Sometimes things which are presented to you sound too good to be true. This can ring true in the sale of insurance products; such as critical illness insurance. When things sound too good to be true, they should be looked at with skepticism.
Our law firm handles critical illness claims. Anyone can purchase a critical illness policy and receive coverage (provided that they are approved for said coverage). More often than not these policies are sold by independent insurance brokers/agents.
As with any industry, there are some excellent brokers/agents. And there are some less than excellent agents/brokers.
Ultimately selling insurance is largely a commission based business. The more policies which an insurance broker sells, the more money s/he will earn. That means there is a direct financial incentive for a broker to sell you a policy of insurance; whatever that policy might be.
Many people want to protect themselves in the event of injury, disability or illness. One of the ways of doing so is by purchasing a critical illness policy. Of all of the living policies, the critical illness policy is the equivalent to hitting the jackpot on the slots in Vegas. It’s a lump sum payout for a critical illness as defined by the policy. This is attractive for many consumers when comparing it to a disability policy which pays a monthly disability benefit which is subject to an all source offset and whereby the definition of disability changes at the two year mark. One lump sum from the insurance company sounds much better to most people. There is no need to worry about an on going multi year relationship with the insurance company. If all goes well the insured can receive his/her lump sum payout and move on with their lives. As oppose to a long term disability claim where the insured will be in a month to month relationship with the insurance company until the end of the claim (which can take many years to wrap up).
Critical illness policies are high risk, high reward policies which insurance companies don’t so easily pay out on. They will require substantial medical evidence in order to approve your claim. It’s not as easy to get approved as you will think.