Critical Illness Insurance

When you are hit with a devastating illness, such as cancer or heart disease, your health insurance may not be enough to pay for all the bills. And on top of that, you may be prevented from working, which can mean no income for weeks or months. If you have a critical illness insurance policy, you don’t have to worry about those issues.

What is it?
Insurance that covers critical illnesses is a type of supplemental coverage that works in concert with your other insurance policies. It covers you for a range of serious illnesses — usually cancer, heart attack, stroke and a few others. Though you can buy an individual policy, many companies offer the insurance as part of a voluntary benefits plan, allowing you to take advantage of lower group rates.

Who is it for?
A critical illness policy can be a good idea for anyone, but it is especially important for people with a family history of cancer or heart problems and people who could face a financial hardship if they were hit with a serious illness.

How does it work?
A critical illness policy will pay you a lump sum to help you deal with the expenses of a major illness. If you are diagnosed with an illness that is covered in the policy, you would need your doctor to fill out a form attesting to that fact, which you would submit to your insurer. The insurer will then pay out the amount called for in the policy, which you can spend however you want.

Types of coverage
Most critical illness policies are pretty standard, although they may vary in the types of conditions they cover. Some policies cover serious, disabling injuries in addition to illnesses. Some policies also may pay actual expenses rather than a lump sum.