A very common form of add-on to a life insurance policy (or a policy that can
be taken out in stand-alone form) is dread disease cover. This is a policy that
is designed to pay out a lump sum or a set of regular payments in the event that
you contract a life-threatening or terminal illness that will render you unable
to earn a living, and that requires large medical expenditure. In addition to
this, it will also cover premiums that need to be paid when you are unable to
earn an income.
Each life insurer will have different details in their policies, but most of
them cover the most common dread diseases. Note that you are not able to take
out a policy like this on a disease that you have already contracted, or that
you have already had an instance of. So, for example, if you have already had
some form of cancer when you were younger, this will be excluded from the
policy, even though you may have made a complete and full recovery.
The insurance policy will usually pay out as soon as the diagnosis has been
conclusively confirmed.
Here is a list of the most commonly covered dread diseases - not all
insurance policies will cover all of them, and some will cover additional ones,
so use this as a rough guide only, and make sure that you check all the cover
details with your prospective insurer:
- Permanent total disability
- Strokes
- Kidney or liver failure
- Heart disease (e.g. heart valve replacement, angioplasty, heart attack)
- Blindness and deafness
- Alzheimer's Disease
- Cancers and brain tumours
- Loss of limbs
- HIV/AIDS
- Multiple sclerosis
- Major organ transplant
- Paralysis
- Parkinson's disease
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