Sickness and Accident Insurance: What Is It, Who Needs It & Is It Worth It?

Here is an important question to consider: “If you were to become critically ill and could not work anymore, would your family be able to cope financially? Most of us wrongly adopt the “it-will-never-happen-to-me” mentality, unfortunately, falling seriously ill can happen relatively quickly and at a time when you least expect it. Therefore, by all means, it is much better to be prepared than surprised by how significant the financial burden can be for you and your family. A month without a paycheck can easily prove to be disastrous.

construction worker sickness insurance

So how can you make sure that you are properly protected in case you find yourself unable to work due to an accident or sickness? In this case, it is worth considering sickness and accident insurance. This policy can help you pay the most important bills in case of a prolonged period of unemployment due to poor health.

Policy Features

women pain in the back sickness insurance

Depending on what you need, most policies allow you to tailor your cover by customizing certain features which will consequently determine your level of cover and the premiums you will pay. For that very reason, it is of great importance to understand these features to make sure the product is right for you.

  • Accident only cover – This cover only pays weekly benefits when your injuries, which are a result of an accident, prevent you from going back to work;
  • Accident and Sickness cover – This insurance also provides cover when sickness prevents the insured person from returning to work;
  • Capital Benefits – A ‘capital benefit’ is a lump sum that is paid to you in case you suffer a permanent injury or accidental death;
  • The waiting period – Also referred to as ‘Excess period’ or ‘deferred period’, this is the period of time you would have to be off work before the policy would start to pay a benefit. As a general rule of thumb, the longer the waiting period is, the lower the premiums are;
  • Benefit Period – This is the maximum period that you could get a benefit for each claim. Typically, a shorter benefit period will result in lower premiums;
  • Scope of Cover – The option to choose when the cover applies. The broader your cover, the higher the premium.

What Exactly Is Critical Illness Insurance?

accident at work sickness insurance

Critical illness cover is supplemental to your primary health plan which helps you to pay for out-of-pocket medical and non-medical costs due to an accident or critical illness. It compensates the policyholder with a lump sum payment after getting diagnosed with a specific illness. The policyholder can claim the payout for the purpose of paying for medical and everyday expenses, and for supporting the family. This way, the policy-holder can recover while having a peace of mind knowing that his and his family’s expenses are taken care of during this time period.

Some critical illnesses that sickness insurance might cover include stroke, heart attack, certain types and stages of cancer, multiple sclerosis, etc. For each illness, there is a criterion that defines when you automatically become qualified for a payout. For that very reason, it is of great importance to carefully check the terms and conditions of your sickness policy. You should also check how the policy defines the condition or disease and whether there is a waiting period attached to the plan.

Who Needs Critical Illness Cover?


Since sickness insurance is designed to help cover everyday expenses if you develop a critical illness, you might want to consider coverage if:

  • you are the main provider of income to your family
  • if you have limited savings to use in case your main source of income stops
  • if your employee benefits plan doesn’t provide cover for long term leave due to critical illness.

Factors that determine the cost of sickness insurance:


personal accident insurance

  • Your age is one of the most important factors that determine how much you will need to pay for your critical illness insurance policy. For instance, a 30-year-old individual securing a 20-year term insurance policy will naturally pay less than a 50 – year old securing that same 20 – year term insurance policy.

Medical History & Health Condition

Man suffering back ache moving boxes

  • Your overall health is another significant factor that insurance companies will look at when determining your premiums. Your sickness cover will be much more affordable to secure if you are young, in good shape and without any previous health conditions.


Young caucasian woman quiting smoking

  • Smoking is known to be related to additional health risks such as respiratory issues, lung cancer and heart disease to say the least. Therefore, when securing your illness insurance, insurers will consider this high risk and might increase the premiums to cover for the potential payment. Also, keep in mind that certain insurers may decide not to cover you at all.

Amount of the Payout

work accidents sickness insurance

  • If you decide that you want to have a higher payout amount and some extra benefits, then your premiums will be higher too.
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