Those of you who have followed me for a while may know — that I’ve worked in a Fortune 500 insurance company for some years. And I realised that most people don’t really know how to pick the right insurance product — the majority listen to the salesperson (who may not have our best interest at heart) and we don’t have much time to research in depth about insurance policy and comparisons.
So I’ve created this series of “Insurance Second Opinion” as a quick, but rather comprehensive guide for those of you who want to know Insurance 101 so we don’t need to be tricked by sales and can buy the right insurance product.
Today, I share about illness insurance. As always, if you wish to get a second opinion on your insurance, IG @ Simplifiedbusinesscoach
Illness insurance, or critical illness insurance, is a type of insurance policy that provides a lump sum tax-free payment to the policyholder upon diagnosis of a critical medical condition.
It is a valuable tool that can provide policyholders with financial security in the event of an unexpected medical emergency. Selecting the right illness insurance policy can be overwhelming due to the different types available in the market. This article would guide readers on how to pick illness insurance, the different types of illness insurance policies, their differences, and how to make an informed decision.
How to Pick Illness Insurance
When choosing an illness insurance policy, there are several factors that policyholders should consider. These factors would help policyholders select the right policy accordingly. The factors to consider include:
1. Coverage: Ensure that the insurance policy covers the policyholder’s medical condition. Some insurance policies may come with excluded medical conditions or require the policyholder to pay for additional coverage.
2. Cost: Determine how much the policy cost and whether it is affordable in the short and long term.
3. Benefit amounts: Consider the lump sum payout for the illness and determine whether it is sufficient.
4. The policy company’s reputation: Is the insurance company reputable, with a history of paying out claims? Check the financial ratings of the company to determine its financial strength and stability.
5. The policy’s terms and conditions: Review the policy’s terms and conditions, including the exclusions, limitations, and exceptions.
Types of Illness Insurance
1. Standalone Illness Insurance: This type of illness insurance policy only covers critical illnesses and is known as a “first diagnosis” policy. It is the simplest and most affordable insurance policy type.
2. Combined Illness Insurance: This insurance policy combines the benefits of critical illness insurance and life insurance. In the event of a terminal illness diagnosis, the policyholder can receive a portion of the lump sum benefit while living, while the remainder goes to their beneficiaries after death.
3. Group Illness Insurance: Group illness insurance is coverage offered to employees as an employee benefit by a company. It helps employees receive treatment quickly, be reimbursed for treatment costs quickly, and provides financial security in the event of severe illness.
4. Disease-Specific Illness Insurance: This policy type covers only specific illnesses, such as cancer, stroke, or heart disease.
Tricks of Picking the Right Insurance
1. Policyholders should review their medical history to determine the medical conditions they may be prone to.
2. Consider their current and future medical expenses.
3. Obtain quotes from different insurance companies to compare the coverage and costs.
4. Speak to a financial advisor or insurance professional to determine a suitable insurance policy.
5. Review the policy details carefully before signing up.
Possible Purposes of Having Illness Insurance
1. Provides financial aid for medical expenses.
2. Offers financial security for critical illness.
3. Monetary support in the event of a medical emergency.
4. Can be used to supplement loss of income.
People who Must Have Illness Insurance
Anyone can benefit from illness insurance coverage, but some categories of people who must have this insurance include:
1. Self-employed individuals without company-provided health coverage.
2. Persons with a medical family history or predisposed to specific medical conditions.
3. Persons with high medical expenses.
4. Individuals without sufficient savings to cover unexpected medical emergencies.
People Who don’t Need Illness Insurance
1. Persons who have enough savings to cover medical expenses.
2. Individuals with comprehensive health insurance that covers critical illnesses.
3. Individuals who are covered by a union that offers medical coverage.
4. Employees who are entitled to compensation or paid sick leave.
Questions to Ask Insurance Agents or Brokers When Buying Illness Insurance
1. What medical conditions are covered by this insurance policy?
2. What is the lump sum benefit payout upon diagnosis and how long must the policyholder wait to receive that payout?
3. What is the cost of the insurance policy, and are there any additional fees?
4. Are there any medical examinations or tests required to be eligible to receive the benefit payout?
5. What are the policy exclusions, limitations, and exceptions?
What to Pay Attention to When Deciding Whether to Have Illness Insurance?
1. Determine the policy amount that would be sufficient for medical expenses.
2. The policy should be affordable in both the short and long term.
3. Ensure that the insurance company is reputable, financially stable, and has a history of paying out claims.
4. Review the policy details carefully, including the exclusions, limitations, and exceptions.
Conclusion
Illness insurance is a valuable financial tool that provides financial security in the event of a severe medical condition or emergency. To choose the right policy, policyholders must consider various factors such as coverage, cost, benefits, and terms and conditions. Illness insurance policy types include standalone, combined, group, and disease-specific policies, and policyholders must choose the policy that suits their unique needs. Before purchasing illness insurance, ask relevant questions to the insurance agents or brokers and review the policy details carefully. With this knowledge, policyholders can make an informed decision and choose the right illness insurance policy.
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