Posted In:
MENUMENU
How confident are you that your current health insurance will provide you with enough coverage to keep you and your loved ones financially secure? Will you feel the same if you experience a life-threatening illness when you aren't expecting it?
With critical illness insurance, a policyholder and their family can level up. In fact, securing the right coverage could guarantee you full protection against financial ruin. In a situation where your medical expenses exceed what your traditional health insurance is willing to cover, this kind of insurance brings considerable peace of mind.
Why do so many American families find great benefits in coverage for critical illness? Keep reading to discover why this insurance is so important for policyholders and those who count on them.
Also called catastrophic illness or life-threatening illness insurance, this type of policy covers your medical treatment after things like:
While many people assume their standard health insurance provider will step up and cover these costs, they often underestimate the limits involved. Critical illness costs often rise to the point where they exceed the maximum coverage your plan provides, which is why you need additional options.
Critical disease coverage focuses on paying expenses for illnesses that require extensive care or prolonged treatment. Medical care-related costs add up quickly. Just think of the tests alone that your medical care providers will need to repeat to monitor and assess your condition.
Coverage should help with the following conditions and more:
The policies may pay you directly with cash (a lump sum) that you can use for treatments or even for some associated non-medical expenses. For example, some policies allow you to use the money for daily living expenses so you can focus on getting better rather than bringing in a paycheck. Other policies allow transportation expenses, such as getting to the hospital or purchasing a wheelchair.
Terminal patients may get to use the money for other things, like one last vacation with loved ones.
No matter the quality of your severe illness insurance, you’ll face certain limitations and exemptions. For example, your plan will cover only a certain number of lifetime illnesses (around 5 for children and 25 for adults). You can also customize your coverage to include only certain illnesses, such as purchasing a cancer-only policy.
Like most health insurance, pre-existing conditions aren’t included. If you apply for a plan after receiving a cancer diagnosis, you likely won't receive a lump sum for your care. The policy also won't cover injuries or conditions associated with attempting to take your own life, committing a felony offense, or taking alcohol or illegal substances.
Read your critical illness insurance policy carefully, and be sure to discuss what it doesn't cover with your service provider.
Forbes reports that, despite over 90% of Americans carrying health insurance, about 41% of adults still have unpaid medical debt. Gallup and West Health’s survey also found that 38% of Americans believe the country's health insurance system is too expensive or even “broken.”
Are you one of the few Americans who feel they have adequate health insurance? If not, you might be considering serious ailment insurance for the following six reasons:
Here are a few important statistics for critical illness in the United States:
Do these statistics feel a little overwhelming? They only serve to reveal that severe illnesses are more common than most people imagine.
What's the silver lining? One reason these conditions are more prominent than ever is that an American adult’s life expectancy continues to rise year on year. Mortality rates from cancer and other severe chronic illnesses are also falling, so having the right insurance improves your odds, perhaps significantly.
The most obvious benefit of an insurance policy that covers critical illness is the potential financial security it provides. We've already covered how quickly the expenses mount, even to the point you can no longer afford to pay them. The Consumer Bankruptcy Project confirms that over 58% of all bankruptcies occur from medical debt, and this is a reality in the United States.
With the prevalence of critical illnesses and the rising cost of care, catastrophic medical event coverage is an incredibly smart investment. Unless you have a sizable nest egg earmarked for health emergencies, this coverage could be the only way to secure your financial future.
Do you have traditional health insurance? You're already well aware of its exclusions and limitations. A $10,000 yearly deductible could require you to pay that complete amount all at once if you have just one heart attack—you’re not alone if you can’t afford the hit.
A critical care policy could cover that deductible or offer supplemental insurance, similar to gap coverage. Your regular insurance might not cover a wheelchair, and it definitely won't help you with living expenses while you recover. If you want options, catastrophic illness insurance pays a lump sum and cites fewer restrictions on how you use the money compared to your primary healthcare insurance.
Are you currently healthy? Don't wait to purchase critical illness insurance until you need it!
These policies are cheaper while you're healthier, younger, and less at risk of developing a covered condition. Lock in a low-cost plan right now, and you'll be more likely to receive affordable monthly rates in your later years.
