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Last Updated on July 18, 2024 by Insurdinary Editorial Team | Fact Checked by Rhonda Gary -->
According to the 2022 census, around 304 million people in the United States had health insurance. Given the high healthcare costs that seem to continue increasing, having health insurance is essential for many people.
Although a solid health insurance policy covers quite a bit, it doesn’t typically offer coverage for critical illnesses. This is why people look to a separate type of policy for critical illness insurance.
Critical illness insurance aims to provide essential peace of mind in the face of a serious, life-threatening diagnosis. If you receive a critical illness diagnosis, chances are you’ll soon be responsible for multiple high medical bills for treatments, procedures, medications, etc. Considering around 100 million Americans struggle to pay their medical bills, this type of insurance could create a world of difference for you and your family.
But critical illness insurance does more than give you affordable healthcare; it can also give you invaluable peace of mind. Understanding how these unique plans work and what they cover can help you make a more informed decision about your health insurance needs. Keep reading to learn more about the relationship between critical illness insurance and mindful reassurance for you and your loved ones.
Critical illness insurance isn’t your typical health insurance plan. Rather than covering basic healthcare services like routine doctor appointments and prescriptions, this type of policy pays out a lump sum if your doctor diagnoses you with a critical illness.
Although the overall definition of critical illness can be quite broad, insurance companies use three specific categories: cancer, heart conditions, and organ damage. If your diagnosis falls into one of these three categories and is terminal or life-threatening, the insurance company will pay out 100% of the benefit. However, if your diagnosis isn’t as serious, you may only get some of the benefits.
Coverage amounts vary depending on your plan and the type of diagnosis you receive. Here’s a quick breakdown of each category for a critical illness insurance plan.
In 2020 alone, 1,806,590 Americans received a cancer diagnosis. It’s no secret that cancer can seriously impact the lives of those diagnosed and their families, especially since the mortality rate is 158.3 per 100,000 adults each year.
If you have a critical illness insurance policy, you’ll receive a full payout upon getting a life-threatening cancer diagnosis. You’ll still receive some of the benefits if your diagnosis isn’t life-threatening, like with benign tumors. It’s also important to know you have a much higher chance of successfully treating cancer if you catch it early, so an early diagnosis may not earn you an insurance benefit payout.
When enrolling in a policy, carefully read through the terms to determine when the insurer will pay out the benefit, whether partially or in full.
In terms of critical illness insurance, organ damage refers to any complications resulting from an organ transplant. However, this category excludes bone marrow transplants. You’ll also receive the full benefit if your doctor diagnoses you with kidney failure.
Some policies have a category for other medical conditions rather than organ damage. In this case, your policy will cover critical illnesses like Lou Gehrig’s disease, lupus, malaria, blindness, tetanus, sickle-cell anemia, coma, and more. Again, you’ll need to check the details of your specific policy to see which conditions it covers.
Serious, life-threatening heart conditions like strokes and heart attacks fall into this category. You’ll also receive part of the benefit if you have coronary artery disease.
A critical illness insurance policy can give you peace of mind when you need it most, but these policies don’t cover everything. For example, most policies won’t cover chronic illnesses like diabetes or asthma since these have high survival rates.
A critical illness policy also won’t cover any pre-existing conditions, but this won’t prevent you from enrolling in a plan. You just won’t receive coverage for said condition.
When exploring insurance options that could provide needed assistance during difficult times, you’ve likely encountered disability insurance. So, what makes it different from critical illness insurance, and why might you choose one over the other?
While both pay a benefit with a certain diagnosis, disability insurance covers more and often has higher payouts, which also means it tends to cost more. Also, a critical illness policy only pays out in one lump sum, while a disability insurance policy benefit comes in multiple payments. If you become disabled, your insurance company will continue to pay you benefits for as long as you remain disabled or until your set benefits period ends, depending on your policy.
While a critical illness policy aims to provide reassuring tranquility when given a life-altering diagnosis, the goal of disability insurance is to replace the income you lost due to your disability so you can receive payments all the way until your retirement in some cases.
The final difference between the two policies lies in the benefit amount. Most critical illness policies have a $50,000 cap, but disability insurance policies can provide long-term payments. Monthly payment amounts will often depend on your income before the diagnosis.
How does a critical illness insurance policy provide a calmness guarantee? First, you need to understand the full impact that a critical illness diagnosis can have.
Critical illnesses with terminal diagnoses can cause serious emotional and financial strain on you and your family. Not only does this type of diagnosis alter your lifestyle, but it can also leave you wondering how you are going to pay for the numerous medical treatments and procedures that you need to get a fighting chance.
Cancer can create especially significant financial problems for families. In America, cancer patients and their families pay around $5.6 billion each year out of their own pockets, with each patient paying around $43,516 just for their initial care.
With such high treatment costs that we can only expect to rise, it’s no wonder people are struggling to pay their medical bills. Although a lot of Americans can’t afford to pay their medical bills, cancer patients are 71% more likely to have their bills go to collections and face issues like mortgage foreclosure and tax liens.
The last thing you and your family need during such trying times is high medical bills that you can’t pay and other financial problems, especially if your diagnosis is terminal. With a critical illness policy in place, you can give yourself and your family the tranquil assurance of one less problem to face.
It’s obvious that having a critical illness insurance policy can provide tranquility when a life-threatening diagnosis leaves you distressed, but is it really worth paying for another insurance policy?
If you already have a life insurance policy, you can typically add a critical illness rider to it for a small additional cost. Going this route could give you 10% of your death benefit upon a diagnosis. Otherwise, you can get a standalone critical illness policy.
No one expects to receive a critical illness diagnosis, but around 14 million American adults live with one. While you can’t always prevent critical illnesses, you can help protect your family from unexpected medical bills, which provides the ultimate peace of mind and makes this type of insurance well worth it.
Serenity confidence likely isn’t the first thing you think about when looking for different types of insurance, but it’s a crucial benefit that comes with the right policy. A critical illness diagnosis can leave you with hundreds of questions, but with the right policy in place, you won’t have to ask, “How am I going to pay these medical bills?”
If you’re ready to start planning for the future and protect your family from unexpected financial strains, it’s time to explore your options for critical illness insurance. You have numerous policies and policyholders to choose from, so rather than spending hours doing your own research, let us do it for you.
Our team at Insurdinary works with the country’s top insurance providers to provide you with multiple quotes from different plans that provide the coverage you are looking for. That way, you can compare the best options in one place with the help of an experienced insurance professional. We’ll take the time to answer your questions, learn about your needs, and find policies that fit your budget and lifestyle.
With plans from top providers and affordable rates for every budget, we can help you find the right policy for your needs. When you’re ready to get the peace of mind that only critical illness insurance can provide, contact our Insurdinary experts to start getting quotes.