Should I get critical illness insurance?

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Should I get critical illness insurance?

Should I get critical illness insurance?


We all know someone who has fallen ill, and yet there is the common belief that “it couldn’t happen to me.” Taking risks is fun – some people go bungee jumping, others gamble on occasion, these are moments of excitement that bring joy.

Chancing a loss of income over an unexpected illness is joyless. It’s a risk that we all face and it is… less than exciting. So the answer is a simple one – ensure that if worse comes to worst, your coverage will allow you to recover without the stress of paying out of pocket.

Does that mean you need critical illness insurance? Not necessarily. That said, if there are gaps in your coverage that could lead to you missing your mark for retirement, then it certainly will be. Let’s run through the basics.

Common Questions About Critical Illness Insurance

What is critical illness insurance?

Simply put, it is an insurance plan that provides the plan holder with money should they fall critically ill at the cost of a monthly premium. If you’re lucky, you’ll never have to use it. If you do fall ill, then you won’t need to run to your relatives to cover your monthly costs.

What does critical illness insurance cover?

Plans vary, but they are meant to cover medical emergencies that are costly to treat and take a long time (if ever) to recover from. These usually include heart attacks, strokes, cancer, organ transplants, multiple sclerosis, and more – you know, all the usual fun stuff.

How much does it cost?

The cost of critical illness insurance is entirely dependent on the potential payout for the policyholder and the policyholders current age and health at the time of underwriting. That means a 40-year old will pay more than a 20-year old, and a person who has had cancer will pay more than those who have not.

Depending on your financial needs, critical illness insurance usually has a low cost to entry while offering a substantial amount of compensation should a major health condition arise.

Return of premium on critical illness insurance

If you are turned off by the idea of paying into an insurance plan that may not payout, you can always add a “return of premium” rider that will pay you back a significant portion of your premiums if unused.

But it’s generally a waste of money.

When you add “return of premium” to your policy, you must continue paying into the policy until its term ends. That term is defined when you begin your policy.

Let’s say you have a term to 100 policy – well, are you willing to pay your premium benefits at age 70 when it reaches 10 times the amount it was at the beginning? Your $25 a month coverage becomes $250 a month, and getting your premiums back becomes less and less likely.

Should you buy critical illness insurance?

Working with a broker, you will find whether you have a demonstrated need for critical illness insurance. Generally speaking, critical illness and disability insurance is a protection for people who are younger and reasonably healthy. It is coverage to ensure that should something go wrong, you can get back on your feet and still lead a fulfilling life. If your existing coverage does not ensure that path for yourself or your family, then you should absolutely speak with a broker to plan it out.

Get in touch with Tyson to ensure your personal health doesn’t affect your financial health now and in the future.