Critical illness insurance is a relatively new type of insurance. Some employers offer it as part of a benefits package. But most likely, you’ll have to buy critical illness insurance on your own. This policy covers expenses experienced when the policyholder falls ill with a specific type of life-threatening sickness or disease.
Critical illness insurance is for people who have the possibility of being inflicted with a critical illness. Illnesses such as Alzheimer’s, blindness, cancer, deafness, paralysis, kidney failure, sclerosis, organ transplants, and others qualify as being a “critical illness.” If these illnesses run in your family, then you might want to consider this insurance.
Critical illness insurance becomes active once the policyholder is afflicted with a critical illness. Once the individual is diagnosed, they become eligible for benefits. There is sometimes a survival period of 7 to 14 days. If the policyholder survives that period, then they will start receiving the benefits. Once this period is over, an amount specified by the insurance company is paid to the policyholder.
The lump sum payment can be used for whatever the policyholder wants. However, the purpose of the insurance is to pay medical costs. Some expenses covered by this sum include medical costs related to the illness and travel expenses for treatments. The costs involved with rehabilitation, and the replacement of income for the individual, is also covered by this insurance.
The insurance company might decide to pay the healthcare provider directly. Instead of giving the policyholder the cash, they can just pay the doctor. This often makes things easier for the policyholder. It keeps them from having to get involved in the insurance process.