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What Is Critical Illness Insurance and What Does It Cover?


Submitted by Pam Deaton, HealthMarkets Insurance

Our lives are constantly changing. Unfortunately, not all of those changes are positive. In one year, more than 795,000 people will have a stroke, 805,000 will have a heart attack, and an estimated 1.8 million will be diagnosed with cancer. Although more and more people survive cancer, many find it difficult to afford their treatment—even when they have good health insurance. Fighting a disease like cancer is very expensive and co-pays, co-insurance, and deductibles can often add up to 20 percent or more of a person’s income. Furthermore, treatment is usually ongoing for many years, so these high out-of-pocket costs continue year after year.

When facing these kinds of medical challenges, the last thing a person wants to think about is the potential impact to one’s finances from sky-high medical bills. Thankfully, that is where critical illness insurance can help.

What Is Critical Illness Insurance?
Critical illness insurance is a type of supplemental insurance plan. Like other supplemental insurance plans, critical illness insurance can help pay the expenses left by your health insurance coverage in the event of an unexpected medical event.

Critical Illness Coverage
If you experience a qualifying illness, critical illness insurance policies pay out lump-sum cash benefits directly to you. Qualifying events can include:

  • Alzheimer’s Disease
  • Amyotrophic Lateral Sclerosis (ALS)
  • Benign Brain Tumor
  • Cancer In Situ
  • Coronary Artery Bypass Graft
  • End-Stage Renal Disease (ESRD)
  • Heart Attack
  • Illness-Induced Coma
  • Invasive Cancer
  • Major Organ Transplant
  • Stroke

Because you get the benefits paid directly to you, you can use your benefit amount in whatever way you need (out-of-pocket medical costs, mortgage payments, transportation expenses, or added child-care costs). But don’t wait for an illness to strike before getting critical illness insurance. You cannot purchase this type of plan after an illness has been diagnosed. In order to receive the cash benefit of a policy, you must be first diagnosed after the waiting period of your policy.

How Much Does It Cost?
Like most supplemental insurance plans, your premium will depend on a few factors. The first factor is the benefit amount you choose. For example, benefit amounts can range anywhere from $5,000 to $100,000, depending on the plan. Your age and gender will also influence your monthly premium. If you are concerned that your medical history will affect your premium, there are insurance companies that will offer a cash benefit without requiring you to take a medical exam.

What Critical Illness Insurance Is NOT
A critical illness insurance plan can cover many medical events. However, that doesn’t mean it offers “all-in-one” coverage. Before we move on, let’s talk about what a critical illness plan is not.

  • A Qualified Health Insurance Plan—critical illness insurance plans are not designed to replace your qualified health insurance plan. They will not provide the overall coverage a health insurance plan will. Instead, critical illness insurance is designed to supplement your existing health coverage.
  • A Cancer Insurance Only Plan—certain types of cancers are often included in critical illness plans. However, that is not all they cover. Strokes, heart attacks, and other illnesses can also be covered by critical illness insurance plans since they are more comprehensive.
  • A Life Insurance Plan—although life insurance is also a type of supplemental coverage, critical illness insurance is not a type of life insurance

The high costs of today’s health care has left millions with unmanageable debt. Critical illness insurance can provide a safety net in the event of a serious medical diagnosis that requires expensive treatment.

HealthMarkets can help you find a critical illness insurance plan that suits you. Pam Deaton, a licensed agent can help you identify a benefit amount for your financial needs and provide an accurate quote for that benefit amount. Or, if you would like to learn more about critical illness insurance plans first, visit her website or call Pam’s office at 309-287-3518.