Is Critical Illness Insurance Worth It?

Picture this: You're building the dream house of your life, brick by brick, with hard work and passion. As you focus on the design and decor, there's one crucial element you might overlook – a safety net for unexpected storms.

Critical illness insurance does just that: it provides you with a safety net in the event that you develop an illness and are unable to work.

When it comes to critical illness insurance, you may be wondering:

Is critical illness insurance worth it? How much does it cost? Should I buy it? What are its differences from disability insurance?

In this blog post, we will address some of the most frequently asked questions about critical illness insurance. After reading, you'll know if critical illness insurance is the right option for you and your loved ones.  

‍What is critical illness insurance?

Critical illness insurance coverage pays out a cash payment if the policyholder is diagnosed with a specific illness.

How does critical illness insurance work?

The cash payment can be used to pay for anything, but is commonly used for medical expenses.

Common disorders that critical illness insurance covers include:

• cancer,
• heart attacks, and
• stroke

Some plans also cover Alzheimer's disease, kidney failure, and major organ transplants.

Even though a critical illness insurance policy does not cover every possible health issue, it can be a useful method to protect your finances if you become ill.

How much does critical illness insurance cost ?

Your age, current health status, and the amount of coverage you seek all play a role in determining the price of your critical illness insurance.

However, the cost is often far less than that of traditional health insurance. Critical illness insurance may seem like a good deal because of the low monthly payment, but payouts are only made in the event of a diagnosis of a covered sickness. Consider the potential downsides thoroughly before committing to a policy.

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Who should purchase critical illness insurance? 

Some people feel that it is necessary to have this type of insurance, while others do not feel that it is worth the cost of critical illness insurance. 

This coverage could be especially helpful for people who are self-employed or who work in jobs that do not provide paid sick days. This is because if they became sick and couldn't work, they'd be completely out of luck financially because they won't have any coverage. 

Critical illness insurance is a good option for those who have preexisting health conditions or a family history of fatal diseases. This is due to the increased likelihood of illness or the difficulty in obtaining regular health insurance. 

There are plans available that cover a variety of critical illnesses, have varying payout levels, and provide optional perks such as the possibility to switch your plan to another type of insurance.

Unlike disability insurance, critical illness coverage is intended to cover only emergency needs, while diability insurance covers are mostly permanent.

Disability insurance is another option. Diability insurance is usually less expensive than critical illness insurance, but it provides a steady monthly payout instead of a lump sum payment.

When is the best time to buy critical illness insurance? 

When deciding to purchase critical illness insurance, here are a few things to think about:

Age: critical illness insurance premiums increase as you get older, so it is generally best to purchase a policy when you are young and healthy.

Health history: If you already have health problems, you may not be able to get critical illness insurance or you may have to pay more. It is important to disclose your health history upfront so that you can find a policy that meets your critical illness coverage needs.

Family history: if your family has a history of serious illness, you may be at a higher risk of developing a condition yourself. 

How you live: If you have dangerous hobbies or a dangerous job, you may have to pay more for insurance or not be able to get it at all. 

How to make a claim about your critical illness coverage 

The specifics of making a claim will vary depending on your insurer. However, there are some general steps that you will need to follow. 

First, you'll need to tell your insurance company what's wrong. This is usually done by sending them a copy of your medical records. 

Next, you will need to fill out a claim form and submit it along with any required supporting documentation. 

Once your claim has been processed, you will receive a lump sum payment that can be used however you see fit. 

As long as you have all the necessary paperwork, making a claim on your critical illness policy can be easy. 

Pros and cons of critical illness insurance

‍

The Pros of Critical Illness Insurance

Family security. If you have a mortgage or loved ones who depend on your , critical illness insurance is important.

Tax free lump sum. A critical illness insurance policy pays out a tax-free lump amount after 30 days of being diagnosed with a life-threatening sickness.

Premiums are guaranteed. While renewable premiums are typically less expensive to begin with, they grow more expensive to renew. It is best to buy a longer term policy, such as until the age of 65 or until the age of 75, where the premiums do not vary.

Up to 26 illnesses are covered. While the specifics of critical illness coverage vary by policy, all should cover cancer, heart attacks, coronary artery bypass surgery, and strokes.

Peace-of-mind. While no one expects to be diagnosed with a life-threatening illness, critical illness insurance provides a family with peace of mind because, God forbid, if a family member is diagnosed with a critical illness, all they have to worry about is health conditions and recovery, not economics.

The Cons of Critical Illness Insurance

Additional expenses. Those who are suffering from paying their basic living expenditures may find it difficult to purchase critical sickness insurance, life insurance, and other forms of coverage deemed necessary.

Exclusion of some illnesses. Most policies no longer cover less advanced prostate cancer cases. Check critical illness insurance policies for precise specifics as they can differ significantly between policy providers.

Existing medical issues. If some close family members have a high risk of a certain life-threatening sickness, premiums may be raised or the disease may be excluded. Those who have already had a life-threatening disease will be excluded from the policy.

The underwriting procedure. Once a critical illness insurance application is completed and submitted for processing, underwriters may exclude pre-existing conditions throughout the underwriting process.

Conclusion

Think of critical illness insurance like that umbrella you debate carrying on a cloudy day. It might feel unnecessary until the moment a downpour begins. Making an informed decision requires weighing the forecast against your willingness to get wet.

Remember, the sun might shine or the clouds might burst, but being prepared ensures you'll weather any storm.

Critical illness insurance cover can give you and your family the peace of mind that you need to get through tough times. By taking the time to understand your risks and compare policies, you can find the right coverage for your needs. 

If you are looking for financial security in case of a serious illness, a Dundas Life advisor can help. We can assist you in finding the right insurance provider with the best product to match your needs.

‍Contact us today to learn more about our products and get a free quote.

FAQ

What is disability insurance?

Disability insurance is a policy that provides benefits to policyholders who are unable to work due to an injury or illness. The benefits of disability insurance can be used to cover living expenses and other bills.

What is supplemental health insurance?

Supplemental health insurance is a type of insurance that covers expenses not covered by your regular health insurance policy. It can help cover costs such as deductibles, copayments, and coinsurance. It can also cover certain types of services not covered by your regular health insurance, such as dental or vision care.