What is Critical Illness Insurance?
Critical illness insurance is a supplemental policy to your medical insurance. It helps provide financial protection in the event of a critical illness diagnosis. Commonly referred to as cancer plans, a critical illness policy will often cover more than just cancer. Upon a diagnosis of a critical illness, you will get paid a large lump sum of money directly to you. This money that gets paid to you is in addition to your other medical insurance benefits.
Why Get Critical Illness Insurance?
According to the National Cancer Institute (NIH), over 39% of men and women will be diagnosed with cancer during their life. According to the Centers for Disease Control and Prevention (CDC), strokes are a leading cause of long-term disability; kill the same amount of men as prostate cancer, and kill twice as many women as breast cancer. Heart disease, which causes heart attacks, is the leading cause of death for men and women. When a critical illness happens, even with great health insurance, it can have a huge financial impact. Often times savings and retirement accounts get drained while a person is getting treatment and fighting for their life.
A supplemental critical illness insurance policy helps provide additional funds directly into your bank account. You can use these funds to pay for deductibles that reset every year, lost income due to taking time off of work, additional living and transportation expenses, and even alternative therapies that normal medical insurance doesn’t cover.
What Does Critical Illness Insurance Cover?
Some critical illness plans only provide coverage for cancer and are often just called cancer insurance. The most common critical illness insurance policies provide coverage for cancer, heart attack, and stroke (the big 3). Certain plans in select areas might also provide coverage for additional illnesses such as Alzheimer’s, coma, sever burns, and organ transplants. A critical illness insurance policy isn’t designed to replace your normal health insurance. It provides financial protection for you and your family for things that your health insurance doesn’t cover. Lost income, additional living expenses, deductibles, coinsurances, and alternative therapies; are all examples of what a critical illness policy can help you pay for.
Real World Benefits of Critical Illness Protection
When a critical illness diagnosis happens, it can have a devastating impact on your family, emotionally and financially. Even if you have great health insurance, there is still quite a bit of out of pocket costs that you are responsible for. Your deductible, coinsurance percentage, and max-out-of-pocket will all reset every year; meaning you will have to pay those amounts every year. In the event of a critical illness, you will often need to take time off of work which puts an even greater financial strain on your family.
Often times there are additional expenses like increased household costs or increased transportation costs that come as a surprise. Your health insurance will only provide coverage for approved medical treatments, if you wanted to try alternative therapies then you would need to pay for those out of your pocket. A critical illness insurance policy gives you the necessary cash to cover expenses that your health insurance doesn’t cover, so you can protect the financial well being of your family.