No one doubts the importance of a comprehensive health insurance policy for offering protection should serious illness strike. Likewise, more and more people recognize the value of appropriate life insurance coverage in providing security for loved ones should the worst happen.
However, there are two other types of health-related insurance which receive far less widespread consideration: critical illness coverage and long-term disability (LTD) insurance. What do these policies entail?
Critical Illness Insurance
If one is diagnosed with a serious, potentially life-threatening illness, then critical illness insurance will pay out a one-off, tax-free benefit which can be used for any purpose. Many people use the money to pay for additional treatments not covered by regular health insurance. Others use the payout to clear debts such as a mortgage, tidying up their financial circumstances to reflect their new circumstances.
Long-Term Disability Coverage
Long-term disability insurance acts as an income replacement if a serious medical condition impairs one’s ability to work. In most cases, a monthly amount equivalent to a percentage of usual income will be paid, and ongoing proof of the medical condition and its effects must be provided. If one’s health recovers sufficiently to restart working, then the benefit will stop.
Which Should You Choose to Offer?
As with any financial product, there are many factors to take into account when deciding whether to take out these insurance policies. In general terms, critical illness insurance could be of huge benefit to those with substantial debts which would be troublesome if financial circumstances changed dramatically. However, there are no further payouts to live off once the initial lump sum has been spent.
Because of this, younger people who could face many years of restricted earnings ability may prefer to secure the long-term income replacement that LTD coverage provides.
Everyone’s circumstances are different, and it’s in these complex areas of insurance that the services of an insurance agent or human resources representative can be invaluable. After all, choosing the wrong type of employee benefits package could prove nearly as problematic as having no plans in place at all. However, a well-designed benefits package that takes all employee’s financial circumstances into account will provide security and peace of mind far into the future.