Crisis Recovery Insurance pays you an agreed lump sum if you are diagnosed with one or more serious medical illnesses. As a mother I realise that the impact of such a serious illness is as much about the children as it is about me. Not only do I need to recover but the children need to be cared for during my recovery.
So what are the most common serious medical illnesses that crisis insurance can pay on? Statistically they are a heart attack, stroke, cancer and open heart surgery. Unfortunately they happen, often with a huge impact on your family.
Have you ever sat down and worked out what it would cost to provide for the recovery and the children? It is quite significant. Even with full hospital cover you will require ongoing medical treatment, you may need to modify your house and you will need help with the household, especially the children. Unless you have generous family and friends, these costs probably start at $50,000 and then get worse. It really depends on what you suffer and how long it takes to recover. And your life may change forever.
There is a number of qualifying requirements and options available when it comes to crisis recovery insurance. Generally pre-existing conditions are excluded from the specified illnesses. Crisis insurance options can include the possibility of structuring a policy so that it minimises the risk for multiple lifetime medical illnesses or alternatively the policy can be in place as a once off event.
Every crisis recovery policy will specify the illnesses that are covered and may differ from one policy to the next. You need to speak with an insurance adviser to work out which would be best for your needs and budget. Just remember that some policies pay on diagnosis and others have a 90 day waiting period.
You can take out stand alone crisis insurance or have it linked to term life insurance. A linked policy simply means that when paid it reduces the sum insured. For example, a $500,000 term life policy linked to a $200,000 crisis recovery policy (what they call a rider) means if you make a crisis recovery claim it would reduce the term life cover from $500,000 to $300,000. You get some cost savings with this type of approach. However, if the crisis recovery policy it is a stand alone policy then there is no impact on your term life policy. It can of course stand alone without any other personal risk insurance policies (i.e. life, income, TPD, etc.).
As crisis recovery insurance is a lump sum paid on diagnosis, you can cover many more of your future life costs. Consider a lifestyle change, paying out your mortgage and the children's education. Your objective should be to ensure your future is catered for. Working out exactly what this means for you is where having a good insurance adviser can help.
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