While many Americans have medical insurance, the co-pays and other out-of-pocket costs that may arise from acute illnesses can obliterate their savings. In fact, 60% of bankruptcies are the result of costly medical bills. Those who had medical insurance during illness are included in this statistic because deductibles and co-payments can still total staggering amounts. Gaps that exist in most insurance plans called for a new product; critical illness insurance was created to supplement medical and disability plans. This plan awards a lump sum payment to the insured should he suffer certain specific acute illnesses. These illnesses include:
•Life threatening cancer
•Major human organ transplant
Health care costs are rising faster than inflation. Employer based plans have begun shifting some of the costs to employees who now experience rising premiums and increased deductibles. Consequently, many are turning to policies that extend coverage beyond standard medical care and address the aspects of coverage for which they are most vulnerable.
Critical illness insurance complements medical and disability insurance when the policy holder sustains one or more acute, debilitating injuries. The funds can be used for numerous practical necessities such as hospital and medical insurance co-payments, mortgage/rent, transportation to treatment centers, childcare, coverage of spousal income (if the insured requires constant care) and a host of other living expenses. Since the payment is disbursed as a lump sum, there is no need to submit expense receipts and await approval from the insurance company. This plan does not replace medical insurance but rather provides financial protection during illness, treatment, and convalescence.
Insurance for critical illness is comparatively affordable; it is, therefore, worth investigating because when illness, cost of care, and loss of income create a perfect storm that depletes the financial resources of the insured, the additional policy can mitigate the impact.