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Critical Illness Insurance: is it Worth it?

critical illness insurance
April 15, 2020

In today’s world, most people have heard of and may have standard health insurance. Whether you purchase it through an employer or on your own, you probably have some health coverage. Did you know, though, that there is another type of health insurance that may help cover the costs associated with major medical emergencies, such as heart attacks, strokes, and cancer?

When experiencing a major medical emergency, not only is it a traumatic time in your life, it may also create a financial burden that can seem insurmountable. Developed in 1996, critical illness insurance helps to cover some of those costs that standard health insurance may not cover.

Let’s take a deeper look into critical illness insurance – what it is, how it works and if it’s worth it.

critical illness insurance

Critical illness insurance basics

We’ve already given a brief overview of critical illness insurance, but let’s go a little further. Critical illness insurance, also known as critical care insurance, provides the insured with a lump-sum cash benefit to assist in covering the costs of a medical emergency or other serious illness. The policy may also be set up to make multiple payments based on the policyholder’s medical treatments and condition.

As with most types of insurance, there may be exceptions to coverage; for example, chronic illnesses and some types of cancer may be excluded. Senior citizens should be careful when looking to purchase this type of policy. There may be limits for payouts based on age, or something called an “age reduction schedule”, which means the payout shrinks as the policyholder gets older. Additionally, critical illness insurance may pay for non-medical costs that are typically not covered by standard health insurance, such as transportation, childcare, or groceries.

Cost of critical illness insurance

Many factors come into play when figuring out the cost of critical illness insurance.  It’s helpful to consider two things before purchasing critical illness insurance: the amount of payment you want to receive and the illnesses that will be covered.

The cost of a policy will depend on these two things, your age, if you smoke, your overall health, the carrier who issues the policy, and some other factors as well.

Is critical illness insurance worth it?

No one wants or expects to become critically ill or to see a loved one suffer from a critical illness. However, making sure you’re prepared ahead of time can make dealing with these serious illnesses much less stressful.

According to CNBC, of the people who file for bankruptcy, two-thirds of them say that medical issues and medical bills are the reason for the filing. If you have a family history of any of the illnesses that may be covered by critical illness insurance, it’s definitely something to consider purchasing.

Ultimately, you must weigh the cost of insurance with what you may pay out of pocket. If you can’t afford to pay out-of-pocket costs, then critical illness insurance coverage may be what you need.

The bottom line.

The decision to purchase or not purchase critical illness insurance can only be made by you. Do your research and make sure to shop around for policies from different carriers and with different limits that will fit your needs.

If you have questions, we’re here to help. Visit our website today for more information on critical illness insurance or to get a quote.

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