However, have you ever wondered what will happen if you don’t die!
Let us rephrase – what will happen to you and your family if you are alive but not able to make any living due to some illness. On top of that, you have to bear heavy medical expenses on treatments.
Here comes the critical illness solutions.
Critical illness cover, also referred to as critical illness insurance, is an insurance policy where you’ll get a ‘lump sum’ – a one-off payment – if you’re diagnosed with one of the serious illnesses covered by your insurance policy. It’s designed to pay off your mortgage, debts, or pay for alterations to your home such as wheelchair access, should you need it.
You critical illness insurance will pay out if you get one of the specific medical conditions or injuries listed on the policy. The policy will also specify how serious the condition must be.
Most policies will also pay out, if you are permanently disabled because of injury or illness. It only pays out once and then the policy ends.
Before deciding on sum assured, keep in mind factors like monthly expenditure,treatments costs and future financial liabilities in case of income loss.
Also, take into account existing covers such as Mediclaim or personal accident and disability insurance policy.
You either can buy a critical illness plan as a standalone policy, or you can combine critical illness riders with your life insurance plans. The policy terms and conditions under both the options are more or less the same. The choice between a standalone policy and a rider depends on your requirement.
The decision to buy critical illness coverage also depends on individual risk tolerance, advisers say. Mitch Reiner, an investment adviser in Atlanta, said most people are probably best off self-insuring against critical illnesses. However, he wouldn’t try to dissuade a client who would truly sleep better at night with that additional coverage.
Amit is an Independent Financial Advisor, based in Dubai since 1997. He is part of the prestigious ‘Million Dollar Round Table’ (MDRT), which is an elite club of the best financial advisors worldwide.
He has authored the ‘6-Step Financial Success Guide’, and the book ‘Creating, Preserving, Distributing Wealth’.
He helps business owners and professionals ‘Create A Second Income’ through investments.
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