While considering family protection, many people go for insurance options such as critical illness and life insurance to ensure long-term financial security.
The fact is when it comes to your family’s protection and wellbeing, you need a long-term financial plan. Critical illness and life insurance are part of it.
However, many people do not know what are the main differences between critical illness and life insurance? How insurance can protect you against the risks? Let’s dive deep and discover more.
Is Life Insurance The Same As Critical Illness Cover?
Life Insurance refers to the recovery of financial loss when the breadwinner dies, as shown by the word “Life”. Even if the person is at the death’s bed and doctors have given the warning signal, it DOES NOT make the breadwinner’s family eligible for life insurance.
On the other hand, Critical Illness cover makes you eligible for financial assistance when the income provider is being diagnosed with a critical illness, even if there is a probability that he would recover.
Also read: what is critical illness insurance and how it works?
Thus, both of these financial assistance schemes serve the main purpose. Both of them provide peace of mind to the income producers by protecting against financial risks. Along with various similarities, there are also worth noting differences as well. So before making a comprehensive and practical financial plan, review the insurance policy terms and proceed confidently.
A Comprehensive Overview Of Differences
| Life Insurance | Critical Illness Cover | |
| The Use of Funds | Beneficiaries do not have full control over the usage. The insured has pre-decided everything with the help of an insurance company, even the amount of money each beneficiary can take. | The insured directs the way to use the money and how much should be spent on his treatment, or family members receive the amount for day-to-day expenses. |
| Ideal Time To Buy The Product | Some providers offer life insurance plans after the 60s, however, if you go for costly premium plans, you can get life insurance even earlier. | You can go for critical illness whenever it is diagnosed in your body. So if you are suffering from critical illness, no need to wait for the age of 60. |
| Basis Of Payment | You will receive the payment upon death, no matter what is the cause of death. ( However, there are some exceptions to this rule in case of suicide or murder). | Whenever the disease is diagnosed, you become eligible for critical illness. |
| Costs covered | It covers various primary costs such as:
Recovery of the lost income of the breadwinner for some specific period.All the costs from the death’s bed to the burial expenses, including the hospital dues. Payment of any high-ticket debt.Allocation of a specific percentage for the selective beneficiaries. |
The primary purpose of critical illness cover includes:
To clear the dues and expenses of the insured’s treatment and recovery. To use the money as the income stream due to the inability of family supporters to generate income. Covering any high-ticket debt that is crucial to pay to avoid future financial problems and pressures. |
| Claim Requirements | They are quite simple as the death’s cause is often obvious, however, in case of direct involvement in the criminal activity, the claim will be denied. | You will be allowed to receive the money after going through your financial needs, and the treatment costs. You need to be very careful while making a claim. |
| When You Are Ineligible | You cannot avail of life insurance if you do not have a family to support, or you are a single and independent person. However, if you have a family, you can apply for it after the age of 60 as well. | It is not a big thing to fall prey to various diseases such as Parkinson’s Disease after the age of 60. So you are not eligible for critical insurance after you crossed 60. |
Now you can understand that there is a considerable difference in both terms, and thus have different financial benefits.
Can I Get Life Insurance & Critical Illness Cover At The Same Time?
Want to get total peace of mind and receive both kinds of financial safety options? Here is good news for you. It is quite possible to get both of them at the same time.
Hence, no need to be worried about combining both options as long as you are qualified. Thus, get ready for a more comprehensive plan and secure your family from financial issues.
Pros and Cons of Life Insurance And Critical Illness Insurance
| Life Insurance | Critical Illness | |
| Things You will like | The requirement claims are simple and can be fulfilled easily. Whatever your age is, you can apply for life insurance without any age restrictions. Premiums are lower | It is a living benefit, and you will be lucky enough to see how your family is quite safe from the financial crisis even if you are not able to earn. You can get a large amount depending on the treatment expenses. |
| Things You may dislike | No matter how much you are struggling for your family, financial benefits associated with life insurance is something that you will never observe in your life. | You need to fulfill the requirements and must be eligible for the critical illness cover. |
Choose Your Option Before You Die Or Diagnosed For Serious Illness
Childcare duties, parents’ care, and fulfilling your spouse’s responsibilities is something that keeps you motivated to earn. However, there are various occasions in life that can stop this cycle and can leave your family without any financial safety.
Also read: Factors to Consider before buying a Critical Illness Cover
So, all of us want to save our near and dear ones from the huge financial impact and tragedy strikes. Otherwise, they can cause long-term financial problems. Opting for insurance can save you from future issues that may arise due to an income producer’s death or grave illnesses.
The Verdict
If you have budget constraints or want to know more about the subject, we recommend speaking to your insurance expert. In this way, you can find out whether combining both options is a better deal for you or not.
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