These days, more and more diseases are finding cure and the chances are more that people are accurately diagnosed and treated fast.  However, there is a big risk of life-threatening diseases and critical illnesses that are less likely to be successfully treated. What to do when the bread-earner of a family is diagnosed with cancer, or multiple sclerosis, or something as severe as Alzheimer? Are they going to sell all of their investments and savings, or do they need to sell their family homes to meet the prolonged medical needs - These are the baffling questions that come to the core. Critical illness insurance makes some sense, in this crisis situation. Insurance providers would pay out a lump sum tax-free benefit, if the policy-holder is diagnosed with a critical illness, listed on the insurance policy.

Severity of Illness Matters

The term critical illness insurance was formerly associated with ‘dread diseases’, but with the advances in medical sciences, medical conditions related to some of this rare and life-threatening diseases are not anymore treated as terminal. In that case, some insurers are found to be paying out on policies that are not life-threatening. That way, to reduce the number of wrong claims, and playing down the cost of premiums, the need for redefining critical illnesses becomes more significant. 

Coverage for Critical Illnesses

You will find most insurance providers combine life insurance and critical illness cover, paying out for death or critical illness – whichever occurs first. The more restricted entry of illnesses in the policy list, the less premium the policyholder has to pay. A typical critical illness insurance coverage may include illnesses like - heart attacks, strokes, organ transplants, cancer, blindness, Alzheimer's, multiple sclerosis, kidney failure, paralysis, and bypass surgery. Some policies cover permanent disabilities, or loss of limbs.

However, there are certain inclusion rules – they’re not going to cover Alzheimer, if diagnosed after 60. Although seven out of ten people are likely to suffer from critical illness before they reach 65, not all of them get coverage after reaching a certain age. Self-inflicted injuries, drug abuses, hazardous hobbies are not listed for coverage. Even certain types of cancers are subjected to the insurer's own medical examination and assessment of the condition or illness.

Payment Criteria and Premiums

Critical illness insurance policies pay only when the critically ill survive at least 28 days, from the day of being diagnosed, not on diagnosis. In case he/ she die within that period, nothing is reimbursed.

The insured is likely to pay premiums based on age, sex, employment types, policy chosen, smoking habits, and the amount you want the policy to pay out.

While you still have a choice, it would be wise to think of such a critical illness insurance coverage. You can find number of reputed brokers on the Internet, and the best thing about this insurance is that, your other financial obligations like electricity bills or mortgage payments will be financed by these insurers, if your claim fits into the policy definitions.