Critical Illness insurance--don't I already have coverage with my health insurance?
Imagine, a lump sum distribution of money, tax free, that you can use as needed. For household expenses, you want to see a specialist in another state but how can you afford to get there? Let me explain....
Yes, you do have coverage if you have health insurance, but critical illness coverage deals with another facet. We hear frequently that people end up in horrendous debt, even though they have health insurance when a major event hits. Why?
Well, yes, there can be costs that your health plan doesn't cover. Or even just your 20% or 30% you're obligated for, if you have a $5,000-$10,000 out of pocket maximum, that's a lot of money especially since our economy is problematic right now. Even when the economy is good, over 50% of the home mortgage foreclosures are a result of exorbitant medical bills. And these days with so many people living paycheck to paycheck, it's even more precarious.
The secret? What people often miss in this scenario is that if a heart attack or some other life threatening event hits the family bread winner, and only one person is working, income often stops. There may not be disability insurance. And if both partners need to be working to make ends meet, yikes! Often the partner/spouse may not be able to work, or working less than usual because they are caring for their stricken loved one.
So do the math--increased, unexpected expenses in conjunction with a reduced income, and voila--a financial mess at best.This is where a good critical illness policy comes in. These policies will pay a lump sum, depending on what you've purchased, when diagnosed with certain problems. The policy I like is a bit of a combination--god forbid you should be this unlucky, but it could pay 3 times--if you were hit with a first time cardiovascular problem (stroke, heart attack) a first time life threatening cancer, or 'miscellaneous'--things like an organ transplant, Some people can receive a portion of their benefit if they need something like an angioplasty.
Many people don't have disability coverage, or certainly not enough. Particularly high wage earners. Critical Illness insurance is filling that gap. And generally in a pretty affordable manner, as opposed to buying more disability coverage.
As terribly 'salesy' as this sounds, what would you rather lose--your home, or your mortgage payment?