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Options & Riders
Three Basic Types
of Critical Illness Insurance |
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Lump
Sum Payment: This is the traditional
type of critical illness insurance where one typically
gets a lump sum payment 30 days after the diagnosis
of a covered illness. These funds can then
be used to pay for treatment outside the country
or any other purpose you choose |
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Medical
Treatment Only: One company now offers
$1 million to cover the cost of medical
treatment anywhere in the world. Once a
critical illness is diagnosed, you put in touch
with "Best Doctors" and they will provide
you and your doctor with their recommendation
on what medical treatment would be best for your
illness wherever that is offered in the world.
The policy will pay for the "best doctors"
opinion and then up to $1million for this treatment
wherever in the world it is offered. There
is also an allowance for family travel and expenses.
If you choose to stay in Canada for the treatment,
it pays out $25.000.
The premiums are very reasonable
(family of four with parents in their early 40's)
would be about $125 to $150 per month. However,
there are some limitations to this policy and
you need to review it carefully before deciding
which would be best. I can help you with
this review. |
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Lump
Sum Payment and $1 million for Medical Treatment:
One company now offers the traditional Critical
Illness coverage at competitive rates plus a rider
you can purchase which covers the $1 million if
you and the doctors feel you would benefit by going
outside the country for treatment. |
Options and Riders |
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Return
of Premium: Upon death, most policies will return
all premiums to your beneficiary as part of the
policy - no additional charge |
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Pay
Back of Premium Rider: Many policies offer this
option on the policies that have a level premium
to age 65, 70 or 75. For an extra premium, if you
do not have a claim, you will get all your premiums
back at the policy ending age 65, 70 or 75,
depending on the insurance company and policy purchased. |
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Children's
Rider:
Coverage
is offered to children ages 2-17 and, in some cases
for children that you have in the future starting
at birth. It will pay a lump sum, usually $25,000
on the diagnosis of a critical illness and the one
premium frequently covers all children in the family. |
Basic Policy Time Frames
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Ten Year Renewable Term |
Similar to ten year renewable term life insurance. Rates are guaranteed
in the policy but they do go up every ten years until the policy ends at age 65, 70 or 75. Generally useful if
the need is limited to 15 years or less. One use is to provide cash to complete retirement plan should the insured
become ill. |
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Level to Age 65,70,75 |
The policy lasts to the age given and the
premiums remain the same throughout this time period.
This is one are of concern. Clearly the greatest likelihood
of claim is between age 65 and 75 so the longer term
policies will cost a little more but could be worth
the extra cost. This is an important area |
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Permanent or To Age 100 |
These ones are designed to last a life time so the chances of collecting
are high as so is the premium. Also, be careful that at age 100 the policy is still in place. While this has some
uses, if money is short, one should look at getting the coverage to age 75. |
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Professional Independent Insurance Advice for Canadians.
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