Insurance is all about protection. Home, life, and automobile insurance all protect a certain part of our lives, so we can live safely and comfortably.
Two options that lots of people like include life insurance and critical illness.
Life insurance protects against financial loss, in the case that a breadwinner dies.
Critical illness also protects against financial loss. However, it protects against a financial loss that is a result of a critical illness diagnosis.
People choosing between the two policies may learn more by comparing the two.
- 1 Life Insurance Pros
- 2 Life Insurance Cons
- 3 Critical Illness Pros
- 4 Critical Illness Cons
- 5 Life Insurance VS. Critical Illness
- 6 Is Life Insurance Worth It?
- 7 Is Critical Illness Worth It?
- 8 Conclusion
Life Insurance Pros
There are many policies to choose from including Term Life and Permanent Life options. The range of choices helps individuals find an option that works best for them.
Financial stability to dependents left behind
People who make the largest income in their homes may have a family who is dependent on their income. Life insurance helps to give them the monetary protection they need to continue living their lives.
Not all insurance is expensive. Policies such as term life offer more affordable coverage with lower premiums, so long as the person is young and healthy.
Investing opportunities with permanent life insurance
In addition to protection, permanent life insurance policies have cash value growth and investment options. People can enjoy protection as well as monetary growth.
Peace of mind that loved ones will be taken care of
Life insurance takes care of the family. Even if the insured individual passes suddenly, the full lump sum will be paid.
Life Insurance Cons
Younger people are less risky for insurers. Older individuals will have to pay higher premiums.
Some policies are very expensive
Term life is very affordable, but permanent life options get pricey.
Additional expenses and fees in some cases
Some underwriters will add in extra fees and charges. These can begin to add up on top of the expensive premiums.
Renewing can be very expensive
With term life, many people live past the 20 or 30-year coverage they chose. When it comes time to renew, premiums will be much higher due to their age.
Previous health issues or unhealthy habits can raise premiums
Many life insurance policies are only approved with a medical examination. Insurers like to know that a person is as healthy as they say they are.
Critical Illness Pros
After being diagnosed, the policyholder will be given a tax-free lump sum. This is helpful for paying bills and avoiding debt throughout their illness.
Peace of Mind
Illness coverage offers peace of mind that a family will be taken care of, while the breadwinner is sick.
It can be stressful worrying about money and expenses. Being protected helps to reduce that unnecessary stress, which can also encourage a faster recovery.
Wide Range of Protected Illnesses
There are many illnesses protected by critical life, with many offering full payout. The long list ensures the highest number of people possible are protected.
Critical Illness Cons
Premiums can be very expensive, especially if there are many illnesses to cover.
Some illnesses are not covered by critical illness, which puts many people in a tight position. It’s ideal to ask around about the specific illnesses each insurance companies covers.
A policyholder with medical conditions may have higher premiums. They may also pay more if someone in their family possesses genetic medical conditions as well.
Life Insurance VS. Critical Illness
|ASPECT||LIFE INSURANCE||CRITICAL ILLNESS|
|Purpose||· Replaces the loss of income for a specific amount of time|
· Covers any outstanding debts
· Funeral/burial expenses
· Leave an inheritance
|· Replace lost income|
· Cover large amounts of debt such as a mortgage
· Help with recovery costs and treatment
|Pay||The lump sum is provided.||A lump sum is provided.|
|Number of Payments||One payment at the time of death.||A single payment at time of diagnosis.|
|When to Buy||The younger and healthier, the better. Consequently, older people will pay more.||Younger people will fare better since many coverages aren’t applicable after the age of 60.|
|Price Range||Low to high, depending on the individual and type of coverage.||Range from low to high, depending on the individual, their history and the type of coverage chosen.|
|Funding Control||Funding is controlled by the beneficiaries named. They spend the money how they want.||Control is given to the insured individual. Options include treatment, expenses, etc.|
Is Life Insurance Worth It?
Life insurance is a smart thing to have at any age. A lump sum can help families members, pay for funeral expenses, or go to a chosen charity.
The benefits greatly outweigh the cons when the right policy is used.
Is Critical Illness Worth It?
The benefits of critical illness cannot be overstated. Critical illness and life insurance cover totally different things and one will not replace the other.
Critical illness protects people in the present. This is a huge benefit, most of all for those who are young and far from obtaining their life insurance payout.
It’s ideal to purchase both types of coverage. This may allow for a certain discount. Shopping around for insurance quotes helps to find the best coverage at the best rate.