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Actions What You Need to Know About Critical Illness Insurance
A critical illness, such as cancer or heart attack, is not only a devastating physical blow, but can be a severe financial one as well. In fact, medical bills will be the cause of 2 million bankruptcies this year, making it the number one cause of bankruptcies, higher than credit-card bills or mortgages.
With statistics like these, it’s obvious that many American workers are simply not prepared for the financial effects of a critical illness. Critical illness Insurance was designed to help meet this challenge.
What critical illness insurance is, and isn’t
Critical illness insurance is not medical insurance or disability insurance. Rather, it can be used to supplement those coverages.
With critical illness insurance, when you contract an illness that is covered under the policy, you can receive a lump-sum benefit that can be spent however you like. So you could use it for co-pays/co-insurance, prescriptions, or treatments not covered by your health insurance. Or, if you or your spouse cannot work due to your covered condition, you could use these funds to help pay for day-to-day living expenses, including child care, eldercare, cleaning, shopping, or home maintenance you would normally handle on your own.
How to get critical illness insurance
You can buy a Critical Illness insurance policy on your own, but it can be costly. Generally, a more affordable option is to purchase it through your employer, union, or professional association, many of which may offer critical illness insurance as an optional benefit at more affordable rates. Contact your employer’s benefits department or look out for your employer’s open enrollment period to learn what your options are.
Illnesses typically covered by critical illness insurance
- Heart Attack
- Stroke
- Invasive Cancer
- Major Organ Transplant
- Renal Failure
- Cancer in Situ
- Coronary Artery
- Bypass Surgery
Bottom Line
Serious illnesses are not only medically difficult, they can also have a negative impact on your finances, even for those with medical insurance. Depending on your family history and chances of contracting a serious illness, critical illness insurance may help you protect your hard-earned savings, just in case.
John Renz is a writer focusing on topics related to finance and insurance. He’s also a husband, father, brother, uncle, and son, but doesn’t really make much money at those jobs.
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