when determining your premiums. Most insurance companies have age limits for the purchase of a critical illness policy, or reduced benefits after a certain age.

When considering critical illness insurance you should compare the coverage and premiums, exclusions and limitations of different policies to make sure that you choose one that fits your needs and medical history.