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FAQs about critical illness life insurance

Hectic jobs, busy schedules and the uncertainty of life makes people begin to reconsider the types of insurance cover they are carrying and if they should make changes. Most people are familiar with auto, home and life insurance, but what about critical illness life insurance? This personal cover sets up a policy that protects a person when faced with a critical illness. Use these FAQs to answer questions and learn about this type of policy cover for illness.

Crticia illness life insurance information

Q: What is critical illness life insurance (CILI)?

A: This cover is purchased to provide protection to the policy holder in the event they become critically ill. Also referred to as a personal insurance policy, which pays a lump sum to the policy holder. Whereas, most people are familiar with standard life insurance policies that pay to beneficiaries or next of kin. CILI premiums are typically more expensive than life insurance cover.

Q: Is there a difference between income protection insurance and CILI?

A: Yes, CILI pays out when a person survives a critical illness after a certain period of time no matter what occupation or if they are working. Income protection insurance delivers cover when a person becomes seriously ill or has a disability and cannot continue to work.

Q: How does CILI work?

A: A person purchases a CILI policy and pays a premium just like most other insurance policies. However, when a person survives a critical illness, the insured person receives cash back from the insurance company. Many policies pay out if a person survives the illness for 30 days after diagnosis. This extra cash provides the financial help needed for someone who has incurred high medical bills.

Q: What types of illnesses are covered in a CILI policy?

A: The most common illnesses covered are stroke, heart attack and cancer. In recent years paralysis, multiple sclerosis, speech loss, deafness, blindness, organ failure, Parkinson's and Alzheimer's are also covered on some insurance policies.

Consider a CILI Policy

CILI policy holders have to supply the insurance company with the diagnosis and survive through the designated waiting period specified by the policy. Medical receipts or proving a financial burden as a result of the illness are not required. Lump sum benefit payments are tax-free to policy holders. Critical illness life insurance cover may be one worth investigating.

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