What Illnesses Does Critical Illness Insurance Cover?

No one ever plans on getting cancer, having a heart attack, or dealing with kidney failure, yet many of us will experience one of these severe conditions at some point in our lives. This is where critical illness insurance comes into play – it can help you if you are unable to pay your bills due to illness.

Keep reading to learn more about critical illness insurance and the illnesses that it covers!

What is Critical Illness Insurance?

Critical illness coverage is a type of health insurance that can pay out a large sum of money to cover unexpected illnesses or medical conditions – it’s there to take care of large medical bills. This insurance is designed to supplement your existing health insurance, not replace it.

Critical illness insurance not only helps with medical expenses, but it also can take care of lost income while you are sick, helping you stay on top of mortgage payments, transportation expenses, everyday costs like groceries, and therapy or rehabilitation.

With this coverage, you’ll usually only be taken care of when it comes to long-term, severe illnesses like cancer, heart attack, or stroke. While critical illness insurance is relatively inexpensive, it’s usually limited in terms of coverage, only covering a few illnesses.

Critical illness coverage typically pays out one large lump sum after your diagnosis, but some plans will pay you monthly. This protection lets you focus on your recovery rather than stressing about your bills and other medical costs.

Common Illnesses Covered by Critical Illness Insurance

Cancer

Most critical illness policies will include some cancer coverage. However, many policies will only include coverage for advanced-stage cancers that have spread, meaning that less severe diagnoses are excluded.

Heart Attack

Like a cancer diagnosis, a heart attack can significantly impact your daily life and may create extensive medical bills, which is why critical illness usually covers a heart attack. However, your policy may only cover a major heart attack that causes long-term symptoms, rather than a minor heart attack that you can recover from quickly.

Stroke

Your critical illness policy likely includes coverage for a stroke – more specifically a stroke or spinal stroke resulting in symptoms that last at least 24 hours. These types of strokes are more severe, which is why you are more likely to have coverage.

Other Major Illnesses Covered

Organ Transplants

The most common organ transplants covered include heart, kidney, lung, liver, pancreas, and bone marrow transplants. The lump sum for a transplant can help you with any expense related to the procedure, like transportation, medicine, and accommodations.

However, critical insurance for organ transplants usually does not cover preexisting conditions. Therefore, if you had a previous condition leading to a heart transplant, it probably wouldn’t be covered.

Kidney Failure

If you experience kidney failure requiring permanent dialysis, you’ll likely be covered by critical illness, as this will impact your quality of life.

Multiple Sclerosis

Multiple sclerosis, also known as MS, is a condition that impacts your brain and spinal cord. It usually causes symptoms like blurred vision and impacts how you move, think, and feel. Because these symptoms can affect nearly every area of your life, critical insurance policies typically cover MS as long as you are experiencing symptoms.

Parkinson’s Disease

Parkinson’s disease is a chronic illness that impacts the brain, leading to movement problems, mental health conditions, and a variety of other symptoms. This disease can often lead to significant medical bills and difficulty holding down a job, which is why it’s covered by critical illness coverage.

What do Dread Disease Policies Cover?

A dread disease rider is another form of critical illness insurance. You can add this to your life insurance to give the policyholder a percentage of the death benefit if they are diagnosed with a critical illness.

The rider will specify which conditions that policy will cover. Then, the payout can offset the costs related to treating the disease. However, the payout will be deducted from your total death benefit when you pass.

For example, if you have a life insurance policy for $500,000, and your dread disease policy pays out $50,000 because you have a heart condition, the total payout at your death will be $450,000.

This subset of critical illness insurance covers conditions like:

Cancer
Alzheimer’s disease
Parkinson’s disease
Heart disease
Loss of limbs
Organ transplants
Paralysis
Blindness
Coma

Differences Between Dread Disease and Critical Illness Insurance

Dread disease and critical illness policies are essentially the same thing. However, dread disease coverage is usually more narrow in terms of what it covers, while critical illness insurance is more comprehensive.

Dread disease policies typically focus on more life-threatening conditions with high mortality rates. Critical illness will often have more flexibility and customization regarding what illnesses are covered and if you can add riders to the policy.

Why Critical Illness Insurance is Important

Critical illness insurance is essential for several reasons. The first reason is that it gives you financial protection if you ever experience a life-threatening illness that impacts your quality of life and ability to work.

For example, let’s say that Sally is diagnosed with stage 4 cancer and is unable to work due to her extensive treatment and daily symptoms. Not only can she not work with this condition, but she also now has a massive medical bill that she can’t afford.

Luckily, with her critical illness coverage, Sally can pay off most of her medical debt and cover some of her day-to-day expenses as she undergoes chemo. This reduces her financial stress so she can focus on what really matters – her recovery.

This is another reason why critical insurance matters – it fills in the gaps in your existing health insurance policy. Traditional health insurance may not cover experimental treatments or elective procedures, which you may need depending on your illness and its severity. Critical illness insurance can give you an extra layer of financial security since you’ll know there’s coverage no matter what.

