Critical Illness

Critical Illness insurance is new to this side of the Atlantic.  Popular in Europe for some time now, Critical Illness insurance provides a benefit payout upon diagnosis of one from a set of specified critical illnesses, such as heart attack, stroke, or cancer.  Since these provide benefits upon diagnosis, they make a great companion product to long-term care, which carriers an elimination period before it begins paying benefits.  A Critical Illness policy can bridge that gap and provide needed financial relief until your LTCi policy takes over.

Critical Illness also can be used by itself, for those unable to get coverage through traditional LTC avenues.  Some products offer a monthly benefit on diagnosis, while others provide a lump sum payout.  Either can be structured to have the right amount of money when the client needs it most.

How Critical Illness Got Started

Unlike other products on the market, Critical Illness wasn't originally conceived by an insurance company or an actuary.  It was created by a doctor.  Dr. Marius Barnard, a South African cardiac surgeon, was part of the team that performed the world's first human-to-human heart transplant in 1967.  These new life-saving techniques were designed to have no lasting negative effects on a person's health after the procedure.  However, the patients were not recovering as they should have... and Dr. Barnard soon realized it was due to the immense financial hardship these patients suffered after he had treated their critical illnesses.  Motivated by this, he convinced South African insurance companies to introduce a new type of insurance.  Dr. Barnard argued that, as a medical doctor, he can repair a patient physically, but only insurers can repair a patient's finances.  On August 6, 1983, the first critical illness insurance policy was launched.

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