As Americans age, they are increasingly concerned about their health and the financial impact of illness. Medical debt is the number one cause of bankruptcy in the US, often because traditional health care coverage won’t cover all the expenses of a critical illness (CI).
A Harvard University study found that almost 80% of those who filed for bankruptcy had health insurance plans when their illnesses began – but likely not CI coverage. Effectively, CI coverage can help protect you against financial ruin.
What illnesses are covered?
The most common (and expensive) critical illnesses include cancer, heart attack, and stroke. But CI coverage provides increased protection for a wide variety of illnesses; policies range from those covering a diagnosis such as cancer to those that cover more than 20 conditions, ranging from kidney failure to organ transplants. Note that CI generally won’t cover chronic diseases such as diabetes.
Is CI coverage right for you?
Many Americans will become critically ill at some point in their lives. When a critical illness will increase expenses or reduce income, CI can help you maintain your current lifestyle. It will provide funds to meet your financial commitments, such as auto payments or mortgages; it can help defray the cost for treatments not covered by your health plan; and it can help you meet your deductible if you have a high-deductible health plan.
How does the CI policy pay?
Generally, critical illness coverage provides a lump-sum payment or monthly benefits upon diagnosis. Lump-sum benefits can range from $10,000 to $500,000 or more.
Discuss your eligibility for CI coverage with your agent. Many individuals will meet underwriting standards after answering a series of simple questions. With simplified underwriting, you’re not required to have medical tests or blood work. And, in cases with few medical issues, your insurance agent usually can place coverage in seven days to a few weeks.