Critical illness insurance helps protect you financially in the case of a serious or debilitating illness. It’s an important insurance product, one that could benefit almost anyone. It is particularly helpful for those who are wage-earners supporting families.
However, it’s not a very well-understood form of insurance, and there are a lot of misconceptions out there about what critical illness insurance covers, and how it works. So, we wanted to briefly address some of the most common myths we hear.
Four Misconceptions About Critical Illness Insurance
“Critical illness insurance and disability insurance are the same thing.”
No, these are two different types of insurance policies, although they do have some overlap, so it’s understandable why people might confuse them.
Disability insurance is an income replacement. It pays you on a monthly basis, compensating for the wages lost due to a disability. Critical illness insurance, on the other hand, is specifically intended to pay for medical bills. It pays out as a lump sum to relieve any financial burdens from treatment.
“Critical illness insurance is just another type of life insurance.”
This one is also false, and the difference is extremely clear-cut: Life insurance pays out when the policyholder dies, whereas critical illness insurance helps the policyholder while alive by paying their medical bills. These two types of insurance have very little in common.
“Critical illness insurance will cover any critical medical emergency.”
This is not the case. Like most types of insurance, you’re insuring against very specific illnesses and other medical emergencies. You can choose what coverage you need to help keep the monthly premiums within your budget. For example, someone might elect a plan with more comprehensive coverage than another plan.
“There are limits on what you can spend the payout on.”
While critical illness insurance is intended to pay medical bills, there are no strings attached. It disburses as a lump sum, and it is entirely up to you how to best spend the money. For example, some people use the payout to pay off their mortgage to guarantee they’ll always have their home while they recover.
Desjardins critical illness insurance can financially protect you in times of great need! Click here to request a free quote.