Serious illness insurance- also sometimes known as critical illness insurance- covers the gap between life insurance, which pays upon death, and disability insurance which will cover lost wages due to an accident or sickness. Serious illness insurance pays benefit upon diagnosis of a serious illness such as cancer, heart disease or stroke.
Your insurance will probably be designed to pay a lump sum within a period of the diagnosis, usually 30 days. This is in contrast to disability insurance which can take about 3 months before it starts to pay money, and in fact this first period in an illness is a crucial time, when money worries are only going to make things worse.
Because this insurance pays a lump sum, there is no specification what the money is to be used for. This allows you to cover short term healthcare costs, or any living expenses that you need to have money for. It makes sure that you have money on hand to bridge any major expenditure, and takes away the stress of financial issues at a time when extra stress can really affect your prospects of recovery.
It is important to look at different policies, as different companies will have different conditions and benefits. You should find the policy that will suit you best, allowing other insurance cover to function well but making sure that you do not have to worry about money at this crucial time.
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