Life insurance and critical illness insurance have some similarities. Yet, they differ greatly in their terms and usage. It may be more costly to purchase life insurance if you meet some unfavorable criteria. Critical illness insurance is specific in its usage in that it can only be used upon diagnosis of a critical illness. Some qualities of critical illness insurance overlap with typical life insurance coverage. The facts about both types of insurance plans will be explained here so that you can educate yourself and plan for your future wisely.
Life insurance is a form of insurance that is typically paid out at the time of the insured’s death. These funds can be used as seen fit, but they are often used to cover the funeral and any expenses that are left behind. If you are a smoker or have certain health concerns, you may not be eligible for coverage or you may have to pay higher premiums. Sometimes the insured can use these benefits as a loan against the policy. Any money used prior to death will decrease the benefit upon death if not paid back. The funds you can borrow against the loan depend on how long you have been paying into the policy. For example, if you’ve only paid into the policy for one year, usually there is no cash value. This may be the case for up to five years. In addition, only certain forms of life insurance hold cash value. Term life insurance has no cash value and only pays upon death. If you do not pass within the given term, the policy is void without ever receiving a payout. Many life insurance policies do not pay a lump sum. Often, annuities are paid to the beneficiary over a span of time.
While critical illness insurance has very specific criteria to receive a payout, it is very versatile in its usage. For you to receive a payout, you have to be diagnosed with a covered critical illness. At times, you may have to have the critical illness for up to a month before receiving your benefits. There are no annuities or structured payments. You receive your benefits in one lump sum. These benefits have no restriction on how it can be used. You can use the benefit to cover medical bills, lost wages, and even to prepare for a funeral if you are diagnosed with a critical illness that is terminal. This form of insurance also comes in handy if you have family history of a health problem that often results in critical care. The beauty of critical illness insurance is that it can serve you and your family both in life and in death. It is versatile and provides you the protection you need when illness strikes.
Now, you have the information you need to make informed decisions for you and your family. Life insurance may be a very wise investment in your family’s future as death is inevitable. It is also a great complement to critical illness insurance. In these uncertain times of economic recession, can you trust that you won’t become critically ill from an illness or perhaps a car accident? Cover yourself in life and in a terminal medical event. Critical illness insurance is surely a wise investment in you and your family’s future for your life and in your passing.