How to Buy Critical Illness Insurance
The last time I had insurance, it was through my job. The company paid a certain amount of money to cover all medical expenses, including any surgery or hospitalization. It worked if I needed an appendectomy or to get an MRI for a broken leg, but when I got sick… that’s where things got tricky.
I was stuck with the out-of-pocket costs as opposed to being covered by my employer’s insurance plan. Those costs totaled almost $10,000 over the two years that I was on the policy, and I only received about $1,500 in payouts, which is not even enough for me to cover one month of prescription drugs!
That’s why it makes sense to buy your own critical illness insurance from a company that offers the best coverage and payouts—and search for those companies online before you purchase your policy.
Critical illness insurance is affordable.
When compared with other types of insurance, the cost of critical illness coverage is relatively low. For example, a typical family spends around $2,000 per year in health insurance premiums—often with a high or even unlimited deductible. Critical illness insurance typically costs around $25 per month for every $10,000 in coverage.
Critical illness policies are generally affordable and cover four to six major illnesses (heart attack, stroke, coronary bypass surgery, cancer and kidney failure). The average policy pays out between $10,000 and $20,000 upon diagnosis of an eligible condition.
The cost of critical illness coverage varies based on your age when you purchase it as well as where you live. It also varies depending on whether you buy a policy that covers just one major condition (like cancer) or multiple conditions (the most common being heart attack/stroke and cancer).
Employers are increasingly offering critical illness coverage as part of their benefits packages.
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Critical illness insurance is a “living” benefit.
Since we all have our own health care plans, we have to be careful when selecting someone else’s insurance. We chose a critical illness insurance plan for my mother because it will help her get the best treatment possible and pay for long-term hospitalization if she needs it. But before we buy an insurance plan for you, it’s important that you ask yourself a few questions:
- Are you in good health? If your answer is “no,” you may not want to get any kind of insurance until your condition improves or is under control.
- Do you know what your family members’ health conditions are? Many people find out too late that they don’t qualify for critical illness insurance.
- Do you know what providers your doctor uses? Some doctors are specialists and charge more than others, which means higher premiums.
Insurance companies require you to meet certain conditions before they pay out money due to a critical illness.
Getting critical illness insurance requires getting a medical exam, and the company will likely ask you to provide a detailed family history and disclose any medications you are taking. The company may also ask about your current or past use of alcohol, tobacco, or drugs. Your doctor can help you prepare for the physical by providing information on your health and by reviewing your medication list with you.
How to Buy Life Insurance With a Critical Illness Stipulation
It is possible to purchase critical illness insurance as a rider on a life insurance policy. But be aware that you will have to pay a separate premium for the critical illness rider, in addition to your premiums for the main life insurance policy. If you already have a life insurance policy and want to add this rider, you can do so by contacting your agent.
Most providers don’t pay for all medical conditions.
In some cases, the insurance company doesn’t make any distinction between critical illness and other conditions. If a patient has a medical condition that is not covered by the policy, they will expect their health care providers to pay anything out of pocket that’s left over after the insurance covers its share.
Luckily, there are still ways to insure yourself against medical expenses. Most major carriers offer a Critical Illness (or Critical Illness Only) policy, which pays for a defined set of illnesses only—including acute heart attack, stroke and other forms of heart disease; cancer; and organ failure or transplantation.
Provide information that doesn’t make sense.
My wife and I were recently diagnosed with cancer and got our “official” insurance card in the mail. It’s a hard card to read—it looks like a credit or debit card, but it has a bar code on it. Before my wife even got hers, she asked me how we were supposed to figure out who covered us if we ever needed to make a claim. There are two questions on the card: (1) Is this you? and (2) Are you covered?
What we discovered was that it’s not easy to find reliable information when you’re dealing with an illness that could result in death from something like cancer. My first approach was to call Health Republic of Washington, one of the companies my wife had decided to use for her insurance policy, which is based in Seattle. I took down the person’s name who I spoke with on the phone, then called back two days later and told him he was wrong because I hadn’t been out of work since April 1st. The right thing happened afterwards: a real human being took my call and said they’d look up their records and get back to me soon.
My advice is this: before you buy your policy—especially if your coverage is dependent upon being sick as shit—ask for some kind of written confirmation from the company about what exactly they cover. My other advice is that if you end up needing medical treatment for something that isn’t included in your policy (or you have a pre-existing medical condition), buy additional coverages from another company quickly so that no huge expenses come due after your plan doesn’t cover them anymore.
It’s best not to buy critical illness insurance from a company that offers policies that don’t cover many of the major illnesses associated with such plans.
Make sure you know what a plan covers and what it doesn’t. Many plans don’t cover some of the major illnesses associated with such plans, such as cancer, heart attacks and strokes. Some may not even cover Alzheimer’s disease or dementia. In order to protect yourself from buying coverage that doesn’t cover anything you need, it’s best to do your research before making a purchase.