Nearly every single person has been touched by a critical illness at some point in their lives, either directly or to someone they know.
This can amount to an enormous financial burden as the bills continue to accumulate. Medical bills aside, expenses required for daily living continue as well, such as insurance premiums, vehicle payments, mortgage payments, utility bills, child care, and more.
Critical illness insurance is a form of coverage that provides a benefit paid out during times of critical illness, while also providing the financial means to cover expenses where it is most needed.
How Does Critical Illness Insurance Work?
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A critical illness insurance policy provides coverage for financial expenses associated with certain illnesses, as defined by the policy. A lump-sum payment is paid directly to the policyholder once diagnosed with what is considered to be a critical illness. Although each policy varies, the following are typically covered conditions:
- Heart Attack (Myocardial Infarction)
- Stroke (Cerebral Ischemia)
- Kidney Failure
- Organ Transplant
- Heart Transplant
- Coronary Bypass surgery
Types of Critical Illness Insurance
Fully Underwritten Individual
In exchange for providing a comprehensive medical history to the insurance company, an individual can buy a policy for coverage up to $500,000 with a fully underwritten critical illness insurance policy and will likely qualify for the best critical illness insurance rates. This form of critical illness insurance may also be provided by your employer for purchase.
Simplified Issue Individual
This type of critical illness insurance policy is offered in face amounts up to $50,000. Only basic medical questions are asked, so the underwriting requirements are not restrictive as the larger policies but do not typically offer the best critical illness insurance rates. These plans are available through an independent insurance agency and are affordable for most families.
Critical Illness Insurance Policy Rider
Available with some life insurance policies, this rider provides critical illness coverage by way of endorsement to the policy and is typically offered by companies who provide the best critical illness insurance.
What Does Critical Illness Insurance Cost?
Critical illness insurance companies are very competitive but the cost of critical illness insurance is based largely on how much coverage you require and on the pre-existing conditions that may be present. Policies with a face value amount of $50,000 or less, may not require a medical exam.
As mentioned previously, a simplified issue individual policy provides coverage worth between $10,000 and $50,000, with premiums ranging between $180 and $1,500 per year. Keep in mind that this premium rate is also dependent on whether you are a tobacco user. If you are looking for coverage over $50,000, you’ll need to answer relevant medical questions in order to determine your eligibility.
As always, it’s best to compare the rates of different insurance companies to determine which company offers the best critical illness insurance rates and which policy best suits your budget and life insurance needs. Below is our list of critical illness insurance companies that we recommend.
Top 10 Companies Offering Critical Illness Insurance
Critical Care Plus is the critical illness policy provided by AIG. It pays a lump-sum payment for specified covered conditions, such as stroke, kidney failure, cancer, coma, paraplegia, paralysis, and more. Coverage amounts range from $10,000 to $500,000 for terms of 10, 15, 20, or 30 years. AIG is also well known for critical illness riders that can be added to universal life insurance policies.
Aflac provides critical illness insurance through agents that target small businesses. Guaranteed issue life insurance policies are provided by Aflac with no required medical questions. Both One Day Pay and a lump-sum payment option are available. If a claim is submitted to Aflac’s Smart Claim system by 3:00 pm EST, funds for eligible claims are paid the next day with Aflac’s One Day Pay. All other claims are processed in 3-4 business days.
American Fidelity Assurance
The Critical Illness insurance policy offered by American Fidelity includes lump-sum payments for eligible medical conditions and is considered one of the best critical illness insurance offers. Illnesses covered include major burns, major organ failure, heart attacks, and damage caused by a stroke. This is typically offered as an employer plan, and coverage and benefits varies according to state.
Assurant Health Insurance
The critical illness policy offered by Assurant covers conditions such as stroke, heart attack, and cancer. Assurant does provide guaranteed issue policies as well. Typically made available through employers, the benefit is paid despite outside medical coverage. Coverage varies by state.
This critical illness policy provides a maximum payout for paralysis, heart attack, cancer, and other approved medical conditions. This policy can be purchased on its own or added as a rider to your existing life insurance policy. Coverage amounts range from $5,000 to $500,000. You can purchase stand alone critical illness insurance policies on a simplified issue basis from Assurity Life.
Colonial Life Insurance
Lump-sum payment for this critical illness policy is made for medical conditions, such as stroke, heart attack, end-stage renal disease, major organ transplant, and coronary artery bypass surgery. Additional benefit can be received if diagnosed with more than one covered medical condition.
This critical care plan provides a lump-sum payment for selected covered conditions, such as heart attack, brain tumor, stroke, kidney failure, Multiple Sclerosis, and more. The insured has to survive 14 days following a covered loss in order for the benefits to be paid out. This policy is offered in Colorado, California, DC, Idaho, Maryland, Michigan, Montana, New Mexico, North Carolina, Oregon, and Wyoming.
Guardian Life Insurance of America
Provides a critical illness insurance policy for coverage up to $50,000. There are more than 30 covered medical conditions or critical illnesses with this policy, and it’s typically available through an employer.
This critical illness insurance plan pays a 100% maximum benefit for medical conditions, including cancer, stroke, heart attack, blindness, deafness, kidney failure, paralysis, Alzheimer’s, and major organ transplant. Additionally, there’s a smaller benefit amount which provides 25% of the maximum benefit and covers such conditions as, first carcinoma in situ, first coronary artery bypass surgery, and first coronary angioplasty.
Finally, this critical illness policy provides a lump-sum tax-free payment for medical conditions such as heart attack, coronary artery bypass surgery, cancer, and major organ failure. The benefit is paid out regardless of existing medical coverage, and no medical exam is required. In the event that you are diagnosed with more than one medical condition, multiple payouts and a wellness benefit are available.
Additional Things to Consider
No one has the ability to see into the future in order to determine when a catastrophic illness will attack. If we had that ability, we would all be greatly prepared. Even though your standard health insurance policy might provide some coverage, there may be gaps in coverage for those illnesses that require continuous medical care. This added protection is excellent for those with a family history of stroke, cancer, heart disease, and other ongoing medical conditions. Talk with a trusted independent insurance agent to discuss your critical illness insurance options and recommend the best critical illness insurance companies to choose from.
Frequently asked Questions
Why worry about critical illness insurance if you have health insurance?
When a person is diagnosed and treated for a critical illness, there are many expenses that health insurance does not cover. With critical illness insurance the company offers lump-sum payment directly to the policyholder that can help cover these expenses.
How much does critical illness insurance cost?
The cost of critical illness insurance is based largely on how much coverage you require and on the pre-existing conditions that may be present. Policies with a face value amount of $50,000 or less, may not require a medical exam.
Can I get critical illness coverage as a rider on a life insurance policy?
Yes, many life insurance companies offer a critical illness rider that will pay a large percentage of the death benefit to the insured in a lump-sum payment and then deduct that amount from the death benefit.