With the average life expectancy for Americans continuing to rise, insurance companies are developing more insurance products that can help them afford the expenses related to aging. First developed in 1996, critical illness insurance emerged as a response to the fact that many survivors of strokes and heart attacks faced significant medical bills that jeopardized their finances.
Here is a look at everything you need about this type of insurance.
Critical Illness Insurance Only Covers Specific Illnesses
Critical illness coverage only applies to a handful of specific illnesses that require extensive medical treatment and care and can quickly exhaust the funds available through a traditional medical insurance policy.
These covered illnesses vary from plan to plan and will be specified in the policy documents. They tend to include stroke, heart attack, some types of cancer, coronary bypass, and organ transplants.
Critical Illness Insurance Works In Conjunction With Health Insurance
Critical illness insurance is not a replacement for conventional health insurance. Suppose you are diagnosed with a critical illness. In that case, your regular health insurance plan will cover the costs of the healthcare you need, as outlined in your policy documents. Then, your critical illness will pay out a specified amount to offset those healthcare costs not covered by your insurance and other expenses, as discussed below.
The Payment Covered Is Paid In A Lump Sum
Most critical illness insurance policies provide a direct lump-sum payment that can be used for expenses not covered by other types of insurance. The payment is issued following the official diagnosis of a covered condition.
Some insurers may also offer the funds in monthly payments, so it is important to discuss the payment method with the insurer before purchasing a policy to ensure it meets your expectations.
You Can Use The Funds For A Range Of Expenses
Many insurance companies do not place any restrictions on how these benefits can be used. While many types of insurance will only cover medical bills, critical illness coverage can be used for copays, deductibles, and transportation services to and from treatments. It can even be used to pay for non-medical services needed while healing from a critical illness, such as in-home care, grocery delivery, child care, or yard work.
Some individuals may use the funds to retrofit their vehicle to accommodate a wheelchair or scooter or install a lift in their home if they cannot use the stairs. Terminally ill patients may use the funds for a vacation with family or friends.
In cases where experimental treatment is available that may help a specific illness, a covered individual may choose to use the funds to cover it.
There May Be Restrictions On Recurrences And Other Conditions
Critical illness insurance coverage does have some exceptions. For example, policies that cover cancer may not cover certain types of disease. Chronic illnesses may also be exempted. In addition, you may not be eligible for coverage if a disease recurs or you suffer a second heart attack or stroke. In some cases, coverage may end once the insured party reaches a specific age. Therefore, it is essential to read the terms and conditions carefully to ensure you get the type of coverage you expect.
You Can Obtain It Through An Employer Or On Your Own
There are several ways to acquire critical illness insurance. Many people purchase it independently, and some employers also offer it as a voluntary benefit. In some cases, it may be possible to add it to an existing personal life insurance plan.
It Is Suited To Individuals With A Family History Of Certain Illnesses
Critical illness insurance can prove to be a good investment for people with a family history of certain health conditions, such as heart disease or cancer. It can provide these individuals with some financial security should they be diagnosed with the condition. It is particularly useful to those who lack emergency funds or would be otherwise unable to handle the financial implications of an unexpected medical diagnosis.
Several Factors Influence The Cost Of Critical Illness Insurance
When purchasing an individual policy, several factors can influence the overall price. Young and healthy people without pre-existing conditions can generally expect to pay less than other individuals, but other criteria also play a role. These include gender, location, and nicotine use habits. Nevertheless, it is considered affordable health insurance, although it generally offers relatively low benefits.
Discuss Your Coverage Options With The Benefits Specialists
A major medical emergency does not have to be financially devastating. Schedule an appointment with the benefits specialists at Vector Financial Group to develop a tailored plan that addresses your concerns and budget.