Critical illness insurance is a form of supplemental insurance.
Before we dive into the specifics of critical illness insurance, it’s important to understand how it relates to your other forms of health insurance. As a form of supplemental coverage, critical illness insurance isn’t meant to replace your primary health insurance. Instead, the purpose is to cover expenses that are not covered by your primary health policy or Medicare—in other words, anything above and beyond what mainstream policies include.
Supplemental coverage is not required in order for you to obtain a comprehensive and effective health care plan. It’s also important to note that premium costs for supplemental plans are generally higher than what you would pay for a standard plan because this type of policy has fewer restrictions and provides greater benefits based on its specialty focus.
You’re typically covered for three critical illnesses.
Your policy will typically cover three critical illnesses. These are: heart attack, cancer and stroke. If you want to read more about each of these illnesses, check out this article on medical news today. It also goes over other conditions that may be covered by your policy such as major organ transplants and multiple sclerosis (MS).
Each policy has a list of illnesses that can be covered by it. However, the list is different for each policy so make sure to read yours carefully before signing up!
You don’t need to use critical illness insurance to pay for treatment.
Critical illness insurance can be used to pay for a wide range of expenses, not just treatment.
You can receive this lump sum payment even if you don’t treat the condition as long as it is medically diagnosed by a doctor. Use it to cover living expenses or take time off work during recovery. You may also use it to cover travel expenses (such as for out-of-town treatment), prescription drugs, childcare, home care and other medical equipment costs.
Critical illness insurance isn’t only for the policyholder.
When a policy is issued, the person who receives the contract is called the life insured. That could be you or someone you care about. But if you’re considering critical illness coverage, keep in mind that once an insurance company issues a policy to a life insured, that person can assign it to anyone they choose. This means the money from the claim can go to help whoever needs it most—it doesn’t have to go directly to the person diagnosed with cancer or suffering from a heart attack.
For example, if parents have a critical illness policy and they either pass away or don’t recover enough to work after they get sick, their children could use that money for college tuition or living expenses. Or if a spouse gets sick and can’t return to work after their treatment ends but their partner wants to take time off of work for caregiving purposes, he or she might assign some of their claims benefits over so their family has help with living expenses during this time. That way there’s less financial stress during this difficult time.
Critical illness insurance is often paid out as a lump sum.
Critical illness insurance typically pays out a single lump sum in the event of diagnosis. This is important to know because it means you’ll be able to use the money however you see fit. You can use it to pay off debt, supplement your income while you’re unable to work, or even purchase items that will help make your life more comfortable immediately after treatment (think: a new car or home).
Many policy holders also choose to use their payout for less practical purposes, like traveling or paying for childcare. The choice is yours!
There’s a chance you could be denied because of your health history.
Take heart, fellow medical-insurance shoppers. This is not the end of the world.
Insurance companies don’t reject applicants based on their health history alone—they take into account a number of factors when deciding whether or not to offer a policy. The most important ones include:
- Your age
Here are six things you should know about critical illness insurance policies if you’re thinking about buying one.
When you’re a working-class family, it can be tough to know how to handle that one thing out of the blue: a serious illness that could lead to hospitalization. One option is critical illness insurance. This policy pays out a lump sum if you have a serious illness and are in the hospital for at least three consecutive days. It’s not unusual for this coverage to be included as part of your current health insurance policy or as an add-on, but it helps another way: If you don’t want to pay your monthly premium for daycare, oncologist visits, medication costs, etc., you can instead put this money away as savings. We felt pretty good about our critical illness insurance policy until we got something from it: A cancer diagnosis.
Actually, we were thrown off by how much money was immediately available when we got our policy. Our faith in the plan was shaken when we realized how little our insurer had actually spent on hospitalizations because they’d treated the case with what amounted to protocol calls about whether I would live or die first—nothing but phone calls and some basic blood work that suggested I wouldn’t die before my thirty-something birthday (three years after getting sick).
In retrospect, we probably didn’t need basic blood tests every time there was an irregularity; it seems like they ended up paying us continually (no small amount of money) just so they could keep their self-interests in mind—keeping their bottom line healthy and safe because they had no clue whether or not I would survive into old age or become disabled by side effects of chemotherapy. Even so, they paid us $850 per month! Here’s hoping no one ever gets cancer and then suddenly finds out that their health insurance will cover them for anything more than $50/day during treatment!