Critical Illness Insurance

What is Critical illness insurance?

Critical illness insurance is an insurance policy where the insurer is contracted to simply make a large sum single payment in cash if the insured person is diagnosed with one of the illnesses mentioned on a predetermined list. In UAE the most commonly diagnosed critical illnesses for people less than 65 years are cancer, heart attack and stroke. Critical illness insurance is often overlooked because people consider it to be unnecessary or too expensive. But in reality, this policy is relatively cheap and the policyholder will receive an outsized payout during the recovery process. This policy helps them in taking extra time off from work and also to seek a better treatment facility.

Why Critical Illness Insurance is Important?

In this fast-paced world, with unhealthy lifestyles people are more prone to critical illness. If you are the only earning member of the family, your family solely relies on you for their financial support and the wise decision you can make is to protect yourself and your family financially.
Critical illness insurance pays for those expenses that are not paid for by medical insurance policies. The insured will receive a lump sum that can act as a replacement of your income and can be used as a financial parachute to prevent a hard landing for you, in case of your inability to work for an extended period. You can buy critical illness insurance on your own or your business can pay for it. You can also add it to your current life insurance plan.

How Does Critical Illness Insurance Work?

Critical illness insurance policy works by paying a lump-sum benefit amount following the diagnosis of a covered illness condition. After the diagnosis is done, the covered individual submits a claim for benefits that are then paid directly. The benefits from the critical illness insurance policy can be used to cover the medical expenses, living expenses, income replacement etc. In general, this policy gives you the freedom to solely focus on the recovery instead of worrying about the expenses and the burden of it. 

Critical illness insurance covers a wide range of most commonly heard serious illnesses and conditions. Minor ailments don’t trigger payment, but a diagnosis of one of the following conditions will be covered in the policy.

Heart Attack, Coronary Artery Bypass, Surgery, Angioplasty, Stroke, Kidney Failure,
Major Organ Transplant, Advanced Alzheimer’s disease, Invasive or Non-Invasive ,Cancer,
Paralysis, Coma, Multiple Sclerosis, Aplastic Anemia, Bacterial Meningitis, Bone Marrow Transplant.

Some policies also cover health ailments like:
Advanced ALS, Advanced Parkinson’s disease, Loss of Sight, Loss of Hearing, Severe Burns, Benign Brain Tumor

Benefits of Critical Illness Insurance

To pay for the critical illness medical services that might otherwise be unavailable.

To pay for treatments  not covered by a traditional health insurance policy. 

To pay for the daily living expenses of the family, so that the insured person can take time off work and focus on recovering instead of worrying about paying bills. 

If the insured person is terminally ill and needs a serene place to recuperate, then they can use the funds for a vacation as well. 

Critical illness insurance ensures that there is no dent in your savings.

Critical illness insurance offers a large sum assured at relatively lower costs.

Exceptions in Critical Illness Insurance Policy 

Generally, the critical illness insurance policy doesn’t provide insurance coverage for the following health ailments, 

  1. The critical illness developed due to tobacco smoking, alcohol, drug intake, internal or external congenital disorder etc. 
  2. Pregnancy or childbirth-related critical condition, infertility treatment to assist reproduction etc. 
  3. Illness caused due to war, terrorism, any war operations etc. 
  4. Hormone replacement treatment

Bottom Line

A critical illness insurance policy is different from a regular health insurance policy. It provides different kinds of cover for serious health issues listed as critical illnesses and those that are not sufficiently covered in regular health insurance plans. The benefits of the claim are directly paid to the insured and can be utilized as per the wishes of the person. This is not a replacement for medical insurance, but acts more like a compliment and financial cover in case a person suffers from a serious health condition.