Critical illness insurance can take many forms in terms of coverage. You can choose to have a policy that covers you for the rest of your life, or you can decide how long you would like the coverage to last. You might find that you can only afford to give yourself or your loved ones coverage for so long, or that after a certain period of time you do not believe you will worry about illness as much. In any event, the length of coverage is up to you.
Upon diagnosis, your claim will be evaluated and a single tax-free lump sum will be awarded to you. Usually the payout comes 28 after diagnosis. If death occurs before the 28 th day, the policy will not pay out. The policy can only pay out to you and not to family members, and you must still be living to receive the sum.
If your coverage is only to last for a specified amount of time, there are no guarantees of money back. If, at the end of your term you haven’t contracted the illness for which the insurance was purchased, there is no payout and the plan terminates. Some companies allow you to extend coverage after the predetermined period with additional payment.
Read this interesting Critical Illness Insurance Coverage article from the Financial Times.
