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Are you considering purchasing critical illness insurance but remain unclear about what you'll receive coverage for? Understanding what is covered by critical illness insurance can feel overwhelming, especially when it depends on your pre-existing health conditions and the level of coverage you purchase.
Keep reading for a greater understanding of critical illness coverage inclusions, how to determine what coverage is right for you, and how to estimate what you'll pay for a policy.
Critical illness insurance pays you a lump sum to cover various expenses when you receive a diagnosis for a qualifying illness. For example, if you're hospitalized for a heart attack or have a cancer diagnosis, the policy will pay you between $25,000 and $100,000 to cover treatment, your living expenses, or even a vacation.
Like traditional insurance, you'll pay a small monthly premium based on your risk of developing a critical illness. Many people use the coverage to supplement their primary health insurance. For example, if you have a $10,000 deductible, you can use the supplemental coverage to cover those expenses, as well as provide for living expenses while you recover.
In general, critical illness coverage inclusions offer reimbursement for a minimum of three major illnesses, but you can find policies that cover up to 25 of the most common severe conditions. Most critical illness policies will cover the following issues, provided they don't qualify as pre-existing conditions.
Strokes are one of the most universally covered conditions in critical illness insurance. A stroke occurs when a clot blocks or reduces blood flow to the brain and deprives it of oxygen or nutrients. Verywell Health reports that nearly 800,000 people experience a stroke every year, and the condition caused roughly 150,000 deaths in 2019.
After a stroke, you may have trouble with memory, motor function, and speech, which will require long-term treatment like physical therapy, speech pathology, and medications. The American Stroke Association estimates the average cost of recovering from a stroke to be around $140,000. With the right health insurance, combined with critical illness coverage, you can avoid most of those costs and protect your financial security.
Heart attacks and coronary bypass surgery are two common inclusions of critical disease insurance. Heart disease is the leading cause of death in the United States, and the Centers for Disease Control report that over 800,000 people experience a heart attack every year, with about three-quarters of those including first-time heart attacks.
The Agency for Healthcare Research and Quality reports that, on average, people stay in the hospital for five days after a heart attack, with a recovery cost of around $21,500. Factor in your lost income and additional treatment, like bypass surgery, and a heart attack presents a cost most people can't cover without help.
What is covered by critical illness insurance? According to the National Cancer Institute, roughly 40% of men and women will receive a cancer diagnosis at some point in their life. Cancer presents a significant financial burden, with ongoing treatments quickly reaching over $100,000 in expenses. While some people are able to continue working while they undergo cancer treatment, many experience a significant loss of income as they take time to cover.
Most critical illness insurance policies cover cancer, and you can purchase coverage for upward of $100,000. If you have a family history of cancer or have an increased risk of developing the disease, severe illness insurance could be the safety net you require to recover from the illness without sacrificing your financial stability.
What is protected by critical illness coverage? Kidney failure is one of the most commonly included conditions, and My Cleveland Clinic reports that nearly 750,000 experience the condition every year. You have a higher risk of kidney failure if you have diabetes, high blood pressure, or have experienced an injury to your kidney.
In its advanced stage, kidney failure may require an organ transplant or a treatment called dialysis, which filters toxins out of your blood. GoodRx reports the average cost of dialysis at around $10,000 per month, and some people require the treatment for the rest of their lives.
According to the United Network for Organ Sharing, roughly 46,000 people received major organ transplants in 2023, and as of early 2024, over 100,000 people are still waiting for life-saving organ transplants. While it's true that traditional insurance covers the cost of organ transplants, it won't cover your living expenses while you're waiting for treatment or recovering.
When considering the cost of recovering from a transplant, UNOS suggests including the following expenses:
If you're at risk of needing a major organ transplant, don't rely on your traditional healthcare insurance to cover all your expenses. Thankfully, critical illness insurance provides an affordable solution for most people.
How do you know if you could benefit from critical health crisis protections? Most people could benefit from it, but it does require an extra monthly expense, so you should carefully consider whether you truly need it.
What is covered by critical illness insurance? If you have a family history of severe illness, such as cancer, heart disease, or stroke, you'd benefit from carrying critical illness insurance. For example, if you're a carrier of the mutated BRCA gene, you'll appreciate the peace of mind of knowing you have a financial safety net should you develop the condition. With the right coverage, you can focus on treatment and healing rather than forgoing the life-saving treatment you require.
In determining whether critical illness insurance is a good fit for you, consider your existing level of coverage. If you don't have health insurance, you should definitely invest in coverage for severe illness. However, also consider the following variables:
Your current health should play a significant role in whether you decide to purchase severe illness insurance. For example, if you've already received a critical diagnosis, it's likely too late to purchase supplementary insurance. If you're still healthy, now is the best time to purchase insurance, and you'll also receive lower rates while you're young.
Consider your financial stability when you're deciding which insurance coverage is right for you. Ask yourself the following questions:
If you're lacking in any of these areas, you'd benefit from at least the minimum coverage provided by critical illness insurance.
How much will you pay each month for critical illness insurance? It depends on several factors, but on average, you'll pay roughly what it costs to take a family of three out for an affordable dinner.
Your age is the biggest determiner of how much you'll pay for critical illness insurance. According to Forbes, you'll pay about eight times more for this insurance at the age of 65 than you will at 25. For example, if you purchase $50,000 of coverage and pay $50 per month when you're 25, you'll pay roughly $400 per month for the same coverage at age 65.
The other major factor in deciding how much you'll pay is the level of coverage you choose. The more illnesses you want covered and the higher payout you need, the higher your monthly payment.
If all other factors are equal, you'll pay a certain dollar amount per $5,000 for coverage. For example, imagine you're 25 and want $5,000 of coverage. You might pay around $5 per month. However, if you want $25,000 of coverage in the same situation, you'd pay $25 per month instead. These numbers are hypothetical, but give you some idea of how the pricing structure works.
Now that you know what is covered by critical illness insurance, you can make an informed decision about whether you'd benefit from purchasing a policy. If you're ready to shop for coverage, you can start the process stress-free on Insurdinary.
On our website, you can compare rates and coverage from the best providers at no cost or obligation. You deserve the best coverage for your situation, and Insurdinary can help. Shop on our website to find the best rates, or contact our team if you still have questions.