Critical illness insurance covers life-threatening diseases like cancer, heart stroke, kidney failure, and others. The list of diseases will depend on the insurance policy offered by the companies.
However, there are a certain list of restrictions that may affect the policy. It is very 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 policies. But the heavy bills of life-threatening 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 for 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 people are opting for high-deductible health insurance plans, which may not be a good option if a serious illness occurs.
The costs which are not covered by the traditional insurance are covered by the critical insurance cover. These costs may include transportation costs, child care costs, among others.
Depending on a number of factors, for example, amount of coverage, age, sex, and fitness of the insured, the policy may vary. One can receive anywhere from a few thousand dollars to one thousand dollars.
Points To Ponder
- Certain types of cancer may be exempted from this policy.
- If the disease strikes back at 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 a certain age, the policy may end.
- You must read the complete terms and conditions before opting for a critical insurance policy.
Who can purchase critical insurance policy?
Anyone can purchase it individually or through their employer (voluntary benefit).
As companies know, employees feel burdened by greater expenses associated with high deductible plans. That makes it equally beneficial for the workers as well as the employer to offer such an insurance policy.
What is the minimum cost to avail critical illness cover?
These policies are not costly, especially when offered by the employer. Critical illness policies can start at $25/month. With this cost, it looks more attractive than the low-deductible health insurance cover.
But some of the experts showed concern over it. They think that you have to pay more premiums for the more disease coverage. A 25-year-old female will have to pay $40 for the $25,000 coverage with the 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%.
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 reasons. This is useful for a patient with any prolonged disease.
People with high deductible plans can add the funds to their health savings account, or flexible spending account. These two offer tax benefits for qualified expenditures.