Critical Illness Insurance Policies
Critical illness insurance protects against financial loss associated with common critical conditions — including cancer, heart attack or stroke, Alzheimer's disease, renal failure, major organ transplant and more. Typically, policies pay benefits as a lump sum to an insured person upon diagnosis of a covered condition although some policies make structured payments over time following such a diagnosis. However, insured persons can sometimes elect to have benefits assigned to a beneficiary or a provider of services. Policyholders may use benefits to cover treatment costs, convalescence costs, income replacement or even unrelated expenditures.
The evolution of modern illness and its treatment now makes critical illness insurance more important than ever. Advances in nutrition and medical science over the last century have transformed medicine from the treatment of acute illness to that of chronic illness, so conditions that may have once been fatal are now often survivable. For instance, a heart attack — almost always fatal in the past — now represents a generally survivable episode within a course of treatment for heart disease. Thus, family breadwinners now face loss of income for reasons other than death since a chronic illness can result in devastating medical bills or disability precluding work.
Critical illness policies are often available through a place of employment, either as an employee benefit or as a direct purchase through a workplace market. Persons with financial dependents, outstanding debts, a family history of critical illness or a need to supplement existing health coverage are good candidates for coverage. Typically, such policies are highly affordable, depending on the chosen coverage amount, and often offer discounted rates for persons in good health, and some policies even accept persons with impaired risk. Usually, a licensed insurance agent associated with an employer's benefits program can help evaluate an employee's need for such coverage and appropriate benefit amounts.
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