Critical Illness Explained

Serious illness preceding death is a frightening prospect. Most of us know someone who has been affected by an illness such as heart disease, stroke, cancer, multiple sclerosis, Parkinsonís disease, kidney failure, or another serious medical condition. The effects of the illness on the patient and his or her family can be devastating financially and emotionally.

Critical illness insurance is a type of insurance that covers between 21 and 25 types of illnesses in most cases. An insurance benefit is paid as a lump-sum to the insured person in the event the individual is diagnosed with one of these illnesses specified in the policy.

This type of insurance was designed with the thought that the funds would be used for items such as home care, home renovations to cover home conversion costs to deal with the illness issues, or to seek alternative or private medical care, in the U.S. for instance. The reality is that the person who receives the money can do with it whatever he or she pleases. This could include the holiday of a lifetime, paying off the mortgage so his or her survivor does not face that debt, funding a Registered Education Savings Plan so a child can benefit from a higher education without the burden of future loan repayments.

Some insurers offer return-of-premium with some critical illness insurance policies, whereby premiums are refunded if an illness does not occur during the term of the policy.

Individuals and families should discuss their insurance needs with an experienced life insurance agent.

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