What is Critical Illness Insurance?
Critical illness insurance is a type of insurance policy that provides a lump sum payment to the insured individual after they are diagnosed with a specified serious condition. These conditions, often chronic or life-threatening, can include heart attacks, strokes, cancer, and major organ transplants, among others. The primary purpose of critical illness insurance is to offer financial security and support during a difficult time, allowing individuals to focus on their recovery rather than financial burdens.
Unlike traditional health insurance, which only covers medical expenses, critical illness insurance pays directly to the policyholder. This flexibility allows individuals to use the funds as they see fit—whether it’s to cover hospital bills, pay off debt, or maintain their standard of living while they are unable to work.
Policies vary in coverage and benefits, so it’s essential to carefully review terms before purchasing. It often includes a waiting period, and pre-existing conditions may not be covered. Critical illness insurance can be a valuable addition to a comprehensive financial plan, providing peace of mind and financial stability in the face of unforeseen health challenges.