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:
“Most critical writing is drivel and half of it is dishonest.... It is a short cut to oblivion, anyway. Thinking in terms of ideas destroys the power to think in terms of emotions and sensations.”
—Raymond Chandler (1888–1959)
“Men have their own questions, and they differ from those of mothers. New mothers are more interested in nutrition and vulnerability to illness while fathers tend to ask about when they can take their babies out of the house or how much sleep babies really need.”
—Kyle D. Pruett (20th century)
“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)