A heart attack, stroke or major organ failure can suddenly hit anybody. When it does, life changes in a second, at first being a struggle for survival and, if the person survives, they are faced with major expenses.
While overall fitness and health is the best prevention against one of these events, it is still a fact that in the U.S., someone has a heart-related event every 34 seconds, and someone has a stroke every 40 seconds.
Many people assume they’re fully protected with a standard health insurance plan, but the exorbitant costs of treating life-threatening illnesses are usually more than any plan will cover. Some of these extra expenses include:
- Deductibles and copays.
- Costs associated with out-of-network treatment and additional medical procedures, such as angioplasty and pacemaker implantation.
- Travel and lodging during treatment.
- Rehabilitation and home health services.
- Childcare.
- Loss of income as you take time off work to recover.
Many people don’t have enough savings or, even if they do, can be left financially devastated as the costs quickly add up. To avoid this calamity, the solution is to have a critical illness policy in place.
What a critical illness plan offers
Critical illness insurance helps supplement your major medical coverage by providing a lump-sum benefit that you may use to pay direct and indirect costs related to the most prevalent critical illnesses. Among the conditions that are typically covered are:
- Heart attack
- Cancer
- Stroke
- End-stage renal (kidney) failure
- Coronary bypass
Other serious illnesses may be covered as well, depending on the specific design of your plan.
Additional coverage options also are available to help pay for health screenings, subsequent diagnoses and cancer vaccines. One of the benefits of critical illness insurance is that the money can be used for a variety of things, such as:
- To pay for critical medical services that might otherwise be unavailable.
- To pay for treatments not covered by a traditional policy.
- To pay for daily living expenses, enabling the critically ill to focus their time and energy on getting well instead of working to pay their bills.
- Transportation expenses, such as getting to and from treatment centers, retrofitting vehicles to carry scooters or wheelchairs, and installing lifts in homes for critically ill patients who can no longer navigate staircases.
- Terminally ill patients, or those simply in need of a restful place to recuperate, can use the funds to take a vacation with friends or family.
How it works
Critical illness plans differ depending on the policy and insurance company. For a plan with a low benefit amount you would likely not have to undergo a medical exam. These are called “guaranteed issue” plans. Higher benefit amounts may require you to undergo a medical.
Critical illness policies are priced according to a schedule, which is written out in your policy. Your premium goes up every time you move into a new age range, as listed in the schedule, and some insurers even raise your premium every year.
After a certain age, usually around 65, the insurer will cut your benefit in half, which is called the “age reduction schedule.” Most policies expire when you reach age 70 or 75.
Benefits under a critical illness plan typically max out at between $10,000 to $50,000, and they are paid out in a lump sum.
Example:
Brenda suffers a heart attack and has critical illness insurance to help pay the bills while she recovers.
Immediate costs – Brenda’s employer-sponsored health insurance does not cover testing and her angioplasty procedure, but her critical illness insurance steps in to pay for them.
After recovery – After recovering, she follows her doctor’s advice and uses part of her benefit to pay for a gym membership and take a vacation to relieve stress.
Prevention – Brenda decides to start getting a yearly stress test, which is paid for by her annual health screening benefit.
