The importance of insuring yourself for Critical Illness

Insurance against death is self-explanatory and the terms of that policy are all based around the policy holder passing away. Critical Illness on the other hand does not require the policy holder to die and provides a cash amount upon diagnosis of a particular illness.

To ensure that the pay-out is triggered, the policy-holder must survive a minimum term to ensure that this is considered a survivable illness, usually about 28 days. Up to two dozen different illnesses can be covered by the policy and they are all survivable to a greater or lesser degree but with improving medical technology the probability of living a full life after diagnosis is increasing.

A lot of people consider this type of insurance a must for any mortgage protection policy. The reason for this is if you do suffer a heart attack, stroke or cancer, but to name a few conditions, having your mortgage paid off almost immediately can be a great boost to aid recovery were possible.

Policies for critical illness can either pay out every month, or every year, but more often they are a lump sum. If the former option is chosen then it could potentially work as an income replacement policy although this is not necessarily a reason to ignore an ordinary income protection plan which can pay out over simple illnesses and short times off work.

Examples of critical illnesses include the obvious, such as cancer, stroke, and heart-attack as well as less common conditions such as Alzheimer's, blindness, deafness and the failure of other major organs such as the kidneys.

The first critical illness policy was created in South Africa by a Dr Marcus Barnard. He launched the plan in October of 1983 and he called it Dread Disease Cover. Since that date the whole concept and need for this type of insurance has spread right across the globe to many market places, and has equally been known under many guises such as living insurance and serious illness insurance.

Obviously the policy safeguards the policy holder, however the insurers themselves are not out to lose money, and therefore the person taking out the policy must give the insurer no reason to think a payout is imminent. The policy holder must be fit and healthy at the outset and factors such as smoking and dangerous sports are taken into consideration.

Policies are easier and more affordable to take out at a young age because incidence of illness is lower, and the insurers see a lower risk. The advantage of taking out a policy when young is that the premium is lower and the payments are spread over a longer period of time. Like any type of insurance, the cost is based on the probability of a payout.

Critical illness cover is a very useful precaution for a young person and as life goes on it becomes more expensive but also more relevant. It adds a little peace of mind for you and, with additional life cover included it would ensure peace of mind for any loved ones left behind.

Article Source: http://www.articlerampage.com}

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