Why it's important to consider critical illness cover

Written on the 2 August 2018 by Arrow

 

Have you considered Critical Illness cover? It's a way of providing choices in the event that you suffer a serious or life-threatening illness, such as cancer, heart disease or stroke.

What is Critical Illness cover?
Critical Illness cover provides a lump sum payment if you're diagnosed with a life-changing or terminal disease.i It is then up to you to choose how you use this payment to cover medical expenses, the cost of being unable to work, or to pay your household bills.

Why is it important?
When you're living life to the full, it's natural not to think about the possibility of getting sick. But it's important not to underestimate the prevalence of life-changing illnesses such as cancer, heart disease or stroke.

Recovering from a serious illness is stressful enough, without the added pressure of worrying about the impact on your finances and future plans.

What many people don't anticipate is that while health insurance and Medicare will pay for some of your medical bills, as Finder explainsii, they don't cover all of the costs associated with ongoing treatment.

Critical Illness Cover provides the comfort of knowing you're protected now. And, if something were to happen, the financial freedom to make choices about your treatment and recovery, leaving you to focus on what's most important, your health.

What about Medicare and private health insurance?
As mentioned, many Australians believe Medicare and private health insurance cover all medical bills and ongoing treatment associated with a serious illness.

Although they are likely to pay for initial hospital treatment, you can be responsible for any gap payments and certain ongoing expenses including rehabilitation, nursing care, house or car modifications and therapy, as Finder reports.ii These costs can run into the hundreds of thousands of dollars according to eHealthiii, which is why it makes sense to investigate Critical Illness cover.

What does Critical Illness cover?
Most Critical Illness claims are for cancer, heart disease or stroke according to LifeInsuranceDirect.iv However, policies can cover a number of other illnesses as well, including heart conditions, neurological conditions such as Alzheimer's disease, multiple sclerosis and dementia, organ disorders, blood disorders, and permanent conditions such as blindness or losing a limb. Should you need it, some policies provide cover for your children as well.

Who is eligible?
There are differences between the policies available, which is why it's important to speak to an adviser about the option that best suits your specific needs.

What's covered by Income Protection insurance?
Both Critical Illness and Income Protection cover you if you suffer a serious illness or disability. However, there are differences in the way they work:
Critical Illness cover isn't dependent on whether you can work or not. It provides you with a pre-agreed, lump sum payout on diagnosis, even if you can continue working.

Income Protection is a monthly taxable benefit that normally has a waiting period, and only pays out when you're unable to work.
Structuring your insurance plan
Taking into consideration your unique circumstances, we can help you structure Critical Illness as a stand-alone policy or link it to your life insurance.

Critical illness cover provides peace of mind so you can enjoy life now, while having choices and options should something happen in the future.

i https://www.moneysmart.gov.au/insurance/life-insurance/trauma-cover

ii https://www.finder.com.au/trauma-vs-health-insurance

iii https://resources.ehealthinsurance.com/critical-illness/critical-illness-insurance-worth-cost

iv https://www.lifeinsurancedirect.com.au/trauma-insurance/guides/claims-statistics/