Difference between terminal illness and critical illness?

While its not something most people want to spend a lot of time thinking about, it is a very real fact of life that we do get ill and in some instances this can mean that we are unable to work. In these instances there are insurances that cover our debts while we are unable to work as long as we have planned ahead for just in case of this kind of situation.

When looking in to this kind of insurance it can be quite confusing with all the terminology, for example the difference between terminal illness and critical illness. Of course these are two very different things and as such the insurance is different, so here is a quick guide to the differences between them.

Well there is a hint in their names, terminal illness is defined as an illness diagnosed by a Doctor which the Doctor expects you to die from within 12 months. Terminal illness cover provides a lump sum which makes it an early pay out package. Most life insurance policies cover terminal illness as a matter of course.

Critical illness insurance covers you if you are diagnosed with a chronic illness, examples of these are certain cancers, heart disease, strokes, loss of sight, hearing or speech as well as onset of Parkinson’s or Alzheimer’s disease. Critical illness policies pays out a lump sum on diagnosis and there is no life expectancy criteria. This lump sum can come in handy to help you and your family through difficult times if you are the main earner in the household. The main difference between critical illness and terminal illness cover it that critical illness cover pays out as soon as you are diagnosed rather than upon on your death. This can help you spend quality time with your loved ones without having to worry about the financial aspects of life.