When Robert suffered a heart attack, he had more than just his medical condition to worry about—he spent two days in the hospital and three months recovering at home. During that time, the added health care expenses and reduced income could have strained his savings. Fortunately, he had prepared ahead of time with critical illness insurance.
Many people assume that a standard health insurance plan will cover all medical costs related to critical illness like cancer, stroke or a heart attack, but that’s not always the case. The additional out-of-pocket costs that come with major health conditions can add up quickly, and they can place financial pressure on an already stressful situation.
Robert’s critical illness policy paid a $10,000 lump-sum benefit after his heart attack diagnosis. He was free to use the benefit for anything—including medical expenses, child care and transportation—and he even saved some for future needs.
Like most people, Robert never expected to face a critical illness, but they can happen to anyone at any time. Critical illness insurance can provide a financial cushion that helps defray some of the costs that come with an unexpected diagnosis.
Critical illness insurance protects you financially if you fall ill with a serious or life-threatening illness.
How does critical illness insurance work?
Critical illness insurance is a supplemental health insurance product that is separate from your primary medical insurance. It pays a predetermined financial benefit upon the diagnosis of a covered illness. Critical illness benefits can help pay for expenses not covered by your medical insurance—including copays, coinsurance, lab-fees and diagnostics—as well as nonmedical costs that result from the diagnosis.
What kinds of conditions are covered?
While insurers will vary in what they cover and the benefit amounts they pay, coverage generally includes conditions such as cancer, heart attack, stroke and major organ failure. Some insurers have also expanded their coverage to include conditions such as skin cancer, sudden cardiac arrest, mini stroke (transient ischemic attack), stem cell (bone marrow) transplants and many more.
Be sure to review the complete list of covered conditions and benefit amount(s) in your group’s plan before you enroll in coverage, so you know what to expect.
Why do you need it?
Even with excellent medical insurance, a critical or life-threatening condition can cause financial difficulty. Even if you have disability insurance to replace some of your income, it may take a few months for the benefits to kick in. You may also incur out of pocket costs like deductibles, co-insurance, and co-payments that are not covered by your major medical insurance. Critical illness insurance can offer fast financial relief and protection for your family.
How do you get it?
Many employers offer this optional coverage as part of their benefits package to help employees cover expenses if they face a critical illness. Plans are generally voluntary, and the premium is deducted from your paycheck.
Personal critical illness insurance policies are also available, and you can shop around to find the coverage that fits your needs. However, keep in mind that group insurance coverage through your employer is generally less expensive and can be paid for through convenient payroll deduction.
If you’re concerned about the financial impact of an unexpected illness or condition, critical illness insurance may be a good choice for you. To learn more about this coverage and other voluntary insurance benefits that may be available through your employer, talk to your human resources department.