Even if you have medical insurance, you may still face high out-of-pocket costs when diagnosed with a serious illness like COVID-19, a heart attack, or a stroke. According to Salary Finance, about one in three working Americans has medical debt, and over half have defaulted on it. Fortunately, Critical Illness Insurance (CII) can provide a financial safety net.
What Is Critical Illness Insurance?
Critical Illness Insurance is a voluntary supplemental insurance plan that provides a lump-sum benefit payment when you are diagnosed with a covered illness. Unlike standard health insurance, the money is paid directly to you, giving you flexibility to cover medical and non-medical costs as you see fit.
1. Out-of-Network Care
Some medical plans limit out-of-network coverage, forcing you to pay more if your doctor or hospital isn’t in-network. With CII, you receive a lump-sum payment that can be used to cover out-of-network medical costs, giving you freedom to see the providers you prefer.
2. Your Medical Insurance Deductible
The average deductible is about $1,655 (Kaiser Family Foundation). If you haven’t met it when diagnosed, you could pay significant out-of-pocket expenses. Critical Illness Insurance requires no deductible, allowing you to file a claim as soon as you’re diagnosed.
3. Copays and Coinsurance
Copays and coinsurance—fees shared between you and your insurance provider—can add up. The average American family spends up to $5,000 yearly on these costs. A CII lump-sum payment can help cover copays, coinsurance, and other cost-sharing fees.
4. Alternative Medications and Treatments
Many insurance plans exclude experimental or alternative therapies, like acupuncture or off-label medications. CII funds can be used for any medically recommended treatment, even if your regular insurance doesn’t cover it.
5. Durable Medical Equipment (DME)
DME includes wheelchairs, oxygen tanks, CPAP machines, and more. While insurance may cover “medically necessary” items, it often doesn’t cover comfort or convenience items, such as bathroom handrails. CII allows you to use funds for any DME you need during recovery.
6. Living Expenses
Medical insurance typically doesn’t cover rent, groceries, childcare, or transportation. During illness, household expenses can increase, especially if you need help with daily tasks. The lump-sum payment from CII can cover living costs, household help, or other personal expenses.
7. Travel Expenses
If treatment requires traveling—like visiting a specialized doctor or participating in a clinical trial—insurance may not cover flights, lodging, or meals. Critical Illness Insurance can help with travel and accommodation expenses for you and your family, so you can focus on recovery.
Why Consider Critical Illness Insurance
CII provides financial flexibility and peace of mind during a critical illness. From medical bills to everyday living costs, having this supplemental coverage can prevent financial stress when you need it most.
Tip: Talk to your employer about Critical Illness Insurance options, or consider purchasing an individual plan to supplement your existing coverage.
