A survival period is a requirement commonly found in critical illness insurance policies whereby the insured must survive for a specified minimum number of days after the occurrence or diagnose date of the critical illness (CI).
While insurance companies do not provide a clear explanation of the purpose that survival period requirements serve, the general consensus is that this condition is inserted into policies as the objective of critical illness plans is to provide financial support (living benefit) for those who are suffering from illnesses and getting treatment with a view towards recovery.
They are not intended as a death benefit for beneficiaries like life insurance.
It is not meant to provide a a lump sum fund for living expenses of a family to replace the loss of income after the death of a breadwinner. It is meant to cover the medical expenses incurred for the treatment of the insured.
So an insured person with a such a policy might actually suffer from a defined critical illness stated in the policy but don’t receive any benefits from it.
For example, someone who suffers a sudden heart attack might die after 3 days and never get to receive any payouts from the insurer.
If a death benefit makes more sense, then getting a term life of whole life insurance policy might do better at meeting your needs.
Anyway, most life policies would allow the policy holder to purchase riders or add-ons for critical illness.
Depending on the insurer and the type of CI policy being purchased, survival periods can be anywhere between 7 days to 30 days.
And if an insurer has different tiers towards survival period, one can expect that the shorter the survival period indicated, the larger the premiums would be.
Coverage for critical illness does not necessarily come in a dedicated policy, but can be from a rider or additional benefit stacked onto another type of policy.
Not all CI policies come with survival period requirements.
And when they do, the survival period might be listed in a table indicting different survival period requirements for different types of covered conditions.
In some circumstances, should the insured pass away from a covered critical illness without meeting the requirement, the premiums paid for the policy might be returned to the family as some sort of death benefit.
This depends on the type of plan and terms contained in it.
Lastly, don’t confuse the waiting period with the survival period.
The former commences after the issuance of the policy, while the latter starts on diagnosis.
