What Does Catastrophic Health Insurance Mean?
Catastrophic illness insurance is a type of insurance that financially protects the policyholder against specified severe illnesses within a definite period of time. The insurer typically pays the policyholder in lump sum, either full or partial, in the event that the policyholder is diagnosed with any of the specific illnesses covered under the insurance policy. Once paid, the policyholder has freedom to use the money for whatever purpose.
Catastrophic illness insurance is also referred to as critical illness cover, critical illness insurance, and dread disease policy.
Insuranceopedia Explains Catastrophic Health Insurance
Catastrophic illness insurance can be purchased to supplement an existing life insurance or health and disability insurance. Policy terms vary, but it typically requires that the policyholder must not have a pre-existing medical problem or a critical diagnosis within 90 days after purchase of the insurance product. In addition, a claim will be rejected if the policyholder does not survive within the set survival period after a diagnosis. The common survival period is 14 days, but across the markets, it can range from 8 to 30 days. As for conditions covered, it may include cancer, heart attack, Alzheimer’s disease, long-term hospitalization, and other terminal illnesses. The idea behind this insurance is to provide the policyholder with the financial means to make their remaining or recovery time as comfortable as possible.