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Critical Illness Insurance


Critical illness insurance is also known as dread disease policy. This is an insurance product whereby the policyholder is entitled to payment by the cover provider if he/she contracts a particular disease. These diseases are highlighted in the insurance policy terms. The policyholder is required to survive for a particular period for the policy to mature. This time is called survival period and it varies from one company to another. Most companies use a survival period of 2 weeks. Most employers currently are insuring their employees with this cover. This employing company contracts an insurance firm to cover for their employees. Employers use this cover to protect their workers from financial constraints in case of sickness. Some employers also use the cover as a means of attracting people to work in their company.

Who requires this cover?

Critical insurance cover is mostly subsribed to by individuals suffering from terminal diseases. In most cases, the compensation is in not in terms of lump sum cash. The cover is instead used to pay for medical bills of the patient. The cover can also be used to pay for decreased income of the affected individual resulting from the inability to work due to sickness. The can also be used to pay for a mortgage in case the policyholder succumbs to the illness.

How does it work?

There are many different types of compensation. A policyholder can be paid a lump sum cash as highlighted in the cover terms. This payment can be made immediately upon diagnosis, and no other payment is made. Alternatively, the insurance provider pays the medical bills.

Covers available

The standard policy is where a policymaker is paid a pre-determined amount by the cover provider. In another form, the cover provider directly pays a healthcare provider money required for treatment of the policyholder. Mostly in this type of cover a policyholder is required to select a few hospitals where he/she wants to be treated in. An alternative cover pays for travel and accommodation expenses of the policyholder when he/she goes to another country for treatment.

Benefits of the cover

A policyholder receives some benefits upon subscription to this cover. They include
1. The policyholder is able to pay for treatment and care.
2. The policyholder can replace income lost during the convalescing period.
3. The policyholder can meet demands of the new lifestyle brought by sickness.