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Critical Illness Insurance

A Guide to Critical Illness Insurance Coverage

No matter how healthy you might think you are, a serious or critical illness can strike anywhere and at any time. However, good critical illness insurance can make a huge difference for families, sometimes to the point of saving them from bankruptcies, as it is designed to help those directly suffering from a critical condition to get on financially until recovery and the resumption of normality. This coverage can provide a family the opportunities it needs to pay all their bills and handle mortgage payments and so on when a critical illness prevents the policyholder from working. In many cases, this protection can be applied to medical costs not already covered by a workplace benefits package.

Who Is Helped

Although policies do vary, there are several conditions this type of insurance can address. The top three are cancer, heart attack and stroke. There are other policy offerings that will cover other necessary treatments and conditions such as heart or major organ transplant, paralysis, bypass surgery, kidney failure and angioplasty, Alzheimer’s disease, Parkinson’s disease, blindness, deafness, HIV/AIDS, Multiple Sclerosis and more.

Big Benefits

Treatment costs for these conditions can be overwhelming and more often than not completely out of reach for those stricken and unable to work for extended periods of time. This is why good critical illness insurance coverage can be so valuable.

The three main kinds of critical illness insurance policies are the following:

Simplified Issue Individual Protection- This policy can provide coverage of up to $50,000 and conveniently does not necessitate a physical exam.
Fully Underwritten Individual Protection- This kind of a plan will mandate a physical examination and will also be more expensive. However, it offers much wider and larger coverage protection.
Life Insurance Policy Coverage- Certain life insurance plans can allow you to add on critical illness coverage as supplemental coverage (or as a “rider”) for critical illness protection. They’re generally less expensive but do have some coverage restrictions.

Payouts from critical illness plans generally are in a lump sum, though some plans will pay out in installments. The payment the policyholder gets can be used to pay for just about anything he or she deems necessary, be it medical bills that are not covered by standard insurance, home mortgage and auto loan payments, and so on.


Critical illness insurance helps in providing peace of mind for those who are in the throes of a critical illness because it ensures that they can obtain the treatment they need by filling in the gaps in their workplace benefits and normal health insurance coverage policies. It is also greatly beneficial in its provision of funds to those who need help with mortgages, car payments, food, prescriptions, experimental treatments and necessary travel costs that result from covered treatment. It can even greatly help in replacing a spouse’s income if he or she is unable to work.