Critical Illness – How Do You Pay For The Out Of Pocket Costs And Unexpected Expenses?

Do you have a plan in place for how you’d cover your expenses if you were to be diagnosed with cancer, have a heart attack or stroke, or need dialysis because of end stage renal failure?  Your health insurance is a good safety net for covering your medical bills, but even that has gaps.  Over the years, deductibles and out-of-pocket amounts have steadily increased, and savvy health insurance consumers usually know that the best way to lower their premiums is to choose a higher deductible.  But the reality of those high deductible medical bills can be a major hurdle, especially when they’re accompanied by an extended absence from work due to a serious illness.  Even if you’re able to continue working and have good health insurance coverage for direct medical costs, there are usually additional costs associated with a significant critical illness:  transportation and lodging if you opt to see a non-local specialist, in-home healthcare and assistance during the recovery period, experimental treatments that aren’t covered by health insurance… and the day-to-day things that we often forget about until faced with a situation where our health prevents us from doing the things we normally do:  cleaning the house, taking care of young children, preparing meals, etc.

A critical illness policy can be the perfect supplement to your health insurance policy, or you can buy a stand-alone policy if that better fits your needs (for example, if your employer offers health insurance but not critical illness coverage).  A critical illness policy is designed to pay you a lump sum of cash when you need it most:  If you’re diagnosed with one of the critical illnesses covered by the policy, you’ll get a payment from the insurance company that you can use for whatever expenses you have.  It’s independent of your regular health insurance coverage, so you can use it to cover deductibles and copays and other out-of-pocket medical expenses, or you can use it to pay for a housekeeper and additional childcare while you’re going through chemotherapy – it’s up to you.

Critical illness plans are available with a wide range of benefit amounts, and the prices are surprisingly affordable.  You might find that you can add critical illness coverage to your health insurance policy for a small fraction of the health insurance cost.  If you are later diagnosed with a critical illness that’s covered on your plan, you won’t be scrambling to figure out how to pay your deductible and all of the unexpected costs that inevitably go along with a critical illness.

As with any insurance policy, you’ll want to read the fine print before you purchase a policy.  Most plans come with an option to add hospital indemnity coverage, often available in incremental amounts and payable for each day that you’re hospitalized with one of the plan’s covered critical illnesses.  All critical illness plans have specific illnesses and injuries that are covered, and payout is often linked to the severity of the illness.  For example, metastatic cancer might result in a 100% payout, whereas a cancer that has not yet spread would result in a smaller percentage payout.  Or a heart attack would result in a higher benefit amount than heart bypass surgery.  The details vary from one plan to the next, as do the premiums.  The premiums are significantly lower than health insurance coverage, which makes adding critical illness to your health insurance policy – or purchasing a stand-alone CI policy – an easier decision. Like health insurance, critical illness premiums can increase over the years, so it can be a good idea to compare your critical illness policy periodically.

Comparing the Critical Illness Benefits of Three Top Carriers

Benefit Feature	Loyal American / Cigna	Assurant	Humana
Covered Conditions – Full	Category 1:  Cancer Category 2:  Heart Attack, Stroke, Major Organ Transplant – Heart Only, Category 3:  Major Organ Transplants (excludes Heart), End Stage Renal Failure, Coma, Paralysis, Blindness, Severe Burns	Blindness Coma Deafness End Stage Renal Failure Heart Attack Invasive Cancer Loss of Limbs Major Burns Major Organ Transplant Stroke	Vascular:  Heart Attack, Heart Transplant, Stroke Cancer:  Invasive Cancer or Malignant Melanoma – first diagnosis Other Illnesses:  Coma, End Stage Renal Disease, Loss of Sight, Loss of Speech, Major Organ Transplant (Heart not included), Paralysis
Covered Conditions – Partial	Category 1: Carcinoma in Situ Category 2: Coronary Artery Bypass Surgery, Aortic Surgery, Heart Valve Replacement / Repair Surgery, Angioplasty	Advanced Alzheimer’s Cancer That Has Not Spread Coronary Art Bypass Gaft Heart Valve Surgery	Vascular:  Coronary Artery Bypass Cancer:  Carcinoma in Situ None
Payment Structure	Will pay 1 Full Benefit from Each Benefit Category   180 day Separation between Category	1 Full Payment – Rider terminates after payment	Will pay 1 Full Benefit from Each Benefit Category – Vascular, Cancer, Other
Waiting Period	30 Days – Cancer only with a reduced benefit	90 Days – Cancer 30 Days – All Other	30 Days – All conditions
Benefit Reduction	None	None	50% at Age 70
Renewability	To Age 75	To Age 65 10 or 20 years	Life
Pre-Existing	12 months	12 months	12 months
Issue Ages	18-59	18-59	0 – 69

If you have any questions about critical illness coverage or if you’d like to get quotes for purchasing a plan, please contact us.  As always, there’s no charge for our services, and we’re happy to help.