What is critical illness insurance?
Critical illness insurance covers you for a specific term (commonly 10 years) and pays out a lump-sum tax-free benefit if you should become critically ill during the coverage period. In many ways, it’s similar to life insurance, but the benefit is paid to you while you are alive and sick, rather than to your heirs after you die.
In turn, you pay monthly premiums to keep the policy active and the coverage in place for the duration of the term. Your premiums will stay the same for the entire term. When the term is over, you may be able to renew coverage for another term, but the premiums will likely increase as the cost of critical illness insurance increases with the age of the person insured.
