Need Of Critical Illness Insurance
As a result of rising medical costs, people living longer, and traditional health insurance plans leaving more consumers with gaps in coverage, critical illness insurance should be an essential element in a person's overall financial protection portfolio.
Is Critical Illness insurance sold in addition to DI or instead of DI?
Critical illness insurance provides the full policy benefit in a lump sum payment on diagnosis of a critical illness.
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Disability insurance sometimes referred to as "income replacement" insurance, provides a monthly payment if a person becomes disabled and can no longer work.
DI policies pay a monthly income during a predetermined period that the insured is unable to work. In general, DI benefits are limited to a percentage of the insured's regular income and stops once the disabled person is able to earn an income or he no longer meets the definition of disability as described in the policy.
Disability policies often have a waiting period from the onset of disability. Also, unlike critical illness benefits, disability benefits may be affected by any other income the insured receives.
Critical Illness insurance differs from DI in that it covers the costs related to recovery from major illnesses. These policies pay a set amount to the insured or beneficiary when a qualified event happens.
Each policy offers different protections, it is beneficial for insurance brokers to sell both types of coverage. In many cases, it's advantageous to optimize protection by selling the two products together.