Life is unpredictable – and serious illness doesn’t only affect your health. It can disrupt your finances and lifestyle too. While life insurance remains crucial, critical illness cover is increasingly recognised for its importance in the insurance sector as it provides vital protection during your lifetime. Ian Featherstone, CEO of IAE Insure, explains why both are essential to have well-rounded insurance protections.
Understanding the Differences.
First things first, understanding the difference between life insurance and critical illness cover is essential. It’s simple enough to understand but some people with life insurance fail to grasp why they might also need critical illness cover.
In short, life insurance is a benefit that pays out in the event of the policy holder’s death. It covers their dependants’ financial futures (such as mortgage and lifestyle) and is important because of its role in providing financial security for the policy holder’s loved ones. In contrast, critical illness cover is a benefit that pays out on diagnosis of an illness or condition covered within the policy. Policy holders are paid a lump sum for treatment, recovery, debt or lifestyle changes. This type of insurance is important as it helps those afflicted by illness to manage costs while they are unwell or unable to work. Most clients will want a lump sum to replace their income and nothing else. This lump sum can enable them to take a couple of years away from work and still have peace of mind. Their medical insurance policy will be there anyway to take care of ongoing treatment.
How Serious Illness Can Hit Hard.
It’s easy to think that you’ll never be afflicted by a serious illness. This is particularly true in the UAE where much of the workforce are younger, vibrant expats. However, if you are unlucky enough to need treatment for a serious illness, treatment costs can quickly spiral out of control. Even with medical insurance, there are frequently out-of-pocket expenses for specialist treatment. Critical illness cover can help with this. Lifestyle changes are also sometimes costly, with home adaptations, rehabilitation and costly medications adding up quickly.
Of course, loss of income is the main reason that those in the UAE should think about purchasing critical illness cover. After all, if you can’t work, critical illness cover provides a vital safeguard and helps to maintain finances, protect savings and ensure financial security for dependents in a difficult emotional time.
Important Policy Features.
There are a number of important policy features to look out for:
– List of illnesses covered: Make sure to look for cover including cancer, heart attack, strokes, and organ failure.
– Pay-out definitions: Clarify policy terms. Some pay on early cancer diagnosis rather than just advanced stages.
Expert insurance brokers like IAE Insure will be able to help prospective policy holders to navigate all of these features of a policy and to decide what they need covered and what they don’t. To learn more about critical illness cover, visit our website.
Why You Need Both.
To make sure that insurance coverage is comprehensive, it’s important for all different types of people living and working in the UAE to have both life insurance and critical illness insurance. Different people will require both types of insurance for different reasons. For young professionals, critical illness cover provides immediate protection for treatment costs and loss of income, while life cover secures long-term financial stability. Meanwhile, for mortgage holders, critical illness cover helps maintain mortgage payments during illness; life cover takes care of dependants afterwards. For self-employed people, critical illness cover is even more important as it protects them if illness halts their business. Life insurance helps to support their loved ones if they’re gone.
While both forms of insurance are important, it will also be key for the insured party to choose the right mix of policies. This involves calculating needs: considering mortgages, debts, income, and family commitments. It will also require the policy holder to assess affordability, especially as premiums rise with age and health issues. Seeking cover earlier will help to reduce costs. Insurance brokers like IAE Insure can help with all of this. Further, they are able to help find a suitable combined option, taking advantage of insurers offering hybrid plans which combine both life insurance and critical illness cover. These plans can be both efficient and cost-effective.
Conclusion.
Life insurance and critical illness cover are two pillars of financial protection: one safeguards your family’s future, the other supports you through serious illness. In the UAE, a well-rounded insurance plan includes both – ensuring security in life and beyond. Contact our specialists for a free financial needs assessment today.
