Need For Critical Illness Cover
Critical illness cover was originally sold with the intention of providing financial protection to individuals following the diagnosis or treatment of an illness deemed critical. Critical illness may be purchased by individuals in conjunction with a life insurance or term assurance policy at the time of a residential purchase, known as a 'bolt-on' benefit.
The finances received could be used to:
- pay for the costs of the care and treatment;
- pay for recuperation aids;
- replace any lost income due to a decreasing ability to earn; or even
- fund for a change in lifestyle.
This insurance can provide financial protection to the policyholder or their dependents on the repayment of a mortgage due to the policyholder contracting a critical illness condition or on the death of the policyholder. In this type of product design, some insurers may choose to structure the product to repay a portion of the outstanding mortgage debt on the contracting of a critical illness, whilst the full outstanding mortgage debt would be repaid on the death of the policyholder. Alternatively, the full sum assured may be paid on diagnosis of the critical illness, but then no further payment is made on death, effectively making the critical illness payment an 'accelerated death payment'.
Some employers may also take out critical illness insurance for their employees. This contract would be in the form of a group contract and has become an essential strategy used by employers around the world to both protect their employees financially as well as attract more employees to consider working for the company.
Read more about this topic: Critical Illness Insurance
Famous quotes containing the words critical, illness and/or cover:
“Somewhere it is written that parents who are critical of other people’s children and publicly admit they can do better are asking for it.”
—Erma Bombeck (20th century)
“... how I understand that love of living, of being in this wonderful, astounding world even if one can look at it only through the prison bars of illness and suffering! Plus je vois, the more I am thrilled by the spectacle.”
—Edith Wharton (1862–1937)
“There is reason in the distinction of civil and uncivil. The manners are sometimes so rough a rind that we doubt whether they cover any core or sap-wood at all.”
—Henry David Thoreau (1817–1862)