Critical Illness Insurance
The typical critical illness policy pays a lump-sum benefit to the insured upon diagnosis of a covered critical illness. The benefit amount is selected at the time of application and the premium charged is based on the amount of the benefits payable. Critical Illness insurance helps fill the gaps in a major medical policy caused by deductibles and coinsurance, out-of-network costs, travel expenses or other treatments that your major medical will not cover. The list of critical illnesses covered is typically a lengthy list and can be found in the policy documents. Some companies will also offer a secondary list that pays a reduced benefit to the insured as well.It’s important to note that since these policies contain limited benefits, they do not qualify as “minimum essential coverage” under the Affordable Care Act.
Probably one of the most popular types of supplemental insurance in the marketplace, Cancer Insurance has also been around the longest. Simply put, if a named insured on the policy is diagnosed with a covered type of cancer, the insured will receive a lump-sum payment from the insurance company to be used in whatever way they wish. The diagnosis does not have to be terminal in order to receive the benefit, and the types of cancer covered will be listed in the policy documents. Several benefits of the typical cancer policy will include:
- Lump-sum cash payment even when other coverage exists.
- Benefit Selection – At the time of application, the insured can select from a range of benefit amounts that are typically from $10,000 to $50,000 depending on the state where purchased.
- Premium Terms – Many plans offer a 20-year pay as well as a life pay for premiums.
- Level annual or monthly premiums – The cancer policy premium does not increase with age.
- Simple Issue – Most companies have a simple application with few questions and do not require medical exams.
It’s important to note that since these policies contain limited benefits, they do not qualify as “minimum essential coverage” under the Affordable Care Act.