What Is Illness Insurance

Looking for illness insurance may strike you as being a good idea but you may perhaps be a little confused at some of the terminology you’ll see.

A short explanation may help and allow you to compare critical illness cover (and other forms of illness cover insurance):

• there are two generic forms of illness insurance designed primarily to relate to the severity and potential financial impact of your illness;

• the first of these may be called short-term sickness insurance and it may form part of a mortgage protection policy or perhaps what is called Accident, Sickness and Unemployment insurance (ASU) – it typically pays out a monthly amount in the event you are temporarily unable to work due to relatively minor health conditions;

• the second type is called critical illness cover insurance or serious illness cover insurance – these policies pay out lump sums that may help you deal with the financial consequences of being diagnosed with a potentially life-changing condition;

• there may be differences between serious and critical illness cover insurance, as you may see if you undertake an exercise to compare critical illness cover;

• serious illness cover insurance may typically cover more conditions than critical health insurance and it may make multiple payouts if you are diagnosed with various illnesses – by contrast, critical cover will typically only pay out once;

• some illness protection insurance may allow you to link together policies for critical/serious illness with life insurance cover – that may be useful in terms of broadening your financial protection;

• as you may expect, policies of this type may not provide cover for conditions that you were already suffering from at the time you took out the insurance – it is extremely important that you correctly declare your heath position at the time you take out the insurance, as making false or incomplete declarations may subsequently invalidate your cover completely;

• illness insurance may make the difference between you suffering a serious illness or a serious illness in tandem with a financial crisis – it is a subject to be taken seriously and care should be exercised when selecting a solution.