Critical illness insurance made its first apparition in South Africa in 1983 and was known as dread disease insurance or serious illness insurance. Before 1983, policies having the name cancer policy may have been sold in the USA providing cover for certain types of cancer. These cancer policies may be considered as the foundation of serious illness insurance. Gradually, serious illness insurance went worldwide and nowadays plays an important role in markets such as UK, Canada, East Asia, Israel, etc.
Serious illness insurance may award a tax free lump sum if the insured person is diagnosed with one of the critical illness conditions defined by the policy. Almost all serious illness insurance policies offer cover for cancer, stroke, heart attack, kidney failure and coronary artery bypass surgery. While some insurance companies may cover only seven or eight critical illness conditions, others may offer cover for up to 35 diseases. Serious illness insurance may help someone cope with the financial imbalance especially after diagnosis of a life threatening illness. The financial support may as a matter of fact help to manage a changed lifestyle.
Serious illness insurance was called dread disease insurance long ago in South Africa. The term serious illness insurance being too strong and unsuitable for many markets as well as marketing purposes, made many companies refrain from applying its usage. However, serious illness insurance may be preferably referred as crisis cover, trauma cover or living insurance. The rules which stipulate that serious illness insurance must cover only severe conditions may no longer apply. It may also be used as a means for financial security against numerous critical illness conditions. Insurers therefore tend to provide a wider choice of critical illnesses covered under their serious illness insurance plans. By doing so, they hope to target a wider audience and also to compete effectively in the insurance market.
Moreover, serious illness insurance may be useful to people who have social insurance that does not pay big to cater for a serious illness. A critical illness can imply high costs for treatment purposes. As a matter of fact, serious illness insurance may be mostly wanted in countries where the state social security systems are inadequate. Even if a good health security system exists many people may still want serious illness insurance. The reason may be because everyone wants to get the best medical care and treatments. Thus, serious illness insurance payout will allow them to do that either in a renowned clinic or overseas.
Furthermore, the additional benefits in the form of serious illness insurance may not necessarily mean paying for medical charges. The aftermath of a critical illness may sometimes be considerable. Thanks to serious illness insurance changes can be made to the existing environment to fit the actual health state of a person. Serious illness insurance payout can stabilize financial pressure by settling debts or mortgage.
Serious illness insurance remains one of the top insurance schemes on the market. The benefits obtained from serious illness insurance can be invaluable and certainly a big boost when one is critically ill.
The Association of British Insurers had also published in its Statement of Best Practice for Critical Illness Cover May 2002, the model definitions for additional conditions covered. When you compare policies, you could do so in regards with the core critical illness section. It can be said that these critical illnesses could be more likely to happen. Not all policies cover or contain the same critical illnesses but many of them may cover a critical illness such as heart attack, cancer or stroke.
Here is the model definitions for the additional critical illnesses
Aorta graft surgery Undergoing surgery for such a critical illness, needing excision and surgical replacement of a portion of the diseased aorta with a graft. For this definition, aorta means the thoracic and abdominal aorta but not its branches.
Benign brain tumour A critical illness like brain tumour is a non-malignant tumour in the brain resulting in permanent deficit to the neurological system. Tumours or lesions in the pituitary gland are not covered.
Blindness A critical illness such as blindness may lead to total permanent and irreversible loss of all sight in both eyes.
Coma A state of unconsciousness with no reaction to external stimuli or internal needs, persisting continuously with the use of life support systems for a period of at least 96 hours and resulting in permanent neurological deficit. Coma secondary to alcohol or drug misuse is not covered.
Deafness Deafness is a critical illness that may lead to total permanent and irreversible loss of all hearing in both ears.
Heart valve replacement or repair Undergoing open heart surgery from medical necessity to replace or repair one or more heart valves.
Loss of limbs The permanent physical severance of two or more limbs from above the [elbow/wrist] or [knee/ankle] joint.
Loss of speech Loss of speech is a critical illness that may lead to total permanent and irreversible loss of the ability to speak as a result of physical injury or disease.
Motor neurone disease [before age x] Confirmation by a Consultant Neurologist of a definite diagnosis of a critical illness like Motor Neurone Disease [before age x].
Paralysis / paraplegia Paralysis is a critical illness that may lead to total irreversible loss of muscle function or sensation to the whole of any two limbs as a result of injury or disease. The critical illness must be permanent and supported by appropriate neurological evidence.
Parkinson's disease [before age x] A critical illness such as Parkinson's disease needs confirmation by a Consultant Neurologist of a definite diagnosis of Parkinson's Disease [before age x]. Parkinson's Disease secondary to alcohol or drug misuse is not covered.
Terminal illness A critical illness like terminal illness is an advanced or rapidly progressing incurable illness where, in the opinion of an attending Consultant and our Chief Medical Officer, the life expectancy is no greater than 12 months. [AIDS is specifically excluded and not covered under this definition.]
Third degree burns A critical illness like third degree burns covering at least 20% of the body surface area.
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