There are many myths surrounding what critical illness insurance is and the role it plays in a long-term financial strategy. Below, we’ll look at the top three misconceptions about critical illness policies and why they are not true.
1. Critical Illness Insurance is the Same as Disability Insurance
While many people confuse the two types of coverage, critical illness insurance and disability insurance are not the same. Disability insurance replaces your income with a monthly payment if you’re unable to work due to an illness or injury. Critical illness insurance, on the other hand, provides you with a lump sum payment if you’ve been diagnosed with a chronic condition or serious illness, such as cancer or a heart condition. The benefit can be used any way you want — you can use the money to cover the cost of treatment or, if you’re self-employed, you can use the cash to pay for your day-to-day expenses. Furthermore, the benefit is yours to keep, even if you recover from the illness.
2. All Critical Illnesses are Covered Under Critical Illness Insurance
A common misconception is that critical illness plans cover all kinds of critical illnesses. This is not true. The list of insurable illnesses varies from provider to provider and from policy to policy. To make a claim, your condition must be diagnosed by a physician who specializes in the critical illness covered by your policy. Upon approval of your claim, the full amount of your critical illness insurance benefit will be paid out in a one-time, lump sum amount.
3. CRITICAL ILLNESS Insurance is the Same as Life Insurance
Life insurance policies and critical illness policies are different in that one type of coverage pays a benefit to your beneficiary, or beneficiaries, upon your death, while the other pays a living benefit to you. You do not need to be terminally ill to receive the benefit, nor do you have to die for the benefit to be paid. Critical illness insurance is meant to help you cover the expenses you may incur while being treated for a serious illness.
Critical illness coverage can help protect your finances and bring peace of mind should you ever be diagnosed with a serious illness. Contact us today for more information about whether critical illness insurance is right for you.