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Critical illness insurance: what is it and who needs it?


Getting diagnosed with a critical illness is one of the most trying times for anyone. The worst part is it not only affects you but also those around you. Fortunately, life insurance providers can help soften the financial blow that comes with a diagnosis while you focus on getting better.

In this post, we discuss what critical illness insurance policy covers, its important aspects, and finally who needs it.

Ready? Let’s get started!

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Critical illness cover defined

When you’re diagnosed with a critical illness, chances are you are unable to work and therefore your income is impacted. If you have people who depend on you, you may be forced to draw from your savings or worse still ask for help from family and friends. This makes getting through the illness a lot more burdensome both emotionally and financially.

Critical illness cover is a type of protection that offers you financial support if you’re battling a critical illness. This policy provides a tax-free lump sum amount to help your loved ones lead a comfortable life until you’re healthy again to go back to work.

Important aspects of the critical illness cover

Like all insurance policies, an insurance provider follows strict guidelines enlisted in your insurance policy when a risk occurs. This helps them determine if you’re eligible for support or not.

For starters, a critical illness policy defines the list of conditions that your insurer covers. So, if you’re diagnosed with a medical condition that’s ineligible for a pay-out, the insurer will be under no obligation to issue it.

However, this shouldn’t scare you. Usually, you will discuss your needs with the insurance provider before they advise on the appropriate cover for you.


Managing your critical illness cover

You can increase your chances of benefiting from the cover when the risk occurs by doing a few things as follows:

Exercise the principle of utmost good faith

Both you and your insurer have an obligation to act in good faith towards each other. On your part, you must be truthful when declaring information that determines the level of security or cover you need from the insurer.

On the insurer’s part, their insurance policies must have clear and concise terms and conditions. Before you commit, it’s critical that you understand how the policy works. For example, determine the medical conditions it covers, those it doesn’t, how much you pay monthly and why, and any other relevant information.

Check if you need an extra policy

When it comes to insurance, chances are that your preferred insurer’s policy doesn’t cover all critical illnesses. For this, you might have thought about buying an extra plan from another provider to expand the scope of your medical cover.

Before making this decision, t’s important to examine the cost, implications, and other key strings attached to the new policy. Find out whether the premiums are affordable and also assess whether the benefits outweigh the cost. If the new cover checks these boxes, you can go ahead to acquire it as well.

Determine what to prioritise once the risk occurs

When you’re diagnosed with a critical illness, your insurer may give you a lump sum as one of the insurance benefits. It’s upon you to decide how you’re going to spend this money which is why having a list of priorities beforehand is needed.

Start by preparing a list of important needs that you can take care of with the payout. Remember, the goal is to ensure this money is able to last you as far as possible or until you are healthy again to go back to work.

Who needs a critical illness cover?

It’s impossible to predict what the future holds for anyone. However, it’s within the reach of each of us to prepare for it. So, how do you know if you need a critical illness cover?

Here are your guiding aspects:

Your family has a history of genetic critical illnesses

Take an insurance cover for those illnesses that have persisted in your family tree just in case you follow suit.

Your partner has no stable source of income

The insurance cover will support you financially when critically ill thus saving your partner from the tough burden of meeting the medical bills.

Your work, lifestyle, environment predisposes you to a critical illness

Some living conditions increase your chances of acquiring life-threatening illnesses than others.

What’s preventing you from taking the critical illness cover? We’d love to hear your feedback in the comments below.