Critical illness insurance or critical illness cover is an insurance product, where the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed in the insurance policy.
The policy may also be structured to pay out regular income and the payout may also be on the policyholder undergoing a surgical procedure, for example, having a heart bypass operation.
The policy may require the policyholder to survive a minimum number of days (the survival period) from when the illness was first diagnosed. The survival period used varies from company to company, however, 28 days and 30 days are the most common survival periods used.
The contract terms contain specific rules that define when a diagnosis of a critical illness is considered valid. It may state that the diagnosis need be made by a physician who specialises in that illness or condition, or it may name specific tests, e.g. EKG changes of a myocardial infarction, that confirm the diagnosis.
In some markets, however, the definition of a claim for many of the diseases and conditions have become standardised, thus all insurers would use the same claims definition. The standardisation of the claims definitions may serve many purposes including increased clarity of cover for policyholders and greater comparability of policies from different life offices. For example, in the UK the Association of British Insurers (ABI) has issued a Statement of Best Practise which includes a number of standard definitions for common critical illnesses.
Credit : http://en.wikipedia.org/wiki/Critical_illness_insurance
2 comments:
The take up of critical illness cover is not as high as one would expect given the statistics. Cancer research claims that we all have a one in three chance of being diagnosed with cancer at some stage in our lives. The standardization of claims and definitions will help with public perception of this porudct but it will take time.
With more than 60 insurance providers offering two hundred different policies, choosing the one that's right for you can be difficult. More than anything else, getting good critical illness insurance requires very close inspection of your policy.
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