Elizabeth Rivelli has nearly five years of experience covering insurance for finance publications. She has expertise in various insurance lines, including car insurance, health insurance, travel insurance, life insurance and others. In her writing, s.
Elizabeth Rivelli Insurance WriterElizabeth Rivelli has nearly five years of experience covering insurance for finance publications. She has expertise in various insurance lines, including car insurance, health insurance, travel insurance, life insurance and others. In her writing, s.
Written By Elizabeth Rivelli Insurance WriterElizabeth Rivelli has nearly five years of experience covering insurance for finance publications. She has expertise in various insurance lines, including car insurance, health insurance, travel insurance, life insurance and others. In her writing, s.
Elizabeth Rivelli Insurance WriterElizabeth Rivelli has nearly five years of experience covering insurance for finance publications. She has expertise in various insurance lines, including car insurance, health insurance, travel insurance, life insurance and others. In her writing, s.
Insurance Writer Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
| Deputy Editor, Insurance
Updated: Jun 11, 2024, 10:10am
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Health insurance policies cover a variety of treatments and services, but paying for critical illness care often goes well beyond those costs. Critical illness insurance is one supplemental insurance plan that can help pay for that care.
Critical illness insurance can be beneficial if you want an insurance payment above and beyond what a standard medical insurance policy pays.
Key Takeaways
Critical illness insurance is a form of supplemental health insurance that provides coverage for expenses that your health plan doesn’t cover. The purpose of critical illness insurance is to provide a monetary safety net in the event of a medical diagnosis that could result in expensive treatments or other financial hardships.
You can generally get critical illness insurance through an employee benefits program at work or by buying an individual policy on your own.
Critical illness insurance kicks in after you’ve been diagnosed with a critical illness that the policy covers, such as cancer. You’ll typically get a lump sum, such as $25,000 or $50,000, when you’re diagnosed with a critical illness.
You can use the money for any reason. That may include:
Supplemental critical illness insurance works differently than a traditional health insurance plan. Your regular health insurance plan covers the costs of your healthcare. If you’re diagnosed with a critical illness, you can also file a claim with your critical illness insurance company. Your critical illness insurance company provides a lump sum payout up to your policy’s coverage limit.
Critical illness insurance can be a good investment for people with a high deductible health plan and large out-of-pocket health insurance costs. Or, if you have a family history of certain health conditions, like cancer or heart disease, critical illness insurance can provide financial peace of mind that you will get financial help if you’re diagnosed with the condition.
Because critical illness insurance offers coverage for a wide range of conditions, it can also be beneficial for people who don’t have an emergency fund or are concerned about the financial consequences of an unexpected medical diagnosis.
Critical illness insurance provides benefits if you get diagnosed with a qualifying medical condition. The illnesses covered by a policy vary depending on your plan.
Here are some of the critical illnesses that are usually covered under this type of insurance:
Make sure to dig into the coverage for a policy. Critical illness insurance policies can vary. For instance, some plans cover Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig’s Disease) and hearing loss, while other policies don’t cover those health issues.
Most critical illness plans don’t cover pre-existing conditions that were diagnosed before the policy was purchased.
For example, your critical illness plan may not provide benefits if you were diagnosed with coronary artery disease before getting critical illness insurance and later needed bypass surgery.
Check your policy for specific exclusions, but a critical illness insurance policy generally won’t cover:
The cost of critical illness insurance is largely dependent on the coverage amount, as well as your health, age, gender, nicotine use and how you get coverage, such as through an employer or an individual plan you buy yourself.
For instance, a 30-year-old nonsmoker may be eligible for an employer-sponsored critical illness insurance policy for $1.64 per month for every $5,000 of coverage from Protective. That would mean you would pay about $8 a month for $25,000 worth of coverage. That same $25,000 policy may cost you $12 per month for a 40-year-old and $19 for a 50-year-old.
In most cases, you can expect to pay lower rates for an individual critical illness insurance if you are young and healthy, with no pre-existing conditions.
