In times of critical illness, health insurance covers most of the costs of doctors, hospitals, or medicine. But how will you pay the mortgage, or the car payment? Your answer may be critical illness insurance.
What is Critical Illness Insurance?
Critical care insurance is designed to pay a tax-free, single payment to policy owners when they are diagnosed with a critical illness. Those illnesses meeting the definition of critical illness include stroke, heart attack and cancer. Other conditions covered may include kidney disease, organ transplant, or bypass surgery – depending on the individual policy you purchase.
This specialized insurance is available from individual insurance companies, or through a voluntary employer-offered plan, which means the employee pays the entire premium. The cash payments depend on the coverage chosen, but often ranges from $10,000 to $1 million.
How Much Coverage Do You Need?
Generally, a serious illness can cause you to put your life on hold for up to two years. A good estimate of need is to add up your mortgage payments for two years, and use this figure as the base for purchasing extra insurance. If you can afford to purchase more coverage, do so.
Many families find they are under-insured for a major medical event, and deductibles and co-pays can quickly drain a savings account. Serious illness forces thousands of individuals into bankruptcy each year, and this type of insurance can fill in many monetary gaps. School tuition, travel costs, and replacing a spouse’s income during a time of illness are examples of uses for your serious illness insurance payout.
Allow you and your family peace of mind by being protected with this form of coverage.