If you or your spouse were to get a serious illness, could you cover out-of-pocket costs, experimental treatments, childcare, and other daily expenses that may not be covered by your medical insurance? Research shows that 100 million adults have outstanding medical debt, and 12% percent of them owe $10,000 or more.1
One way you can help protect your family’s finances is with critical illness insurance.
What is critical illness insurance and how does it work?
Critical illness insurance is a type of supplemental health insurance that offers a lump-sum payment that can be used to cover unexpected expenses resulting from a life-threatening or life-altering diagnosis.
When a person is diagnosed with a critical illness covered by their policy, they’ll typically receive a payment to use toward anything from medical bills to other expenses like childcare, groceries, or a mortgage.
If your employer offers critical insurance as an employee benefit, you can enroll through them or you can buy an individual policy on your own.
3 reasons to consider enrolling in critical illness insurance
Critical illness insurance can provide fundamental financial support to you or your family when you need it most. Here are some of the most common advantages of having critical illness insurance.
1. It can help cover expenses that medical insurance may not
Medical insurance may only cover a portion of the expenses associated with treating a serious illness. Plus, additional costs that often come with recovering — like childcare, transportation, and grocery delivery — may be left up to you. Critical illness insurance can provide funds to help you pay for unexpected costs.
2. It pays a lump sum directly to you
One of the benefits of critical illness insurance is that it pays a lump sum directly to you for covered conditions — not to healthcare providers. You can use the money on anything you need, including household expenses, medical payments, or personal needs for you and your family.
3. It covers a range of serious illnesses
Depending on your plan, critical illness insurance often provides a payment for conditions including heart attacks and strokes, as well as diseases. For a full list of what your plan covers, make sure to consult your policy, as coverage can vary. No one wants to think about getting sick, but it’s important to realize that these types of illnesses can happen, and it’s best to be prepared as possible.
Why may critical illness insurance be a good fit?
Having critical illness insurance can bring you and your family some relief if you're faced with unexpected expenses from an illness.
Consider the following situations where purchasing critical illness insurance may be worth it:
- Your employer offers it at a low cost.
- You or a family member has a history of health issues or are suddenly diagnosed with a critical illness.
Do I need critical illness insurance if I have a savings account?
Having a rainy-day savings account is another way to help prepare for unexpected medical costs and serious illnesses. But according to a Bankrate study, only four in 10 Americans have enough in their savings to comfortably afford an emergency $1,000 expense.4 This is where something like critical illness insurance can come in handy to help you cover unanticipated expenses. If you want to assure all your bases are covered, it’s a good idea to have both a savings account and a supplemental health insurance plan at your disposal.