There are a lot of people who think that if you have life insurance there isn’t much point in having critical illness insurance. They also think that if you have critical illness insurance there’s no need for life insurance. Both of these cases couldn’t be further from the truth.
There is only one reason why a life assurance policy would pay out, that being on death within the term of the policy. Policies will often cover terminal illness and payout before death actually occurs but apart from this death is the main reason why payouts are made. In other words, if you are diagnosed with a critical illness, a life insurance policy won’t help you straight away but at least you’ll know that you have life insurance in place.
Critical illness insurance policies pay out when you are diagnosed with a critical illness or specified dread disease. The comprehensiveness of policies can vary but most cover at least 20 standard illnesses including heart attack, stroke and cancer. These illnesses are usually severe or life threatening but in most cases the sufferer can go on to live for years after the diagnosis. A critical illness policy therefore takes care of you when you are alive.
It is fairly obvious then, that life insurance and critical illness insurance are two very different policies but they do complement each other well. If you had just been diagnosed with a critical illness and you received your insurance claim chances are you would be going through a fairly scary time. You and your family might just take comfort in the fact that at least you have life insurance as well.
29. June 2009 at 10:02 am
Curious how people think that having life (death insurance) means you not need Critical Illness cover?
Difference between the two is simple: life insurance pays out when you die – critical illness pays out while you are alive.
29. November 2009 at 8:27 am
Both should be taken in advantage. While we are still alive we better utilize the critical illness insurance.
Clark@Life Insurance Calculator