If you’re diagnosed with a critical illness, you need a financial safety net to help pay expenses and keep you out of debt. That’s where critical illness insurance comes in.
These supplemental policies provide cash payments to cover health care costs such as deductibles and copayments, travel costs for treatment, mortgage payments and child care.
1. Covers medical expenses
The costs associated with a life-threatening illness can be devastating. Even with health insurance, you can find yourself saddled with medical bills, lost income, and other expenses that may be difficult to afford. A critical illness policy can provide a lump sum payment that helps pay for some of these expenses so you and your family can focus on getting better. You can purchase a critical illness policy on your own, but many employers offer it as a voluntary benefit. You can also add it to your current life insurance policy as a rider, which can be more affordable.
The type of conditions covered by a critical illness plan will vary by policy. However, most plans will include coverage for cancer, heart conditions, and organ damage. In addition, some policies will cover the cost of a transplant or dialysis. The lump sum amount paid out by a critical illness policy can be used to cover the cost of your treatment or help pay for your mortgage, car loan, or other expenses that are associated with an illness.
Depending on the severity of your condition, you can use a lump sum from a CI policy to pay for doctors’ consultation fees, medicines, room rent, and pre- and post-hospitalization expenses. If you have outstanding debt, a CI payout can also help you clear your EMIs and reduce your financial burden.
It is important to consider the coverage of a CI policy before purchasing it. The premiums for a CI policy are typically tax-deductible, which can make the lump sum payout more affordable for those on a budget. However, it is essential to review your existing health insurance and disability insurance before adding a supplemental policy that will pay out if you are diagnosed with a severe illness. This will ensure that your supplemental coverage does not overlap with what you already have. In addition, some CI plans exclude chronic illnesses such as diabetes, which your existing health insurance might already cover. This could be a waste of money and could be better spent on a broader health or life insurance policy.
2. Covers loss of income
You may already have health insurance, but that doesn’t mean you’re fully protected from financial hardship if you get sick. A critical illness plan is an excellent way to fill the gaps left by out-of-pocket costs that aren’t covered by your regular medical plans, such as deductibles and co-payments. You can find individual critical illness policies, as well as group plans offered through your employer.
Unlike disability insurance, which pays out only if you’re unable to work, a critical illness policy will pay out in the event of an illness that is covered by your plan. The lump sum of money you receive can be used however you like. It could help with your living expenses while you recover, cover the cost of any adjustments to your home you need to make for your condition, or even pay off debt.
A key benefit of this type of coverage is that it doesn’t require you to prove you can’t or won’t be able to work, as you would with a disability insurance policy. You simply have to be diagnosed with one of the conditions covered by your policy.
As a result, the cost of a critical illness policy is significantly lower than a disability policy. This is one reason that more and more companies are offering it as a part of their employee benefits packages.
In fact, according to the Society for Human Resource Management, more than 25 percent of employers now offer group critical illness insurance as a part of their employees’ healthcare options.
This type of coverage also helps offset the cost of high-deductible health plans that many workers are choosing to sign up for, as they worry about how much out-of-pocket healthcare costs might be if they have to pay them themselves.
If you’re considering a critical illness insurance policy, be sure to compare rates and read the fine print carefully. You want to be sure you are getting the best deal possible. You can do this by checking prices online or contacting an independent insurance agency. They can provide you with quotes from several different insurance providers and help you decide which plan is right for your needs.
3. Covers travel expenses
Thanks to medical advances, more people are surviving serious illnesses, but the treatment for these conditions can be expensive. Unlike traditional health insurance, which usually only pays out once you have been diagnosed with the illness, critical illness insurance provides a lump sum payment upon confirmation of the condition. This money can be used to cover expenses such as co-pays, deductibles, travel expenses and nonmedical costs like housing or transportation. It can also help with bills and household expenses so you can stay on track with your financial goals while you focus on getting better.
One of the most significant costs associated with a critical illness diagnosis is travelling to receive treatment. Depending on the policy, your lump-sum benefit may cover a portion of your travel costs to and from your destination. This is especially helpful if you live far from a specialist or have to travel for experimental treatment. In addition, some policies even cover airfare for the caregiver and family members that accompany you to your treatment.
A lump-sum critical illness benefit can help pay for durable medical equipment (DME) you may need to live with your condition, such as wheelchairs and oxygen tanks. This is important because medical insurance only covers certain items that are deemed medically necessary, and it excludes things that are merely conveniences or comforts.
In addition to DME, a critical illness payout can help with other necessary expenses, such as the cost of hiring a home care aide. This person can help you with daily tasks, run errands, cook meals and drive you to appointments. It can be a great relief to know you have someone to help out and can keep up with your financial obligations.
During open enrollment, take the time to consider your personal finances and consider your potential for a critical illness. Talk to your Colonial Life benefits advisor for more information about the types of illnesses covered in each plan and how they could help you reach your financial goals. And remember, you can always buy additional coverage if your current plan doesn’t offer the right protection for you.
4. Covers funeral expenses
With medical advances, people are surviving serious illnesses like heart attacks and strokes, cancer, and other diseases longer than ever before. However, the bills from these illnesses can be overwhelming and cripple a family’s finances. Especially with high-deductible health insurance plans becoming more popular, critical illness coverage can help fill in the gaps. This type of insurance pays a lump sum when the policyholder is diagnosed with a critical illness. The money can be used for anything from paying for extra time off work to covering transportation costs and child care. It can also cover out-of-pocket expenses such as deductibles and co-pays.
In addition to paying for treatment and lost income, a critical illness payment can be used to pay off debts and mortgages, or to supplement other forms of insurance such as disability or life insurance. This can give peace of mind to the policyholder and their loved ones.
A good critical illness policy should include coverage for a wide range of serious illnesses, conditions and circumstances. In order to find the best policy, it is important to compare the options available to you. Some insurers may exclude certain illnesses or require a medical exam before the policy is issued, while others do not. It is also important to consider whether the premium is reviewable, as it could increase over time.
Lastly, the policy should specify how and where the benefit will be paid. Some policies pay the benefits directly to the insured, while others have beneficiaries who will work with the insurance company to claim the funds. This is an important consideration because some families may not be able to afford funeral costs, or they may prefer the money to go towards their other financial obligations.
If you are interested in purchasing critical illness insurance, contact your local independent agent for more information. You can also compare rates online to find the best option for you.
