Here are a few of the things that you need to know about critical illness insurance:
1. Critical Illness Payouts Are Tax-Free
With critical illness insurance you get a tax-free, lump-sum payment. You can use this payment as you see fit. The lack of red-tape is helpful as it allows you to allocate funds in the manner that will be most effective.
2. It Is Not Disability Insurance
Although some critical illnesses can lead to disability, these are not the same thing. Critical illness provides you with a lump-sum payment for medical costs and other related expenses. Disability insurance provides you with a consistent payment that is meant to replace a portion of your lost income. These are two complimentary benefits, so you don't have to pick one or the other.
3. Everyone Can Benefit From It
It's a common misconception that only the elderly or already infirm have to worry about critical illnesses. Critical illness can strike anyone at any time. You may be young and healthy today but tomorrow is never guaranteed. In some ways, you are at a greater risk when you are young. You haven't yet had the time to develop a robust emergency fund. Not to mention that the stress of starting a family and a career can easily exacerbate illnesses.
4. The Payout Is Independent Of Income
You don't need to lose your income to benefit from critical illness coverage. You will receive the payout even if your illness allows you to remain at work.
5. Every Policy Is Different
Exactly what is covered will vary from policy to policy. In general, you can expect the big three to be covered. Those are:
- Heart disease
Other illnesses that may be covered include:
- Kidney failure
- Organ transplants
- Alzheimer's disease
6. You May Not Receive Payment Right Away
Depending on your policy you may not receive a payout right away. Many have a "survival period" that you must get through before the benefit is paid. Sometimes this is as little as 7 days. With other plans, you may have to wait 30 days or more. You should be aware of this and understand how it could impact your family in the event of a deadly acute illness.
7. Payments Are One Time Only
Remember, your policy will only pay out once. The money you get is yours to spend how you see fit but don't expect another payment next month. This requires you to plan ahead a little lest you end up spending it all right away.
8. Self-Inflicted Illnesses Are Excluded
Most plans will not cover self-inflicted illnesses, even if they are "critical". Here are a few examples of these:
- Alcohol and drug abuse
- HIV/AIDS contracted from sexual activity
- Illegal or criminal acts
- Hazardous sports or activities
At Summerlin-Roberts we can help you further develop your benefits package with voluntary options like critical illness insurance. Please, contact us today to learn more about our employee benefits programs and how they can benefit your business.