The Benefits Of Ensuring You Have Critical Illness Insurance Within Your Life Plan

Critical Illness cover is a form of insurance product whereby the policy holder receives a lump sum cash payment from the insurer once diagnosed with any given illness stipulated in the policy. Unlike full life insurance, it does not require the policy holder to die.

To ensure that the pay-out is triggered, the policy-holder must survive a minimum term to ensure that this is considered a survivable illness, usually about 28 days. Up to two dozen different illnesses can be covered by the policy and they are all survivable to a greater or lesser degree but with improving medical technology the probability of living a full life after diagnosis is increasing.

A lot of people consider this type of insurance a must for any mortgage protection policy. The reason for this is if you do suffer a heart attack, stroke or cancer, but to name a few conditions, having your mortgage paid off almost immediately can be a great boost to aid recovery were possible.

Whilst most critical illness policies do pay out a lump sum you can get some plans that pay out a monthly or annual benefit. This means that it can be used as an income replacement policy. That said Critical illness insurance is no substitute for income protection insurance as the trigger point for a claim is diagnosis of a critical illness and income protection policies can pay out if you are just off work due to sickness and disability which could be considered far less than what is needed for a critical illness claim.

When critical illness cover was devised, the four main conditions covered were heart attack, cancer, stroke and coronary by-pass surgery but this has now been extended to include organ failure, or transplant, paralysis and other conditions like Alzheimer's disease.

This type of policy (which can also been known as Living Assurance or Serious Illness Insurance) has such obvious benefits in everyday life and might seem like it has been around forever, like life insurance. But in fact the first plan was only created as recently as 1983 by Dr M Barnard who termed it cover for "Dread Disease." His foresight against the unexpected has made many lives easier today.

Obviously the policy safeguards the policy holder, however the insurers themselves are not out to lose money, and therefore the person taking out the policy must give the insurer no reason to think a payout is imminent. The policy holder must be fit and healthy at the outset and factors such as smoking and dangerous sports are taken into consideration.

Due to the potential cost of the policy, and diminishing health later in life, taking out a policy in early life is more beneficial. It spreads the payments longer, therefore making them lower, and it means that the insurer is less likely to be worried about illnesses associated with old age. There are only a small minority who will offer cover to someone over pension age.

Critical Illness cover is beneficial for peace of mind, and protecting against the unforeseen. By adding life insurance to the policy too then all options are covered, for a full life after the diagnosis of what can be a relative minor issue, or if the worst happens then there is some financial help for those left behind.

Resource: www.ezinearticles.com