Critical Illness Insurance

Financial hardship makes dealing with a critical illness even more daunting. Critical illness insurance is meant to help you and your family through tough times. Unfortunately, regular health insurance does not cover all of the expense resulting from such an upheaval. Rather, your policy only covers the medical costs directly associated with the illness, such as hospitalizations, doctor visits, or medications. Critical illness insurance accounts for other costs resulting from your condition. Critical illness insurance plans provide you and your family with an added measure of security, if you are predisposed to a major health condition covered by the policy.

How does a critical illness insurance policy work? It pays out a lump sum if you develop a severe illness covered in the contract. Typical conditions that the average critical illness insurance will cover include most types of cancer, heart attack, stroke, most organ transplants, and deafness or blindness, although the exact coverage varies among critical illness insurance plans. Sometimes certain subcategories of conditions aren’t covered by most critical illness insurance companies, so it is important to read contracts carefully. For example, many critical illness insurance plans do not cover most forms of skin cancer. Critical illness insurance rates will be higher for more comprehensive coverage. In addition, injuries or illnesses that are self-inflicted or the direct result of illegal activity are not covered; neither is suicide.

Critical illness health insurance payouts can be used for almost anything you can think of. There are no strings attached to the money. The purpose of a critical illness insurance policy is to reduce stress and allow you to focus on recovering from your illness. Therefore, you can use the lump sum for mortgage or rent payments, utility bills, credit card bills, or other loan payments if you’re unable to work. Maybe hiring household help would take some of the burden off your caregivers–critical illness insurance allows you to pay for that. Critical illness insurance can also help cover large deductibles and co-payments for prescriptions and treatments. You will also be able to afford travel and accommodations to and from specialized treatment centers for you and your family. You can even go on a vacation to celebrate your future recovery with any remaining funds!

Critical illness insurance has several limitations associated with it. First, it will most likely be too late to buy critical illness insurance after you developed an eligible condition. Most critical illness insurance companies also refuse to sell policies to individuals over 65 years of age. Critical illness insurance companies make money by minimizing the amount of claims they must pay out while maximizing the monthly premiums they receive. If your illness is a already a certainty, they are unlikely to underwrite critical illness insurance policies for you.

There is also usually a waiting period for your critical illness insurance coverage to begin. Although it depends on the specific critical illness insurance plan you purchase, you may also have to wait for a certain length of time in order to receive the lump sum–often 30 days after diagnosis. If you pass away during that time period, no money will be paid out unless you have previously purchased a separate policy rider. For an additional fee, it will ensure that your estate will be covered in the case of death.

Critical illness health insurance is generally sold in amounts from $10,000 up to $1 million. The value you choose should cover at least a year of your income, along with your credit card debts and several years’ of mortgage payments.  It may be a good idea to buy such a policy at a relatively young age if you are at high risk (due to genetic factors, etc.) and have others to support, since critical illness insurance quotes tend to be cheaper for younger individuals in better health. Coverage is usually available for periods of two to 25 years. Critical illness insurance is sold alone, or with a health or life insurance plan.

Our company is here to help you out in situations like these. If you would like to get a quote, please give us a call at 860.684.2721 or visit our website for more information.

7 thoughts on “Critical Illness Insurance

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