Critical Illness Insurance

Critical illness insurance is considered an affordable health insurance plan which provides you with the protection against more than 30 critical illnesses and some surgical procedure, depending on the individual medical insurance policy terms.

The critical illness insurance is usually formed as part of the basic insurance – term life, whole life or investment insurance. You can also purchase it as a rider to be attached to an investment or permanent life insurance. Acceleration benefit and additional benefit critical illness covers are two basic types of policy that you can find in the market.

Below are some common features of the critical illness insurance:

1) You are usually only allowed to claim one of the critical illnesses listed in the policy terms.

2) In order to reduce the risk of moral hazard – there is usually a maximum limit on the total amount (e.g. Set at maxi. $600,000) that you can buy, depending on individual health insurance company.

3) There will be no restriction on the use of the benefit payment.

4) The insurer will pay a lump sum amount to the insured once he/she is detected with one of the listed critical illnesses.

5) Once you surrender the basic policy or have been converted into an extended term policy, the critical illness rider will get terminated.

6) This type of critical illness health insurance will usually expire on a maximum specific age e.g. 65.

7) Upon purchasing the critical illness insurance, there will be a waiting period before you can make a claim from the insurer.

8.) The premium is usually not fixed and subject to adjustment by the insurer within each age-band.

9) There will be no accumulated cash value for critical illness insurance.