In addition to paying out a lump sum, purchasing a severe illness policy can bring additional financial benefits. For example, some policies offer a percentage back of monthly premiums after a certain period, similar to a long-term life insurance policy that starts paying you after an agreed-upon coverage term.
Purchasing this critical illness plan also offers tax deductions. With an already affordable monthly premium, additional financial benefits are the cherry on top.
Constantly anticipating a heavy financial burden can cause sleepless nights and chronic stress, which can, in turn, increase the likelihood that you develop a severe illness. Are you receiving great coverage for a minimal price? That means you aren’t one illness away from financial ruin.
If you’re sleeping better and worrying less, you’ll devote more focus to enjoying life and wellness. You deserve the life you want. If investing in supplemental insurance for critical illnesses brings that peace of mind, isn’t it worth looking into?
If you're worried about how much you'll spend on the monthly payments for a critical illness policy, you can relax; the costs are relatively low. While premiums increase with age, they remain very affordable compared to the extensive coverage they fetch when you need it.
On the lower end of the spectrum, Forbes reported that the average 25-year-old non-smoker in 2022 paid about $15 each month for $25,000 in coverage. The average 60-year-old who didn't use tobacco paid around $120 each month, which paled in comparison to traditional health insurance plans.
In addition to age, several other factors affect what you'll pay for this supplemental insurance, including the following:
Your overall health affects your risk of developing a critical illness (and how much you'll pay for coverage).
For example, hypertension risks stroke, one of the conditions a critical illness policy aims to cover. Obesity also increases your risk for several severe conditions, so if your weight affects your overall health, you might pay more.
While women often pay more for traditional health insurance, men typically pay more for critical care insurance. While the disparity remains marginal at lower coverage limits and in younger policyholders, it increases as you age.
For example, imagine you have $25,000 worth of coverage. At 35 years of age, a man would pay an average of $3 more per month than a woman of the same age, and on $100,000, it would be around $10 per month. 55-year-old men would pay roughly $18 more (around $63 each month for a $100,000 policy).
Nicotine use is a huge deal for critical illness insurance, as it has wide-ranging health risks.
The Forbes report above had regular smokers paying between 60% and 80% more for coverage, and this is consistent across the industry.
Finally, your location can significantly affect how much you'll pay for insurance coverage, including critical care policies. Does your area have less access to doctors? Healthcare will cost more in general, which will correlate with your critical care coverage.
Does your location present other risks for developing severe illnesses, such as polluted water or breathing air? You'll likely pay more for your policy, as well.
If you've received a diagnosis covered under your severe illness policy, use the following steps to apply for your payout:
The first step in receiving your money is filing the claim. Most insurance providers allow you to file the claim using an online portal you can access from your account.
If you prefer to do things the traditional way, you can often find a printable form (mail in or scan).
To improve the chances that your insurance company accepts your claim, you'll need to submit all the necessary information. For example, before filing your claim, gather the following:
An important tip is to always remain truthful about your symptoms, even if you think they'll put the status of your claim in jeopardy. You should also file the claim immediately after a diagnosis so that you have the best chance of receiving your money before you start paying for treatment.
In general, claimants will receive money in 5 to 14 business days after the insurance company accepts a claim. Some insurance providers directly deposit the money into your bank account, but it’s more likely you'll receive a check in the mail.
As we’ve seen, most severe illness insurance policies put very little restriction on what you can use this money for. While you can't use it for gambling or anything illegal, you have flexibility in how you use it compared to the money you'd receive from traditional insurance.
The money you receive from your claim should also be tax-exempt.
Might you and your family benefit from critical illness insurance? Why not make the process of choosing the right policy simple and use Insurdinary’s low-stress, risk-free online comparison tool? Our website helps you find and compare rates and coverages from a wide variety of reputable insurance providers.
When you shop on Insurdinary, you get free quotes, and, more importantly, there’s no obligation to purchase anything. Start the process of finding your critical illness insurance today, and if you still have questions, feel free to reach out to our insurance experts for answers.