In this article, we will discuss the advantages and drawbacks of taking a critical illness insurance cover. Also, we will discuss things to know before you take a critical illness cover and reasons why skipping it is bad.
What are the advantages and drawbacks of critical illness insurance?
There are various advantages and drawbacks to a critical illness insurance plan. Given below are some of the pros which you can find inside of a critical illness cover.
- Pays out an aggregate amount
When you take a critical illness insurance cover, it is usually taken for a long period. This is why the cost of the cover is high as sometimes you won’t know the exact expenses. This is why it is recommended that people take a critical illness cover for a long time and long period. They pay the money out in lump sum so that they can help the insured person to pay for anything they want. Mostly the insured person uses this money to pay for the hospital bill and also house bill.
- Payout is tax-free
This suggests that when you are receiving the money from the insurance company. The whole amount of the cover will be given to you as it is without taking out the tax amount. This is because there is no tax taken on these kinds of insurance policy covers. If taxes are charged, they will be done for a lower percentage than the regular one.
- It can be linked with life insurance
This implies you can take this policy along with life insurance to ensure extra protection. This is legally approved to take and gives extra layers of protection to the customer. Life insurance is taken till the insured reaches 60 years of age, or the contract ends, or they die in between. But the critical illness is taken for life long till the disease is gone from the person.
- Allows you to take a timeout to recover
This cover allows you to take a timeout from your job and take rest till you recover. The cover is permitted by the law to allot holiday from the job to the insured person. So that they can take proper rest at their home till they feel fine or are treated.
- Some policy will pay for children also
If the insured person’s family member is diagnosed with a critical illness, they are insured. The child of the insured person can also be diagnosed with a critical illness and can be covered in the same policy. Given below is the list of some cons of the critical illness insurance policy.
- The cover can be expensive
Since this policy is taken for a long period, the cost of the cover can be expensive. This signifies that to pay back the value of this policy will be a lot expensive as you will have to pay it back on a monthly basis and at the correct time to avoid late repayment fees.
- You have to meet different qualifying definition
This determines that there are different kinds of definition which you will have to meet. If any one of the definitions is not met by the insured person, then the policy will be cancelled. This denotes that the person will not get any money from the policy. They will also be sent a mail and a message from the company on why they have cancelled their policy.
- Different types of covers are confusing
Even in this kind that is the critical illness insurance cover, there are different types. These types can be a lot confusing, so you have to spend a lot of time carefully reading them. Another thing is that you will have to read the terms and conditions and select the one which is best for you.
What are things to know before you take critical illness insurance cover?
Here is a list of things that you need to know before taking the critical illness insurance cover.
- What is covered in critical illness insurance?
The most important thing which is covered in this policy is the monthly payment for the insured bills. This indicates that they will get a monthly payment of money which they can save to pay the bill. Or else the insured person can send that money back to their family to support them.
- How long does critical illness insurance provide coverage?
The total time of the critical illness insurance cover will depend on the illness you are facing. There is a certain cover that will give you the cover of up to 100 years and is very rare to find. Most of the cover given in Singapore is till the time when the person reaches their retirement age.
- How much critical illness insurance cover do you want?
The total amount of the critical illness will depend on the illness that you are facing and also the time of the insurance. Usually, most of this policy is taken for up to 5 years, while some take it for ten years. The harder and stronger the illness more will be the cover given to the person.
- What is the cost of critical illness insurance?
The total cost of the critical illness policy will depend on how much policy you are willing to take. Usually, people who live in Singapore take this with the best maid insurance Singapore. This covers all the expenses that the maid will ever face while she is working there.
- What else does critical illness coverage provide?
Some of the coverage contains the time of the money given to the customer until they are healthy. This indicates that most of the critical illnesses you find will cover you till the time you get well. There is some policy that gives you a lifetime cover, just like a whole life insurance policy. The only difference is that the critical illness will be there till the date that you die on.
The above-mentioned things and reasons tell us that why critical illness insurance is important to take.