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Critical illness insurance or critical illness cover is an insurance product, where the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed in the insurance policy.
Critical illness life insurance is a life insurance policy that pays for the survival (survives 30 days after diagnosis) of critical illnesses.
Typically critical illness life insurance will pay out critical illness coverage on the three most common forms of critical illness, heart attack, stroke and cancer. All critical illness life insurance pays out on these three and is known as basic critical illness coverage. Comprehensive critical illness coverage also covers a much more extensive list of diseases or conditions.
Critical illness life insurance is usually paid in a lump sum upon receipt of the required forms filled out by a qualified physician. There are some plans that will pay the beneficiary in other, prearranged payment plans.
Many insurance companies also offer medical reimbursement plans and medical expense reimbursement plans. This type of insurance is largely available through employment insurance packages and the contribution of the employee will dictate the amount that is available for reimbursement. It is the norm for the employer to match the employee's contribution to this type of plan up to a preset ceiling. The employee is reimbursed for time lost due to hospitalization or home recuperation for non-critical illnesses in the medical reimbursement plans. The medical expense reimbursement plans pay the employee for medical expenses such as cold medicine and acne preparations. However, medical expense reimbursement plans will not pay for products purchased for the general contribution to wellness such as toothpaste or vitamins.