The Difference Between Terminal and Critical Illness Insurance

6 min read
Difference Between Terminal and Critical Illness Insurance

While some people get them mixed up, terminal illness and critical illness coverage are incredibly different. Before you get insurance, you should grasp the distinctions.

They are similar in that they provide an additional layer of security on top of your life insurance policy, but the protection they provide is not the same. So, what exactly are you protected for, and what is the difference between the two?


What is a Terminal Illness?

Sickness can be so serious that it threatens the patient’s life. These are characterised as terminal illnesses because they are often incurable and have essentially no prospect of survival. If you obtain a health insurance policy, your insurance company will cover the medical costs of your treatment in accordance with your coverage.

Difference Between Terminal and Critical Illness Insurance

However, the benefit under a tailored terminal illness insurance plan is often higher; you can choose between a lump sum payment or monthly payments based on the severity of the ailment, and the amount is paid upon death or diagnosis of a terminal illness. To make a claim, you must submit the necessary documentation and diagnosis details supplied by a medical practitioner.


What is a Critical Illness?

When left untreated, a bad sickness can sometimes progress to a critical illness. This, however, is not always the cause of a grave illness. Critical diseases have the potential to be healed, but they can also be fatal in some situations. This means that treatment for these diseases will be more expensive. A heart attack, cancer, chronic liver disease, and other severe illnesses, for example, can be cured or progress to a more serious condition. Purchasing critical illness insurance is an excellent way to protect yourself and your family.


The Difference Between Terminal and Critical Illness Insurance

Difference Between Terminal and Critical Illness Insurance

Terminal Illness Coverage Critical Illness Cover
At no additional cost, it’s included with a term life insurance policy. It can be added to a life insurance policy for a fee.


This allows you to make a claim on your life insurance coverage early.


Some carriers provide it as a stand-alone product.
A claim can be lodged if you are diagnosed with a life-threatening condition that is expected to kill you within the next 12 months. It will pay out if a serious sickness covered in the policy is diagnosed (during the term).
Your coverage will terminate if you file a claim (including life insurance).  

Difference Between Terminal and Critical Illness Insurance

You are now aware of the differences between terminal and critical insurance. Both plans provide long-term benefits at various phases of life. As a result, you should select the appropriate plan based on your financial requirements. The expense of medical treatment is rising as a result of the current pandemic situation. Having a financial backup during such medical issues can be life-saving as well as financially secure. So, while acquiring a health insurance policy, make sure to select one of these options.


Author Bio: Smriti Gala works as a Digital Marketing Manager with Coverfox. As her life turned upside down when COVID severely afflicted her family members, Smriti decided to dedicate her expertise towards informing and educating the masses about the importance of health insurance. When she is not actively writing enlightening content, our ‘monk marketer’ likes to meditate, meet new people and explore less travelled territories.

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