Is Critical Illness Cover Important?
Steve is a family man, who has taken a family life cover and feels safe
that if anything happens to him, the insurer will pay them a the
hospitalization and treatment costs. However about 6 months later he is
diagnosed with cancer. Steve is unable to continue working a few months later
and although the life cover paid for his hospitalization costs, his loss of
income severely impacted on the standard of living of his family. Unfortunately
he did not consider taking a critical illness cover and for which his
life insurance cover did not pay for the loss in standard of living that his
family had to endure.
Although a life insurance policy is an overall safeguard and provides
cover for hospitalization and other costs of treatment, a critical illness
policy is a safeguard for the aftermath. If you are temporary or permanently
disabled, a critical illness cover will pay you a lump sum to offset the
loss in income and the resultant loss of standard of life.
A critical illness cover can be taken in two different ways.
Either as a separate stand alone policy or as a part of your health insurance
cover. When you take the same as a part of your health insurance cover the
overall premium amount that you pay is going to be higher than it would be
otherwise, but the gains completely overshoots the expense that you pay. As
detailed in the example above, had Steve taken a critical illness cover
for his health insurance policy, his family would have been much better off.
The increased costs at times such as this are negligible.
Critical illness cover mostly ensures coverage against
the following critical illnesses such as cancer, stroke, coronary bypass surgery,
heart attack, kidney failure, major organ failure or a resulting transplant
operation. By and large different insurers will have a different list of
critical illnesses that they cover, but the above are the major ones that most
do cover.
In as much as they are a great source of financial support in times of
need, critical illness cover will not cover all conditions. Specially,
conditions that were pre-existing at the time of birth for young children, HIV,
self-inflicted injuries, certain forms of non-invasive cancer, skin cancers and
so on. When taking a policy a detailed medical record is required and any
existing conditions will need to be reported. Honesty is the best policy in
this case as any unreported conditions can become a reason for your claim to be
refused.