While life insurance pays your beneficiaries a sum of money if you die, critical illness insurance pays when you are diagnosed with one of the major illnesses listed in the policy. Death is not a requirement for the benefit to be paid, so it is called a “living benefit.”
Some critical illness insurance policies cover three or four conditions, but others cover around 30. The conditions covered vary between companies and policies. Some of the conditions that critical illness insurance typically covers may include, but are not limited to: stroke, cancer, severe burns, heart attack, major organ failure, Alzheimer’s disease, aortic surgery, loss of limb, aplastic anemia, bacterial meningitis, benign brain tumor, blindness, coma, coronary artery bypass surgery, paralysis, deafness, heart valve replacement, loss of speech, kidney failure, motor neuron disease, loss of independent existence, major organ transplantation, MS, occupational HIV infection and Parkinson’s disease.
Here are some ways you can save money on a critical illness insurance premium:
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Choose a policy that is best for your risk factors: In most cases, the more conditions that are covered, the more expensive the policy will be. If cancer is a risk factor because of family health history, for example, you may be better off with a policy that covers cancer, heart attack, and stroke than a policy that covers 15 or more diseases, most of which may be low risk. you.
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Some policies will exclude certain conditions, such as loss of vision. Carefully weigh the pros and cons of exclusions, but recognize that the less risk you present to an insurer, the lower your premium.
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Did you know that insurers round your age up or down based on when you apply for a policy? If your birthday is near the end of the year, buy your policy in the first six months of the year to take advantage of age rounding.
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Some policies have additional benefits and riders, such as a premium waiver rider or child illness rider. Go without riders that don’t apply to you so you can save money on the premium.
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Do you have mortgage insurance that includes critical illness insurance? Talk to a broker to see if dropping your mortgage insurance makes sense for you. You can have adequate coverage for mortgage risk if you also have individual policies and policies through work. If there’s enough overlap, you can optimize your sources so you can pay less and still get the coverage you need. Bail! Never cancel an insurance policy before you know if you have the correct coverage active first.
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It costs your insurer time and money to process monthly payments. They reward you with lower premiums if you can make an annual balloon payment.
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You can pay to have some retroactive policies, giving you the opportunity to lock in a more advantageous rate and age range. Doing this will cost you more up front, but it can save you money in the long run, especially if you have a long-term policy.
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Choose between term and permanent insurance. A perm is more expensive at first, but it’s very affordable if you buy it when you’re young and in good health. Term insurance renews at a higher rate each year. If you’re looking for long-term protection, choose wisely. You don’t want your term policy to end at an age where renewal is too expensive.
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Your employer’s benefits package may include critical illness insurance. If the amount of coverage provided by your employer makes sense to you, great! You have the coverage you need.
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You can get a guaranteed issue or simplified critical illness policy that allows you to skip the medical exam, but you pay more for that privilege. A fully underwritten policy that includes a medical exam is cheaper. If you’re in good health, skip the no-care policy and make time for a visit from a doctor or nurse.
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Wrap! If you’re in the market for several different types of policies, such as disability and life insurance as well as critical illness insurance, your insurer may have a package discount. Feel free to ask if this is the case.
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Do you want a money back guarantee? Some policies come with, or allow you to purchase, a return of premium rider that pays a full or partial refund of your unused premiums. There is often a charge for this, but the extra money can more than make up for the return of premium years down the road.
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Consider getting a life insurance policy that has an advance of funds for a critical illness. This can be cheaper than buying two separate policies, but understand that an advance affects your life insurance benefit.
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Smokers always pay more, sometimes twice the rates of non-smokers. This is just one more good reason to kick the bad habit!
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Talk to a broker. Unlike an agent that works for a single company, or a bank that only sells its brand of policies, brokers have access to all the products on the market and will compare them for you. Brokers are like matchmakers. They go through all your options and match you with the best one for your needs. Some brokers even get discounts that aren’t available to the public, so they can get you the best rate.
Age is a determining factor in the development of critical illnesses and no one can escape the aging process. That’s why critical illness insurance is just as important as life insurance. We hope these tips will motivate you to talk to a broker and save money on this type of policy. Contact a broker today and get the protection you need.