What is Critical Illness (CI) Insurance?
Critical Illness Insurance is a newer type of insurance policy that covers many of the expenses experienced when the insured falls ill with a specific type of life-threatening, quality-of-life-threatening sickness, or disease. Many companies offer their employees coverage for this type of life event, usually at the expense of the employee. This insurance is handled like most other insurance policies, and can be bought either individually or through the company’s health plan with monthly payroll deductions.
Who is This Insurance For?
As you probably have guessed, CI insurance is meant for any individual that has the possibility of being inflicted with a “critical illness.” For most policies, illnesses such as Alzheimer’s, cancer, blindness, deafness, paralysis, kidney failure, sclerosis, organ transplants, and many others qualify as being a “critical illness.”
How Does It Work?
CI insurance works like many other insurance plans. Once the individual is inflicted with a critical illness, they can be eligible for benefits. Sometimes a survival period of 7 to 14 days must be met in order for benefits to be paid. Once this period is met, an amount specified by the insurance company is paid in a lump sum to the policyholder.
What is All Covered?
Generally, this lump sum payment can be used for whatever the insured would like. Most of the expenses that are covered by this lump sum payment include medical costs related to the illness, travel expenses for treatments, the costs involved with recuperation and rehabilitation, and the replacement of income for both the individual inflicted with the illness and their spouse if the spouse is taking care of them. Sometimes these payments can even be used to set up a fund to be used for expenses required for the change of lifestyle of the policyholder.
Alternative Forms of CI Insurance
Some insurance policies specify that, instead of being paid a predetermined lump sum of cash , the insurance company pays the hospital or treatment center directly for costs incurred. This type of plan keeps the individual out of the insurance process, making things easier for them, while also getting rid of the need for lengthy reimbursement processes.