Life Insurance Vs Critical Illness Insurance: Which One Should You Get?

 Insurance is there to provide protection against risk. Similarly, Life Insurance and Critical Illness Insurance also protect against risks but the difference is that they protect against two different kinds of risks.

Let us now look at Life Insurance Vs Critical Illness Insurance and see where they differ from one another.

1. The first and foremost difference is in the kinds of risks they provide protection against.

Life insurance provides cover against the loss in finances when an earning individual of the family passes away while Critical Illness Insurance, the financial cover is provided for the treatment of the critical illness that is developed in the insured. It helps with the financial loss caused by the illness.

2. In Life Insurance, the person who has bought the insurance, dies then the beneficiary will receive a lump sum amount. And in Critical Life Insurance, if the insured is diagnosed with an illness that's listed in the conditions covered by the critical illness cover, and which meets the definitions, then the insured will be provided with a tax free lump sum.

3. In Life Insurance, the death of the insured is necessary to receive cover, whereas, in Critical Illness Insurance, no one needs to die to receive cover.

4. In Life Insurance, the lump sum will be received by the beneficiary whereas, in Critical Life Insurance, the insured will receive the promised lump sum.

5. The death benefit that the beneficiary will receive in Life Insurance, they can use that money at their own discretion while in Critical Illness Insurance, the insured decides how to use the funds he/she receive.

6. You don’t need Life Insurance if you have no living family member that will need financial help if you pass away, in such a case, it is a better idea to get Critical Life Insurance. On the other hand, if you are over in your sixties then you shouldn’t get Critical Life Insurance, it is a better idea for you to get Life Insurance. 

7. The premiums that you will have to pay will be lower than when compared to the premiums of Critical Illness Insurance.

8. There are many life providers that provide Life Insurance even after the age of 60 while many providers don’t provide Critical Illness Insurance beyond the age of 60 because many of the critical illnesses are only covered if the disease is diagnosed before the insured turns 60.

THE VERDICT

If you are wondering, ‘Life Insurance Vs Critical Illness Insurance, which one to buy?’ Both insurances are necessary to provide protection to you and your family. Which one is the better choice for you, depends on your age and family medical history.

Though both Life Insurance Vs Critical Illness Insurance are two products that complement each other and if taken together, can provide a more comprehensive and safer insurance protection plan. You can get life insurance and can add on a separate critical illness cover but along with it being safer, it can also be more expensive. If you have budget constraints, you can consider buying insurance that has both life cover and critical illness cover together in it.