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What is critical illness insurance?

What is critical illness insurance?

Critical illness insurance is the cover against the life-threatening diseases like cancer, heart stroke, kidney failure, and others. The list of diseases will depend on the offered insurance policy by the companies.

However, there are certain list of restrictions that may affect the policy. It is very much important to know about those hidden terms and conditions in your critical illness insurance policy.

A lot of us think that we are fully covered by standard health insurance policy. But the heavy bills of life taking diseases are usually not covered by any such standardized health insurance policy.

What actually is critical illness insurance?

In the era of 1996, critical insurance was created. People felt the need of this after being bankrupt due to the medical bills of life-threatening diseases’ treatments.

With the good health insurance, even a single critical disease may prove to be a fatal for financial resources – said the CFP Jeff Rossi of Peak Wealth Advisors LLC.

It provides cover for the following deadly health issues:

  • Cancer
  • Heart Attack/Stroke
  • Organ Transplantation
  • etc.

If you lack emergency funds or Health Savings Account, These illnesses may ruin you financially as well as socially.

But, some of the people are opting high deductible health insurance plans, which may not be a good option if the serious illness occur. The costs which are not covered by the traditional insurances are covered by the critical insurance cover. These costs may include transportation costs, child care costs among others.

Depending on the number of factors for example, amount of coverage, age, sex and fitness of the insured, the policy may vary. One can receive from few thousand dollars to one lac dollars.

Points To Ponder

– Certain types of cancer may be exempted from this policy
– If the disease strikes back to you, you may not be covered. For example (second heart stoke/attack)
– Critical insurance coverage might end for certain age group people. For example if anyone reaches to certain age, the policy may end.
– Must read the complete terms and conditions before opting for critical insurance policy

Who can purchase critical insurance policy?

Anyone can purchase it individually or through your employer (voluntary benefit). As the companies know, employees feel burdened about greater expenses with high deductible plans. That makes it equally beneficial for the workers as well as employer to offer such insurance policy.

What is the minimum cost to avail critical illness cover?

These policies are not costly, especially when availed by the employer. Critical illness policies can start from $25/month. With this cost, it looks attractive then the low deducting health insurance cover

But, some of the experts showed concern over it. They think that, you have to pay more premiums for the more diseases’ coverage. A 25 years female will have to pay $40 for the $25,000 coverage, with cancer only plan.

Do companies really pay back the insurance premiums?

It should be noted that these policies do not guarantee the payments. One typical company disclosed that with its critical insurance policy, the benefit ratio is 60%.

What are the possible alternatives?

There are numerous other alternatives where you do not need to face all these restrictions. “Disability Insurance” helps when you are unable to work due to sickness or medical reason. This is useful for a patient of any prolonged diseases. People with high deductible plan can add the funds to the Health Savings Account, or Flexible Spending Account. These two offer tax benefits for qualified expenditures. not perfect.

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