Critical illness insurance: a way to help bridge a health insurance gap

A major illness can be tough both emotionally and financially. If you are diagnosed with a serious medical condition, such as cancer, heart attack, or stroke, you’ll want to focus on your recovery and getting back to being healthy.

A critical illness diagnosis can result in a significant increase in out-of-pocket expenses and a loss of income if an illness keeps you out of work. Critical illness insurance can help.

Critical Illness insurance does not satisfy the Minimum Essential Coverage requirements of the Affordable Care Act and is different from health insurance, whether you have an HMO, PPO, HDHP/HSA, or another medical plan. Typically, health insurance companies directly reimburse hospitals and medical providers for covered medical expenses. But critical illness insurance directly pays you a lump sum benefit to help pay for any of the new, unexpected costs you might face if you were diagnosed with a critical illness. These costs could include:

  • Out-of-network care
  • Prescription drug co-pays
  • Alternative therapies

You may also face other new expenses, such as travel, child care, or help in the home, all of which can add up quickly. This situation may be further compounded if you are unable to work. Critical illness insurance can help fill these gaps and can give you the freedom to use your benefit according to your needs—whether it’s help meeting a high deductible, paying your monthly mortgage, or managing living expenses—so you can focus on your recovery.

Understanding critical illness insurance plans—how the lump sum benefits work as well as plan costs, for example—can help you choose the critical illness plan that is right for you. This year, consider how critical illness insurance can complement your medical insurance so that you are financially prepared, not overwhelmed.

In some states, "Critical Illness" is referred to as "Specified Disease" and is subject to state specific variations.

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SLPC 25890 06/16

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