Critical illness insurance is a kind of insurance policy that is meant to cover the costs associated with treatment for certain serious illnesses as outlined in the policy. More often than not, critical illness insurance is not a stand alone policy, but is purchased in tandem with another policy, such as health insurance. In many cases, the insurance company is bound to provide a lump sum to the insured in case the latter is diagnosed with a critical illness.
Again, critical illnesses are outlined in the policy, and the list is dependent on the company providing the insurance. Some common illnesses that are included in the critical illness category include the various types of cancer, Alzheimer’s Disease, organ transplant, kidney failure, heart attack, stroke, blindness, deafness, multiple sclerosis, HIV or AIDS (due to blood transfusion or an operation), Parkinson’s disease, and other terminal illnesses.
The amount that the insurance will pay out to the insured will depend on the insurer as well. This amount can be chosen by the insurance policy holder prior to the purchase of the policy, but in general, there are predetermined levels of coverage. More so, many insurance companies will add the stipulation that the insured must survive for a specified period of time after the diagnosis. This is due to the fact that the insurance company will only give the money to the insured and not to other beneficiaries.
The money that critical illness insurance can be used for a variety of reasons, including the payment of medical bills or payment of other debt incurred. The money may also be used as temporary income, especially if the insured is unable to work due to the illness.