Saturday’s= Retirement Talk
Critical illness insurance is pretty much what it sounds like. If you get a diagnosis that you have a serious illness then you get an insurance payout. What the money is used for is up to you. The usual suggestions are medical care or a big party. For those of us who are self-employed the money could be used to keep the business running while you get treatment and hopefully recover. Or, to keep the business running while you try to sell it if you are not going to recover.
Maybe you have a bunch of insurance already? Let’s look at the differences.
Disability insurance is similar to critical illness but usually pays you a monthly amount once you have established, to the insurance company’s satisfaction, that you are in fact disabled. Disability insurance does not generally result in a lump sum of money.
Business interruption insurance pays a monthly amount when something happens to affect the business itself such as a fire, flood or tsunami. The factors that result in a business interruption payout do not include the owner getting sick.
The classic insurance question is – What risks do you have and how are you mitigating them? Is there a place in your insurance framework for critical illness insurance?