Critical Illness

Life-changing medical conditions such as heart attacks, strokes, and cancer can strike suddenly and without warning. Such unfortunate events can not just put you out of work and take away your income, but can also incur extremely high, out-of-pocket healthcare costs to you and your family. The American Association for Critical Illness Insurance showed that almost two-thirds of bankruptcies were due to unaffordable medical expenses; despite the fact that 78% of those filing for bankruptcy had health insurance.⁶ Critical illness insurance can protect you from unnecessary financial burden due to a terrible and sudden health affliction.

6. National Critical Illness Risk Assessment Study, American Association for Critical Illness Insurance

What is covered under critical illness insurance?

Policies may pay out benefits in the event the following occur:

• Acute coronary syndrome (heart attack)
• Need for angioplasty (stent placement) or coronary artery bypass grafts (cardiac surgery) due to coronary artery disease
• Stroke
• Kidney failure requiring dialysis
• Cancer
• Permanent paralysis or coma due to accident covered in policy
• Loss of eyesight, speech, or hearing
• Organ transplantation
• HIV/AIDS

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How does critical illness insurance work?

Critical illness insurance policies pay out a specified lump sum benefit should a confirmed diagnosis of a medical condition (covered under the policy) occur to the individual.

Benefit dollars can be used toward:

• Mortgage and loan payments
• Out-of-pocket medical costs
• Rehabilitation and therapy
• Child and nursing care

Why should I purchase critical illness insurance if I already have health insurance?

• Deductibles and co-insurance payments for critical medical conditions can add up to tens of thousands of dollars, which could bankrupt an individual/family
• Health insurance will not pay for other monthly costs, such as mortgage, utilities, car loans, insurance premiums, etc.
• Health insurance may not cover out-of-state/out-of-network care should one need to seek alternative physicians

How much does critical illness insurance cost?

Premium costs may depend on your current health condition and habits (particularly tobacco use will increase premium costs).

Cost may also depend on the amount of lump sum cash benefit paid out. The payout benefits are usually anywhere from $10,000 to over $50,000.

What is a survival period?

The survival period is the number of days that must elapse following the diagnosis of a covered critical illness before any benefits can be paid to the policyholder.

If the policyholder dies before the survival period has completed, then the policyholder or specified beneficiaries will not receive any pay out of benefits. Some policies may offer a Return of Premium, which pays out the premium paid into the policy in the result of death. However, there are exclusions that are specified in the policy and the death cannot be a result of these specified exclusions.

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