Individual Critical Illness Insurance

Critical Illness Insurance – Critical Illness Plans, Coverage & Quotes

Dealing with a critical illness is difficult enough in itself. Financial hardship only makes it worse. Critical illness insurance is available to help you and your family through tough times. Your standard health insurance policy only covers the medical costs directly associated with your illness, such as hospitalizations. Unlike critical illness insurance, it doesn’t account for other expenses that may result from your condition. If you are predisposed to a covered condition, critical illness insurance plans provide you and your family with an added measure of security.

A critical illness insurance policy works by paying out a lump sum if you develop a severe illness covered in the contract. Which critical illnesses are included? While the exact coverage varies between critical illness insurance plans, they normally apply to relatively rare and unexpected conditions that aren’t a direct result of your actions (i.e. injury that is self-inflicted or that occurred in the course of your illegal activity, or suicide). Typical conditions that the average critical illness insurance will cover include most types of cancer, heart attack, stroke, most organ transplants, and deafness or blindness. Sometimes certain subcategories of conditions aren’t covered by most critical illness insurance companies; read contracts carefully. For example, many critical illness insurance plans do not cover most forms of skin cancer. Critical illness insurance rates will most likely be higher for more comprehensive coverage.

What can you use critical illness health insurance payouts for? Virtually anything; there are no strings attached to the money. Critical illness insurance policies are meant to reduce stress and allow you to focus on recovering from your illness. The lump sum you receive can be used to keep up with mortgage or rent payments, utility bills, or other loan payments if you are unable to work and any disability insurance you may have isn’t enough. Maybe hiring household help would take some of the burden off your caregivers–critical illness insurance allows you to pay for that. Advances in medical technology have made health care far more expensive than it used to be. Even if your health insurance covers most of it, you may be left with large deductibles and co-payments for prescriptions and treatments. You will also be able to afford travel and accommodations to and from specialized treatment centers for you and your family. You can even go on a vacation with any remaining funds!

There are several limitations of critical illness insurance that you must be aware of. Obviously, you probably will not be able to buy critical illness insurance after having already developed an eligible condition. Critical illness insurance companies make money by taking the risk that the majority of policyholders will remain healthy and continue paying premiums, while only having to pay out lump sums in a small percentage of cases. If your illness is a certainty right now, they are unlikely to underwrite your critical illness insurance policy. This is also why most critical illness insurance companies refuse to sell policies to individuals over the age of 65.  This is similar to a pre existing health insurance policy. For the same reason, there is typically a waiting period involved before your critical illness insurance coverage starts. You will also have to wait for a certain length of time in order to receive the lump sum after diagnosis–it depends on the specific critical illness insurance plan, but many will not pay any money if you die less than 30 days after being diagnosed with an eligible condition. There are separate riders you can purchase for an additional fee, which ensures that your estate will be covered in case of death.

Critical illness health insurance is generally sold in amounts ranging from $10,000 up to $1 million. The value you choose should cover at least a year of your income, along with several years’ worth of mortgage payments and your entire credit card debts.  Since critical illness insurance quotes are cheaper for younger individuals, it may be a good idea to buy such a policy at a relatively young age if you are at high risk and have others to support. Coverage is usually available for periods of up to 25 years, with a minimum length of two years. Although you can buy critical illness insurance by itself, you can also buy a policy as a supplement to a health or life insurance plan.

Wondering if a critical illness insurance policy is right for you? VitalOne has licensed insurance agents available to compare coverage and quotes from a multitude of critical illness insurance providers.

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