Critical Illness Insurance vs. Medical and Disability

Workplace Benefits

How Is Critical Illness Insurance Different From Other Plans?

3 min read
Sep 04, 2020

Medical bills can be some of our largest expenses. A report by Salary Finance reveals that 32 percent of working Americans have outstanding medical debt, and 54 percent of people with medical debt have defaulted on it.

Medical insurance only goes so far in covering costs to treat a critical illness, like a stroke1 or heart attack, and disability insurance helps replace some of your pre-disability income while you recover. So, how do you pay for the expenses that medical insurance and disability insurance do not cover?

This is where critical illness insurance can help. It pays a lump sum of money directly to you to use on anything you want. Keep reading to learn more about critical illness insurance, and why it might be a smart addition to your health and financial planning.

What is critical illness insurance?

Critical illness insurance pays a lump sum of money directly to you, not to a healthcare provider, in the event of a serious illness, such as a heart attack, stroke, cancer diagnosis,2 or (in some cases) COVID-19.

That critical illness insurance payment can range from a few thousand dollars to up to $100,000, depending on the policy. The funds can go toward anything you need, like toward seeing a specialist, or if a medical insurance provider doesn't pick up the entire cost, or if rehabilitation sessions exceed what medical insurance allows. You can even use the money to pay off bills and buy food—you decide how to spend it. And while disability insurance may cover a portion of your pre-disability income while you're unable to work, you may still need extra funds to reduce financial strain on your family. That's what makes critical illness insurance worth considering.

How does critical illness insurance differ from medical insurance and disability insurance?

With medical insurance, a policyholder gets a certain amount of their medical costs paid for by the insurance company offering the plan. With disability insurance, the recipient gets a percentage of pre-disability base salary—usually up to 60 percent.

Critical illness insurance, on the other hand, offers a lump-sum payment based on the terms of your policy.  In a nutshell, this product can supplement the reduced income that occurs when you're on disability and can help cover the additional expenses that medical insurance may not cover.

How can critical illness insurance help with financial planning?

With the average American family spending up to $5,000 in out-of-pocket medical costs yearly, critical illness insurance may help provide financial support at a low cost. Plan premiums vary, depending on your age, occupation, smoking status, whether it's a single or family plan, as well as your employer’s demographics. For example, a 40-year-old female nurse could pay between $25-$30 per month for a single plan benefit of $30,000. Bonus: Premiums for employer-sponsored plans tend to be a pre-tax benefit taken out of your paycheck, which reduces your overall taxable income.

Open enrollment is a good time to consider signing up for a critical illness insurance plan offered through your employer. Take our quiz to see if critical illness insurance might be right for you.

Critical Illness Insurance

Explore employee benefits during open enrollment

In certain states, the Covered Condition is Severe Stroke.

Please review the Disclosure Statement or Outline of Coverage/Disclosure Document for specific information about cancer benefits. Not all types of cancer are covered. Some cancers are covered at less than the Initial Benefit Amount. For NH-sitused cases and NH residents, there is an initial benefit of $100 for All Other Cancer.

METLIFE CRITICAL ILLNESS INSURANCE (CII) IS A LIMITED BENEFIT GROUP INSURANCE POLICY.  Like most group accident and health insurance policies, MetLife’s CII policies contain certain exclusions, limitations and terms for keeping them in force. Product features and availability may vary by state.  In most plans, there is a pre-existing condition exclusion. After a covered condition occurs, there is a benefit suspension period during which most plans do not pay recurrence benefits, except in the case of insureds covered under a New York certificate. MetLife offers CII on both an Attained Age and an Issue Age basis.  Attained Age rates are based on 5-year age bands and will increase when a Covered Person reaches a new age band.  MetLife’s Issue Age CII is guaranteed renewable and may be subject to benefit reductions that begin at age 65. Premium rates for MetLife’s Issue Age CII are based on age at the time of the initial coverage effective date and will not increase due to age; premium rates for increases in coverage, including the addition of dependents’ coverage, if applicable, will be based on the covered person’s age at the time of the initial coverage effective date. Rates are subject to change for MetLife’s Issue Age CII on a class-wide basis.  A more detailed description of the benefits, limitations, and exclusions applicable to both Attained Age and Issue Age CII can be found in the applicable Disclosure Statement or Outline of Coverage/Disclosure Document available at time of enrollment. For complete details of coverage and availability, please refer to the group policy form GPNP07-CI, GPNP09-CI or GPNP14-CI, or contact MetLife for more information.  Benefits are underwritten by Metropolitan Life Insurance Company, New York, New York.

MetLife's Critical Illness Insurance is not intended to be a substitute for Medical Coverage providing benefits for medical treatment, including hospital, surgical and medical expenses.  MetLife's Critical Illness Insurance does not provide reimbursement for such expenses.

Nothing in these materials is intended to be advice for a particular situation or individual. These materials are for general information purposes only.