Critical illness insurance

Critical illness insurance or critical illness cover is a contract, invented by Dr Marius Barnard, where an insurer makes a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed on the insurance policy and survives a minimum number of days (the survival period) from the date the illness was first diagnosed.

The schedule of insured illnesses and the survival period varies between insurance companies. 30 days and 28 days are the most common survival periods but some companies have adopted a 14 day survival period. The contract terms contain specific rules that define when a diagnosis of a critical illness is considered validated. It may state that the diagnosis need be made by a physician who specialises in that illness or condition, or it may name specific tests, e.g. EKG changes of a myocardial infarction, that confirm the diagnosis.

Examples of Conditions that might be covered:
 * myocardial infarction (heart attack)
 * invasive malignancies (cancer)
 * stroke with neurlogic residuals
 * Alzheimer's disease
 * kidney failure
 * multiple sclerosis
 * need for organ transplant
 * paralysis of limb
 * blindness
 * deafness
 * total disability

The risks covered by Critical Illness Insurance are significant. For example, in America, about 1.3 million new cancer cases are diagnosed each year, every 29 seconds someone suffers a coronary event and every 45 seconds someone suffers a stroke. In Canada, more people will experience a critical illness before they reach 75, than will die before that age. In the United Kingdom, 1 in 5 men and 1 in 6 women will experience a critical illness before their normal retirement age.

Though relatively new to the North American marketplace, critical illness insurance is growing in popularity.

In the UK, Critical Illness Insurance is a well established form of insurance and is frequently purchased in conjunction with a life insurance policy at the time of a residential purchase. The sale of all insurance in the UK is regulated by the Financial Services Authority. In the United States, critical illness insurance is often regulated in the same manner as health or disability insurances.