How to Use Critical Illness Insurance to Protect Your Financial Wellness

Ilima Loomis

Financial wellness is about peace of mind. One of the best ways to gain that is by doing what you can to protect your income, should you face an unexpected challenge. Most people want to feel secure about the big picture and know that their livelihood and that of their family will be covered no matter what happens. Sometimes, you need a little extra help to do that, and something like Critical Illness insurance can be one way to fill that gap.

How Critical Illness Coverage Works with Other Insurance 

Critical illness coverage picks up where regular health insurance leaves off. With health insurance, if you get sick, your policy pays part of the bill. But there are still many things that health insurance doesn’t cover. And, if you are ever diagnosed with a life-threatening illness, those out-of-pocket costs can add up quickly.

With Critical Illness insurance, you get paid a lump sum if you’re diagnosed with one of the medical conditions covered by your policy. The average benefit amount is $21,993 for an individual. Covered medical conditions usually include things like:

  • Heart attack
  • Stroke
  • Aneurysm
  • Cancer
  • Kidney failure
  • Organ transplant

Unlike regular health insurance, where you need to submit medical bills for approval and reimbursement, you can use Critical Illness insurance however you need it most. This can help pay for things that aren’t covered by health insurance:

  • child care
  • travel costs
  • day-to-day living expenses while you recover
  • copays
  • in-home care
  • your share of the medical bills

Financial Stress Impact on Health

Concerns about medical bills also have a direct impact on people’s health. One study found that more people were afraid of the cost of getting a serious illness than they were of getting the illness itself. According to the same study:

  • 40% of Americans skipped a recommended medical test or treatment because they were concerned they couldn’t afford it
  • 32% said they didn’t fill a prescription or took less of a medication because of the cost
  • 30% of people had a hard time paying for necessities like food and housing because of medical bills

For women with breast cancer, studies have found that cost plays a role in decisions about treatment.

More than a third of women surveyed said the cost of breast cancer treatment was a “significant to catastrophic burden.” Some 43% said cost played a role in their decision about what kind of surgery to get, and 14% said it was a significant factor.

With Critical Illness insurance, your financial burden is lessened. That means if you get sick, you can get the treatment you need and focus on getting better.

Protecting Your Overall Financial Well-Being with Critical Illness Insurance

Medical bills are just part of the overall financial impact of an illness. You may be unable to work while you’re in treatment or recovering. Many people don’t realize that illness, not accidents, cause most long-term work absences. Long-term care can be a significant cost—more than $89,000 per year for a nursing home, or $51,480 per year for home care.

Critical Illness insurance can work in combination with other types of supplemental, or voluntary, insurance products that are designed to help protect your income from different unplanned expenses. These can include:

No More Worrying “What If”

Research shows that people’s financial security is closely tied to their physical and mental health. Worries about money—and medical bills in particular—are a major source of stress. 

In one survey, 64% of Americans said the cost of healthcare was a top stressor. Some 40% said their family struggled to afford medical care.

That’s especially true as more people move to high deductible health plans (HDHPs). More than 24% of Americans were enrolled in a HDHP without a health savings account in 2017. That’s up from 10.6% a decade earlier, according to the CDC. These plans are attractive because they charge lower premiums. But they have a high deductible, meaning you will likely have to pay more out of pocket when you get medical care.

Peace of Mind in an Emergency

Medical debt is a leading cause of bankruptcy, even though more than 90% of Americans now have health insurance. Simply put, most people don’t have enough money saved to cover all the unexpected costs that are incurred due to a medical emergency.

Critical Illness insurance, and other supplemental insurances, provide financial protection when the unexpected happens.

One study found that the average American family has a little less than $8,900 in the bank. In contrast, heart attack hospitalizations cost a median $53,384.

Critical Illness Insurance as Part of Your Financial Plan

When you or a family member has a life-threatening illness, it touches every area of your life. Your financial health is one of them. Voluntary, or supplemental insurance, benefits are one way to help lessen that financial burden should something unexpected happen, letting you focus more of your energy on other things, like taking care of yourself and the one’s you love.

Please help us make your visit even more helpful, by commenting below with any questions you still may have about Critical Illness insurance.

This informational material shall not be considered financial advice. The Hartford assumes no responsibility for any financial, investment, or tax-related decisions. Those seeking resolution of specific financial, legal, tax, or business issues, questions, or concerns regarding this topic should consult their own financial, investment, tax, legal, or other business consultants, advisors, or other professionals.

2 Responses to "How to Use Critical Illness Insurance to Protect Your Financial Wellness"
    • Jonathan Templin | October 30, 2020 at 5:46 pm

      My booklet says there are no limits on pre-existing conditions. I want to know more of how this coverage works and what it covers. I am guessing the premiums for someone that has already been diagnosed are higher than someone that has not been diagnosed, correct? How do I find out how much the premium is?
      Thank you,
      Jon Templin

      • LifeLime presented by The Hartford | November 14, 2020 at 4:00 pm

        Hello, Jon.
        Thank you for your question. You can reach out to your HR department for the specific premium information and what’s covered by critical Illness insurance offered through your employer. Premiums are based on group rates negotiated with individual employers, so pre-existing conditions for you and your covered family members do not factor into the equation.

        Critical Illness insurance coverage provides a lump sum payment for eligible medical conditions covered by the policy to help with anything from home health care needs to rehabilitation and recovery or caregiver expenses, as well as much more. Here’s a link to a video that explains more on what is covered and how it works: https://www.thehartford.com/employee-benefits/employees#. Any condition must be initially diagnosed after coverage becomes effective for an individual in order for that condition to be covered by a policy.

        If your employer offers Critical Illness insurance coverage from The Hartford, every employee pays the same premium based on the specific plan they’ve selected – individual employee plan, employee and spouse plan, employee and family plan, employee and dependents plan, etc. What’s covered is also based on the specific plan your employer offers and the options they’ve chosen to make available to their employees. Options may vary by individual employer and are subject to state restrictions.

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