Critical Illness Insurance

Definition of "Critical illness insurance"

Rick Schweikert real estate agent

Written by

Rick Schweikertelite badge icon

Tropical Realty

Insurance policy that pays a face amount/ lump sum if the insured is diagnosed with a specified critical illness. This sum is paid directly to the insured regardless of any other sources of income (job-related and non-job-related), expenses incurred (medical and nonmedical), and any other factors. Generally, critical illnesses include stroke, heart attack, cancer that is life threatening, paralysis, deafness, organ transplant requirement, blindness, and kidney failure. Some policies pay a percentage of the face amount, for example 15 to 30%, if a less serious illness occurs or medical procedure such as a coronary bypass must be performed. The illness does not have to result in the disability of the insured (total or partial); the insured still receives the face amount payment. This type of insurance can be purchased as a separate policy or as a rider to a LIFE INSURANCE or DISABILITY INCOME policy. The face amount is not paid if the insured dies within 30 days of being diagnosed with the covered illness and there is usually a WAITING PERIOD before the coverage is in force. This coverage may be purchased on both a personal and business basis.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Type of disability income policy used to provide funds for the ongoing monthly business expenses (such as employee salaries, utility charges, rent, and equipment payment due) necessary to ...

Independent, nonprofit, membership hospital plan. Benefits provided include coverage for hospitalization expenses subject to certain restrictions: for example, semiprivate room only. A ...

Insurance programs that combine finite risk insurance, reinsurance, and traditional insurance as an alternative to self insurance. These programs are long-term in duration. The objective is ...

Combination of two basic plans: accumulating units of paid-up permanent life insurance, and decreasing units of group term life insurance. The premium paid each month consists of the (a) ...

Organization of insurance broker and agent associations that includes the Independent Insurance Agents of America, National Association of Professional Insurance Agents, National ...

Vehicle through which the federal estate tax credit is protected from estate tax payment. The procedure is to leave the federal estate tax credit to the shelter trust with the trust ...

Income supplement program under Social Security to provide a minimum monthly income to aged, blind, and disabled persons. The SSI payments, which were introduced in January 1974, make up ...

Duration of a policy. Property and casualty coverages are usually written for one year, although a personal automobile policy can be for six months. Life insurance can be written on a term ...

Liability limit on a fidelity bond or surety bond. A fixed-penalty bond is one with a fixed liability limit that the surety company will pay in the event of nonperformance. ...

Popular Insurance Questions