Although medical insurance and other insurance coverage your clients might have are essential, they won’t cover everything. Medical treatment has never been better, but is also expensive. People today can experience financial hardship because of the expenses their insurance does not cover. Critical illness insurance could be strong supplement to other health insurance. Determine if your clients need critical illness by learning more about what it covers.
is a type of insurance product where the insurer is typically contracted to make a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed in the insurance policy. The policy may also be structured to pay out regular income, and the payout may also cover the policyholder undergoing a surgical procedure, for example, having a heart bypass operation. The policy may require the policyholder to survive a minimum number of days—known as the “survival period”—from the time the illness was first diagnosed. This “survival period” varies from company to company.
However, 14 days is the most typical length of time used. The contract terms contain specific rules that define when a diagnosis of a critical illness is considered valid. It may state that the diagnosis needs to be made by a physician who specializes in that illness or condition, or it may name specific tests, e.g. EKG changes of a myocardial infarction, that confirm the diagnosis. In some markets, however, the definition of a claim for many of the critical diseases and conditions has become standardized, thus all insurers would use the same claim definition. The standardization of the claim definitions may serve many purposes, including increased clarity of coverage for policyholders and greater comparability of policies from different life offices.
There are also alternatives to the lump sum cash payment model that insure critical illnesses. These critical illness insurance policies directly pay health providers for the treatment costs of critical and life-threatening illnesses covered by the policyholder’s insurance policy, including the fee of specialists and procedures at a select group of high-ranking hospitals up to a certain amount per episode of treatment as set out in the policy.