Critical Illness Insurance
A serious health crisis, such as a cancer diagnosis or heart attack, can leave you unable to earn an income, creating financial stress on top of the emotional burden. Monthly obligations like mortgage or rent payments and rising medical bills still need to be met, and without income, covering these expenses can become overwhelming.
Critical illness insurance provides a lump-sum benefit if you are diagnosed with a covered condition. This payment can help ease financial pressure, allowing you to focus on recovery without worrying about bills or lost income.
Why Do I Need Critical Illness Insurance?
No one can predict if or when they might face a serious illness such as cancer, a heart attack, or a stroke. These conditions can require extensive treatment and recovery, and the financial impact can be just as severe as the health consequences. In fact, an estimated 56 million Americans under 65 struggle to pay medical bills, which are the leading cause of bankruptcy.
Even with good health insurance, deductibles and co-insurance can leave you with significant out-of-pocket costs. Critical illness insurance helps ease this financial burden by providing a lump-sum benefit that can cover medical bills, mortgage payments, and other expenses. Benefits can also be used for treatments not covered by health insurance or for travel to receive care elsewhere.
How Does Critical Illness Insurance Work?
Critical illness insurance works as long as you keep paying the premiums. Coverage amounts vary widely — anywhere from $10,000 up to about $1 million, depending on the policy. Each contract lists exactly which conditions qualify. Most include cancer, heart attack, and stroke, while others expand to things like major heart disease, kidney failure, organ transplants, or paralysis.
If you’re diagnosed with a covered condition while the policy is active, the insurer pays out the full benefit in a single lump sum. It’s usually tax-free, but you should confirm that with a tax professional so nothing comes back to bite you later.