Purchasing health insurance is part of leading a healthy lifestyle. But do you need critical illness insurance? Here’s a guide.
Nearly 3 million people pass away in the United States every year. Many of them do so at the hands of a critical illness like heart disease or cancer.
When people develop such diseases, most have health insurance that can help get them the quality of care they need to improve their outcomes. What many don’t know is that using standard insurance to combat serious situations might not provide them with the assistance they need to get by.
That’s where critical illness insurance comes in.
In this post, we outline not only who can benefit from critical illness insurance but other key facts regarding this kind of coverage. Our hope is that by reading our brief guide, you’ll have a better grasp on whether or not this insurance coverage is right for you.
What Is Critical Illness Insurance?
Before we hop into who critical illness insurance is great for, it’s important to understand its value proposition.
Critical illness insurance is an additional policy that people can stack on top of their existing coverage. This policy aims to pay out cash for standard insurance shortcomings you might experience when dealing with particularly expensive, life-threatening issues.
For example, if your insurance required a 20% deductible on a $100,000 procedure connected to a heart attack, your critical illness insurance might help you with that $20,000 you’d need to come up with out-of-pocket.
How Helpful is Critical Illness Insurance?
Given critical illness insurance’s relatively low cost (around $25.00/per month), the coverage creates low-risk, high reward conditions.
When you think about how much the average cost of chemotherapy is, around $48,000 per year, and compare that to your insurance deductible, you can decide for yourself whether or not a supplementary plan is needed.
Bottom line, people who have robust primary insurance plans that cover 100% of catastrophic illnesses wouldn’t benefit from critical illness insurance. Those that don’t have robust primary plans would. They might also find that a basic health plan plus critical illness insurance is cheaper than purchasing a robust primary plan.
What Are the Plan’s Downsides?
Like most insurance policies, critical illness insurance is not without its downsides. It’s important to be aware of drawbacks connected to any insurance policy so you don’t find yourself with less coverage than you had anticipated when adversity strikes.
Here are a few cons worth noting:
Relative Obscurity
While supplementary plans for critical illnesses have been around since the late ’90s, they’re not popular. That can make discussion of the merits of these plans with a physician or a confidant hard.
Fortunately, there is plenty of online literature on the subject.
The Need to Manage Two Providers
Critical illness insurance is generally used as a supplement to a primary insurance plan. Consequently, when you contract and are managing a serious illness, you’ll need to collect payments from two separate providers.
Insurers are in the business of avoiding paying out claims. That could make filling out lengthy forms and connecting with agents across different channels a headache.
It Only Works in Certain Situations
What your definition is of a critical illness and what your provider’s definition is may differ. The good news is that your insurance will spell out the limited amount of health issues it’ll help with. These issues include cancer, heart attacks, and organ-related issues, among a handful of other things.
Who Needs This Kind of Insurance?
Now that you have a grasp on what critical illness insurance is and the value it can provide, you might already have an idea of who could benefit from it. To help get the wheels turning in your head a little faster, our team has a couple of examples of what buyers of these policies might look like.
They include:
Elderly Patients on Fixed Incomes
The older you get, the more prone to serious illness you are. Couple that with the fact that as an older adult, you may be on a fixed retirement income. At that point, it becomes clear that managing expenses associated with things like cancer could be catastrophic.
Critical illness insurance represents a valuable lifeline in these situations.
People That Want to Be Covered in All Conceivable Cases
Young or old, nobody wants to be hit with unexpected medical bills. Seeing as how critical insurance hovers around just a few dollars per month, this kind of coverage can easily provide peace of mind to all people. That includes those that are unlikely to manage a serious disease.
Photo by Andrea Piacquadio from Pexels
After all, you never know when adversity might strike.
Where Can This Policy Be Bought?
If you’re interested in getting critical illness insurance, you can usually find it through a local insurance broker.
Some healthcare plans will offer this service as an add-on to their standard coverage. In other cases, you’ll buy critical illness insurance off of a third-party seller, some of whom will specialize in selling it.
A Critical Illness Can Bankrupt You
Medical-related debt is the number one source of bankrupting individuals. Many of those medical bankruptcies are the result of debilitating illnesses.
Critical illness insurance creates conditions where no matter how hard your health journey gets, the money you need to get well again will never run dry. In our opinion, that’s a benefit worth buying into as nothing is more worth preserving resources for than your health.
If you’d like to learn more about insurance policies/health, check out more content on our blog. We update our catalog regularly and always feature quick reads that’ll fulfill your need to know!
Feature Photo by LOGAN WEAVER on Unsplash
