Critical Illness Coverage: Frequently Asked Questions

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Monday, April 18, 2016

As we mentioned in our lead article one recommended change to our healthcare plan offerings is the addition of voluntary Critical Illness Coverage. The following is excerpted from American Association for Critical Illness Insurance website.


What Critical Illnesses are covered by critical illness coverage?

The three primary are: cancer, heart attack and stroke.

Critical illness insurance policies may also cover such conditions as:

  • Heart transplant
  • Coronary bypass surgery
  • Angioplasty
  • Kidney (Renal) failure
  • Major organ transplant
  • Paralysis


Why Was Critical Illness Insurance Created?

Critical illnesses can cause financial hardship, even if you have health insurance. The product was created in the late 1990s to provide cash at a time it was needed most. This specialized insurance provides a lump-sum, tax-free payment should a policyholder suffer from certain specific critical conditions.

Some 600,000 Americans now have this protection purchased on an individual basis or through a plan offered by their employer.


How Much Cash Can I Receive?

Cash payments can range from $10,000 to as much as $1 million. They are paid as a single, lump sum payment as soon as the individual is diagnosed with a covered condition.


Why Would I Need Critical Illness Insurance Benefits?
  • Cash to pay for medical treatments not covered by your health plan.
  • Cash to pay your mortgage while you are recovering.
  • Cash to pay bills - from car payments to insurance premiums.
  • Cash so you can travel for treatments not available locally.
  • Cash to pay for experimental treatments that are not covered by insurance.
  • Cash to replace a spouse's income while caring for the insured.


Are There Different Forms Of Critical Illness Insurance?

There is Simplified Issue Individual Protection which typically is available in amounts up to $50,000. Generally insurers will only ask a few health questions with these policies. They tend to be affordable and available from individual insurance professionals

There are Fully Underwritten Individual Plans which are available in higher amounts. Medical information will be requested by the insurer. These plans are also available from individual insurance professionals.

There are plans available through employers which are generally offered on a voluntary basis, fully paid by the employee.

There are life insurance policies that offer a critical illness insurance benefit often available as a rider to your policy.

For more information about Critical Illness Coverage, you can visit the American Association for Critical Illness Insurance.