Types of Coverages of Critical Illness Insurance

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Generally two types of critical illness insurance are available:

1. Basic coverage:

Covers a limited number of conditions such as cancer, heart attack and stroke.

2. Comprehensive coverage:

Covers all of the conditions in the basic coverage, plus additional conditions. The actual number and types of conditions covered can differ between insurers.

Within these two plans, most companies offer 3 types of plans: 10 year renewable , level premium to age 75 and permanent plan.

1. 10 year Renewable Plan:

Rates are guaranteed in the policy but they do increase every 10 years until the policy ends, usually at age 65, 70 or 75. One common use is to provide cash to complete retirement plans should the insured become ill.

2. Level to Age 60, 65 or 70 or to age 75

Premium remain unchanged throughout the policy period,Clearly there is a greater likelihood of a covered illness occurring between age 65 and 75 so the longer-term policies will cost a little more. For levels premium to age 75, the premiums are reasonable in relation to the 10-year renewable plans, and significantly lower than the permanent plans. The premiums payable for lifetime coverage are significantly higher than for plans to age 75.

3. Permanent Plan
These policy covers the life time of the insuredAs the chances of an insured claim occurring are high, the premium will be higher. Also, some policies terminate coverage at age 100.

In order To qualify as a non-smoker, the insured must have abstained from the use of tobacco products for the 12 months preceding the application. When the insured has purchased a policy at smoker rates and subsequently stops smoking, most insurers will amend the policy to reflect the lower non-smoker rate after having received satisfactory evidence of the good health and insurability of the insured.

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