Do I need life insurance or critical illness insurance? If you are still confused about what to choose or need, this guide is for you.
To begin with, life insurance and critical illness insurance cover two different things. Life insurance helps your loved ones and families if you pass away. While the critical illness insurance policy covers you if you are diagnosed with a serious illness.
Furthermore, critical illness insurance, also known as catastrophic illness insurance, will help you if you have a big health emergency. For instance, a stroke, cancer, or a heart attack.
However, you might not necessarily need this insurance if you are lucky. So, while you focus on your health, life insurance will cover your finances.
What’s more, both insurance policies are usually bought together. If you would like to buy some insurance but are unsure about what product to choose or select from, understanding how both policies work and what they cover is a stepping stone to finding which one to choose. So, keep reading.
What Are Life Insurance And Critical Illness Insurance?
Life insurance is an insurance category that exists as a contract between the insurer and the insurance policyholder. So, the agreement will be between these two parties.
For this type of insurance, the insurer will promise to pay a selected amount of money or beneficiary upon the death of the person purchasing the insurance.
Critical illness insurance is a type of insurance policy that covers your finances if you are ever diagnosed with a condition.
In other words, if you are diagnosed with a disability or particular illness, your insurer will give you money to cover the financial aspect of any critical event or incident.
What Does Life Insurance Cover?
Here are the typical coverage options life insurance quotes or policies cover if you purchase any from any company:
- Living expenses, for instance, groceries.
- Burial or funeral costs.
- Medical expenses and long-term care.
- College tuition and education.
- Monthly expenses and bills.
- Mortgage payments.
So, if you pass on due to the influence of alcohol, a natural disaster, participation in harmful activity, or a pre-existing health condition, your insurance will cover it.
What Does Critical Illness Insurance Cover?
There are certain things and illnesses that critical illness insurance covers. They include:
- Diagnostic test costs.
- Treatment costs.
- Financial liabilities.
- Nursing charges.
- Doctors’ fees.
- cost of medical aids and medicine.
- Your family’s monthly expenses.
Some critical illnesses that can be covered with this type of insurance include:
- Parkinson’s disease.
- Traumatic head injury.
- Major organ transplant.
- Heart attack.
- Multiple sclerosis.
- and Alzheimer’s disease.
However, some insurance companies offer to cover permanent disabilities due to illness or injury.
What Is The Difference Between Life Insurance And Critical Illness Insurance?
The difference between life insurance and critical illness insurance is very obvious. Accordingly, life insurance helps the policyholder pay the expenses when they pass on.
While critical illness insurance will only cover the benefits when you fall sick or are diagnosed with any terminal disease.
But the main difference between these two types of insurance is that life insurance pays out when you die, while critical illness insurance pays out when you are critically sick.
However, life insurance and critical illness insurance have their features and benefits. But it depends on the type of insurance you choose.
Additionally, you can choose how much you want to cover and how long you want to be protected.
Do I Need Life Insurance Or Critical Illness Insurance?
Choosing whether you need life insurance or critical illness insurance depends on what you want and what you would like to cover. So, this is where comparison comes in.
However, if you do research and find out what coverage options and benefits you want, you will be able to find out what type of policy you need.
For instance, if you purchase a life insurance quote, funeral costs, mortgage payments, and education fees will be paid with ease. Then your family will enjoy financial independence and stability, even after you are gone.
Whereas, critical illness insurance will help you pay off your debts, cover medical care, and be financially independent.
A lot of people ask, Can I take out both life insurance and critical illness insurance? Well, here is what you need to know: Yes, both insurance policies can be taken out or purchased together.
Besides, these two insurance policies become one product that will pay you if you fall sick or die. Moreover, a lot of insurance companies allow customers to purchase these two types of insurance at the same time.
How Do You Choose Between Both Insurance Policies?
Now that you have learned about both policies and what they cover, you will find it very easy to choose. Here is a tip. Choosing between these insurance policies depends on what you want coverage for.
So, if you make a list of coverage options and search through companies’ coverage options, you will be able to find the type of insurance you need. However, do not forget to compare the rates before choosing.