Why You Need Critical Illness Insurance and How it Works

Mary, a single mother, is unexpectedly diagnosed with cancer and starts chemotherapy. She has voluntary benefits coverage, but it only starts paying after she pays her $1,000 deductible though, and gets stuck with paying for unexpected costs such as driving to and from the hospital for chemotherapy, and other medical visits. Not to mention any other additional expenses like paying for childcare while she’s in the hospital.

Even though her situation doesn’t sound easy, it has a happier ending than you might think. Through the voluntary benefits plan offered by her employer, Mary has critical illness insurance included in that coverage. Her critical illness coverage pays her a lump sum of money that she can spend however she needs, and the sudden diagnosis with cancer won’t sabotage her children’s college fund or her retirement planning.

Critical Illness Insurance Actually Pays for Expenses not Covered by Medical Insurance

In the U.S., the average medical insurance deductible is $1,215, and paying that alone can make it difficult to deal with the costs of any serious health event that may suddenly arise, even if you have traditional health care coverage. Typically offered through employers, this benefit was specifically designed to meet the needs of families and individuals who may be faced with a similar situation such as Mary’s.

You can’t be expected to foresee any critical illnesses like cancer, or heart attacks happening in your future, but you can prepare for potential financial impacts. You can help ease the financial stress often associated with these types of unforeseen health issues through critical illness insurance by using the lump-sum payment however you see fit.

Types of Illnesses Covered

Make sure you read your benefits coverage carefully when choosing your health insurance provider since policies do vary. There are certain illnesses that may or may not be covered. Your policy provider will be able to tell you what qualifies and what doesn’t. If you don’t understand what’s covered, be sure to ask a lot of questions so that you’re 100 percent clear. It’s also beneficial to shop around and compare critical illness polices (if possible of course).