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Critical illness insurance in World markets


In South Africa, the UK, Ireland, Australia and New Zealand, critical illness insurance has become a well established form of insurance.

Critical illness insurance continues to grow in popularity and has recently been accepted into other territories including the far east and the United States.

In markets where the product is newer, many insurers choose to use the expertise of reinsurers with worldwide exposure as well as overseas insurers who have sold the product for a number of years. The expertise may come in the form of data provided as well as assistance with the product design features of the product.

Australia
Critical Illness insurance, also known as Trauma Insurance in Australia is characterised by lump sum payments for listed medical events. Unlike in the United Kingdom, Trauma Insurance conditions are not standardised and market competition is based on both premium and policy definitions. It is not uncommon for an Australian Trauma Insurance policy to list 40+ definitions, including Cancer, Heart Attack, Strokes. Around 85% of Trauma Insurance claims paid in Australia are for either Cancer or Heart Disease. It is not uncommon for policies to also offer partial payments, if the condition suffered does not meet the full definition required for a full claim payout.

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Trauma Insurance policies in Australia are most commonly linked to Life Insurance policies, however can be taken as a stand-alone policy and where a Trauma Insurance policy is linked, it will normally deduct the balance of the insured Life Insurance amount.

Trauma Insurance policies in Australia when used to provide personal protection, are generally not tax deductible and any claim proceeds are not taxable. Trauma Insurance is not offered in Superannuation as the definitions available for payment do not always align with the required conditions of release.

Canada
Critical illness insurance options available in Canada:

ROP – Return of premium. If you do not claim a critical illness you can request a return of premium as long as you have fulfilled the minimum time period specified within the policy.
ROPD – Return of premium on Death. Your premiums are returned to your estate. The ROPD is an optional
Term CI – Similar to term life insurance, this critical illness insurance increases in premium cost at the start of each new term. A term is generally 10 years. Term CI expires at age 75 (varies by insurance company).
Permanent CI – Permanent critical illness insurance is a level term insurance, which means the premiums do not change. Permanent CI does not expire unless requested by the client, or failure to pay.
Second Event. If there is a second critical illness you receive 50% of the policy benefit over and above the base benefit. Second event is an optional rider.
Waiver of premium. The premium are waived if you are disabled. Waiver of premium is an optional rider.


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