Do I Need Critical Care Insurance?

Fran Majidi
June 1, 2020

You may or may not have heard of critical care insurance. However, in certain situations, critical care insurance, also called catastrophic health insurance or catastrophic illness insurance, may be used to protect you from having to pay for exorbitant medical costs out-of-pocket. The fact of the matter is that no one is ever prepared for cancer or a heart attack or stroke. A standard health insurance plan may not cover all of the cost of grave illnesses. See if buying critical care insurance is right for you.

What Is Critical Care Insurance?

Critical care insurance or catastrophic health insurance provides additional coverage for medical emergencies. Sudden and serious illnesses can be very costly and these policies help cover what your primary health insurance does not. Critical care insurance policies are very low cost and generally only cover specific illnesses and emergencies, that sometimes include:

  • Heart attacks
  • Stroke
  • Organ transplants
  • Cancer
  • Coronary bypass
  • Renal failure
  • Parkinson’s
  • Blindness
  • Loss of speech
  • Heart valve replacement Amyotrophic lateral sclerosis

Your policy will list all the covered illnesses along with a list of excluded ones. Be sure to read your policy terms before buying critical care coverage so you know what to expect if you fall ill. Each policy varies greatly, both in terms of coverage and pricing, far more than standard policies, which are far more regulated. For instance, one carrier may only cover all of the conditions listed above while another only covers one. Don’t make assumptions. Read your policy thoroughly before buying.

Critical care insurance often covers the high deductibles most people opt for to keep monthly payments manageable. The way it works is this: If you come down with a critical illness, you’ll be paid out by your critical care policy in one lump sum. You can choose to use this for anything related to your illness, including child care and transportation. Coverage limits vary anywhere from $5,000 to $100,000 depending on the policy you chose and the extent of the policy’s coverage.

Do keep in mind that these plans have a narrow coverage. For example, if you break your leg or hip, you may not be covered for an emergency room visit with these plans. You will only be covered for the sicknesses and emergency care listed in the policy.

How Much Does Critical Care Insurance Cost?

The cost of critical care insurance or catastrophic illness insurance varies from person to person and according to many factors that include age, health, sex and family medical history. However, compared with standard health insurance, it’s very inexpensive. A person in their 40s can expect to pay $25 to $50 a month. Some employers offer these plans alongside high-deductible primary health insurance but you can also buy critical care insurance on your own. Do keep in mind that there is no payout if you die. If you’re hoping to secure your survivors with a death benefit, you should consider buying a life insurance policy.

According to the New York Times, the average nonsmoking 42-year-old buying a $50,000 policy can expect to pay anywhere between $54 and $66 a month. A $25,000 policy will run anywhere between $27 and $41. For older adults, the price jumps. You can expect to pay around $200 with some insurers at age 60. By age 70, coverage may be reduced by as much as a half, so it’s very important to pay attention to these things as you get older. Don’t renew without checking the coverage terms. It’s important to read the proverbial fine line or else you may not have any coverage for what you need.

Why Would I Buy Catastrophic Health Insurance?

Whether you call it critical care insurance or critical illness insurance, it’s catastrophic health insurance and that is all it covers and quite specifically only certain emergency health crises. Catastrophic health insurance is also the answer to the high deductible plans that many employers offer their employees.

The Affordable Care Act (ACA) placed a limit on out-of-pocket costs at $6,850 annually and $13,500 for a family. But that’s still incredibly high for some people. In 2014, 1.2 million Americans bought catastrophic health plans to contend with the high cost of health insurance, doubling the number of policies sold only five years earlier. Speak with an agent to see if this plan is right for you: 877-214-2291.

Do I Need Critical Care Insurance?

Your chances of needing a critical care insurance policy are greater the older you are. Unfortunately, most people tend to drop their plans before they reach the age when they may actually need the coverage, thinking they wasted money for years. Will you ever use the coverage? Well, certainly this is one product you don’t ever want to get the most out of, because hopefully you won’t fall gravely ill. The fact of the matter is that chances of critical illness increase with age. Also coverage on some policies becomes more narrow as you age so you need to buy the right plan.

What Is Cancer Insurance?

Some insurers or brokers may refer to critical care insurance as cancer insurance because that is what it often covers. If you’re considering buying this type of policy, see if cancer is the only event it covers. This is an important question to ask if you want coverage for other events like a heart attack or Alzheimer’s. The right coverage depends on buying the right policy and each one is different.

If I Die Shortly After Diagnosis, Will I Be Covered by Critical Care Insurance? Most policies require that you are alive for a certain period of time after the event, such as cancer surgery or a heart attack, in order to receive a payout. If you die before the required period of time, your survivors cannot claim the lump sum. Remember: catastrophe insurance never pays a death benefit, only life insurance pays out a death benefit.

Do I Need a Physical Exam for Critical Care Insurance?

If you buy an individual critical care policy, you usually have to do a physical. If you buy from an employer, you can sometimes do without one. It is confusing to some people who thought the Affordable Care Act did away with disqualifications based on pre-existing conditions. However, that is only true for standard health insurance, not critical care insurance. Being able to purchase a policy and how much you pay for one depends largely on the state of your health.

Can I Get Critical Care Insurance if I Have Diabetes?

Unfortunately, diabetes is one of the pre-existing conditions that may prevent you from being able to purchase a critical care insurance policy. It’s worth it to speak with an agent at 855-214-2291 to see which providers cover diabetics.

Can I Get Critical Care Insurance if I Had Cancer?

If you previously had cancer and it has been in remission you may get coverage, but the insurer may not pay out a lump sum for 12 months after coverage begins. If you get cancer after buying critical care insurance, your insurer may make more than one payment, if there’s a recurrence or if you have another ailment, such as a heart attack after the diagnosis of cancer.

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