Illness Cover

Critical illness cover

Critical illness cover pays out a lump sum if the insured person is diagnosed with a critical illness. In many cases, this money is used to cover medical costs, but the payout can also be used for anything from paying off your home loan to taking care of your family’s needs while you recover from an illness.

Critical illnesses covered differ among insurers, but some common critical illnesses include heart attack, cancer and stroke. Critical illness cover can either be bought as a standalone product or added as a rider to a life insurance policy.

Premiums are typically lower than for life insurance because there are fewer risks involved – payouts are only made if the insured person suffers one of the specified medical conditions covered in their policy. For this reason, many people opt to take critical illness cover when they already have life insurance (which pays out upon death), so they’re financially protected against all eventualities.

Permanent disability cover

What is permanent disability cover?

Permanent disability cover, which is sometimes called “loss of limb” insurance, is limited in scope to one specific event.

It pays out a lump sum if you become permanently disabled (defined by the insurance company), as long as it happens after the waiting period has lapsed. The waiting period varies between 3 and 6 months. For example: my insurer will pay out if I am permanently disabled after six months from sign up, but will not pay out if I am permanently disabled before that.

Permanent disability cover is usually pretty cheap because it is so limited in scope.

Terminal illness cover

If you’re not covered yet, don’t wait to get cover. There are many advantages to having cover as soon as possible:

• You’ll have peace of mind knowing that if something should happen to you, your family and close friends will be taken care of.
• Your loved ones won’t have to think about how the bills would be paid and what the funeral arrangements will cost.
• Your employer is bound by law to see that your death benefits are paid.

Own occupation cover

Own occupation cover is the most expensive type of critical illness cover, but it’s also the most comprehensive. It will pay out if you can’t work in your chosen profession again, even if you are still able to work in another profession. For example, if you are unable to write software code due to a severe neurological condition that prevents you from using a keyboard or mouse, own occupation cover would pay out. However, if you were made redundant and could no longer work as a software developer but could instead become an accountant or financial advisor without further training, then own occupation critical illness cover may not be applicable.

Day-one cover

For those who want to be absolutely sure they’re covered, day-one cover is the best option.

It pays out a lump sum as soon as you are diagnosed with a critical illness, meaning you don’t need to wait months or years for your claim to be processed.

However, this all comes at a cost. Day-one cover is more expensive than low-cost policies and more comprehensive – so it covers more illnesses and needs fewer technicalities.

This also makes it easier to get: insurers generally have fewer issues in providing day-one cover because it’s less likely that you’ll make a claim right away.

The downside? It’s not very common in New Zealand – so finding the policy for your needs can be tougher (and require more research).

Free look period and cooling off period

A cooling off period is a period of 14 days during which a policyholder can review the policy and return it if he is not satisfied. On the other hand, a free look period is a period of 15 days during which a policyholder can review the policy and return it if he is not satisfied.

Different critical illness cover options and their benefits

Most critical illness cover is a bit of a misnomer. If you’re looking for the sort of protection that will pay out in the event of something seriously wrong, you’re probably better off with permanent disability cover. This gives you a solid base to build on, and if anything happens it will meet your needs. But the most important thing to understand about this is what it doesn’t do for you. It doesn’t provide coverage for anything that’s happened in the last three months—so if your accident happened before last month, it won’t pay out now even if your health has deteriorated since then. Nor does it provide coverage for things like minor injuries or illnesses such as flu or colds, so if you get hurt at work or catch a cold at work, it won’t help.

Permanent disability covers medical expenses up to $200,000 (or $300,000 in some cases) and pays out from day one of the policy period. These are covered by an additional premium paid through insurance companies’ monthly premiums rather than upfront fees like most other types of insurance policies require. It also includes cover for hospitalization costs and treatment expenses up to 10 days after treatment begins; replacement lost income; estate duties; funeral expenses; cremation costs up to $5,000; effects of occupational disease causing death; loss of ability to earn income due to mental illness; claim handling fees; legal fees associated with getting benefits paid out due to accidental injury or sickness while on holiday abroad overseas

Limitations: The only health-related conditions covered under permanent disability are those relating specifically to your occupation—that means none of what I mentioned earlier gets covered (diabetes caused by accidents at work etc.), and nothing from any other source is handled—you need comprehensive health insurance which will include all those things too otherwise this kind of cover won’t be enough for you