Because of advancements in medicine, people are now living longer. Yet, each day 4,000 people are diagnosed with cancer, 2,100 have a heart attack, and 2,000 people have a stroke. According to the MetLife Financial Impact of Critical Illness Study, a person diagnosed with a critical illness can reduce a family’s income by more than $12,000 in just the first year. This is due to loss of wages, deductibles, co-pays, uncovered prescription drugs, and other out-of-pocket costs.
Critical illness insurance provides a person funds when they are diagnosed with a covered illness. The payment typically ranges from $10,000 to as much as $1 million. This money can be used for anything, not just medical expenses.
Many people use it for:
- Co-pays and deductibles
- Prescription drug co-pays
- Experimental treatments
- Mortgage and rent payments
- Utility payments and household bills
- Out-of-network treatments
- Childcare bills
- Car payments
- Travel to treatment centers or out-of-network doctors
Of the full-time employees surveyed by MetLife, 46% have less than $5,000 in savings and more than half of those have under $500. Many people are surprised that medical coverage may not cover all the needs of a critical illness. Critical illness insurance helps close the gap between medical insurance coverage and paying for a critical illness.
Policies may be covered but are not limited to:
- Heart Attacks
- Kidney Failure
- Alzheimer’s disease
- Multiple sclerosis
There are different types of premiums offered with critical illness insurance; guaranteed, reviewable and renewable. Guaranteed premiums mean that you are quoted an amount at the start of your policy and it stays the same for the term. A reviewable premium means that you do not have a fixed period and that your premium is reviewed regularly. This can result in increases or decreases in your coverage. A renewable premium is when your premium and insurance coverage are renewed at regular intervals. As a result of the renewal, your premium could increase or decrease. Premiums for critical illness insurance can increase as you reach different age brackets depending on the plan. They can also increase for certain risk factors like smoking.
According to Health Savings Accounts for America, approximately 50% of all bankruptcies are due to critical illness. Of those who had a bankruptcy, 75% had health insurance. It is important to think ahead and go beyond health insurance by including critical illness insurance in your employee benefits plan.