Illnesses Not Covered by Critical Illness Insurance

Although critical illness insurance can cover a range of conditions, there are several circumstances that it does not cover. Here’s what is usually excluded from this insurance:

Preexisting Conditions

Preexisting conditions include illnesses or conditions diagnosed before the policy was implemented. This means that if you had diabetes before you purchased critical illness insurance, your diabetes or any other related surgeries or conditions would not be covered in your policy, as it was a preexisting condition. This mitigates the risk of insurance companies’ immediate claims.

Non-Life-Threatening Conditions

If you have mild asthma or mild arthritis, these would not be covered under critical illness insurance. Critical illness policies are designed for serious, life-altering conditions. Less severe health issues that don’t threaten long-term quality of life or ability to work typically fall under standard health insurance.

Chronic Diseases That Are Not Severe

Mild diabetes or hypertension are not typically included in a critical illness policy. Because these conditions are very manageable, there is no need for a lump sum payout to assist with lost income or massive medical expenses.

Cosmetic or Elective Procedures

Because they are not considered life-threatening health issues, voluntary or cosmetic procedures are not covered by critical illness policies. For example, if you want Botox or implants, you would not get a payout for these procedures.

Self-Inflicted Injuries or Substance Abuse

Insurers usually exclude coverage for injuries or illnesses caused by preventable behaviors. Because these are avoidable risks, critical illness would not cover them.

Conditions for Claiming a Payout

You must meet specific conditions in order to receive a payout under your critical illness insurance policy. Here’s how it works:

You receive a diagnosis: Your diagnosis must be one of the illnesses covered within your policy and must meet the policy’s criteria. For example, if you receive a cancer diagnosis, only certain types of cancer may qualify.
Your diagnosis meets severity criteria: Many critical illness policies have specific criteria for the severity or stage of the illness. For example, a heart attack may only be covered if it permanently damages the heart muscle.
Survival period: After the diagnosis, you must remain alive for at least 30 days. Check your policy for the “survival period” clause, which will detail how long the insured must live after the diagnosis or medical event for the claim to be valid. The claim may be denied if the claimant passes away during this time.
Waiting period: Many waiting periods range from one to three months. Unfortunately, you cannot make a claim during this waiting period. This helps insurance companies avoid paying out fraudulent claims.
Medical documentation: Your doctor must thoroughly document the evidence of your diagnosis – this includes test results, medical reports, and statements to prove the illness.
Receiving the benefits: To receive the policy payout, you must meet the criteria within your policy, which often includes stipulations on the country where you can receive treatment, keeping up to date on your premium payments, and certain age restrictions.

Considerations When Choosing a Critical Illness Policy

You’ll want to compare critical illness policies to determine which is right for you and your needs. Here are a few of the most important things to consider:

Coverage size: Check the extent of coverage provided by your policy. You’ll want a plan that pays out an extensive sum to cover large and unexpected medical expenses.
Waiting period: Consider the policy’s waiting period. Can you afford to wait 30 days before receiving benefits?
Age: Look at the policy’s entry and exit age limits. Many critical illness policies have an age limit, so you’ll want to check that it aligns with your future and current needs.
Conditions covered: If you have a higher risk of certain conditions due to your health history or genetics, check if the policy will cover those conditions.
Illness definitions: Just because your policy will cover cancer doesn’t mean it will cover all types of cancer. That’s why it’s essential to read through the definitions of illness to check which circumstances you’ll actually be covered.
Personal finances: Only you know how much money you can afford to allocate toward medical bills and emergencies. If you don’t have much in a savings account, you’ll definitely want to choose a policy with a higher benefit.
Covers lost income: Not every critical illness policy covers lost income, so read through the policy carefully, especially if you cannot afford to lose your income for several months.

Remember that although a premium might seem like a low price and a great deal, cheaper policies usually offer less comprehensive protection. Only you can decide how much coverage you need and how much you are willing to pay in premiums!

Conclusion

Critical illness insurance usually covers severe conditions like heart disease, stroke, cancer, multiple sclerosis, and heart attacks. However, your particular policy will outline the specific illnesses covered and the scope of the disease covered.

This type of insurance can help you avoid financial hardship if you cannot pay your bills or significant medical expenses due to a severe condition. Carefully assess your risk factors to choose a policy that best fits your medical and financial needs.

FAQ

Is critical illness coverage worth it?

If you have a family history of serious medical conditions or have a risky health history, critical illness coverage is definitely worth it. Even if your standard health insurance covers serious illnesses and treatment, critical illness can help you recover lost income and any other unexpected medical expenses along the way.

What is the purpose of a dread disease policy?

The purpose of a dread disease policy is to give you financial relief if you ever receive a severe diagnosis from your doctor.

What are the 36 critical illnesses?

These are the 36 main conditions covered by a critical illness policy:

Cancer
Hepatitis (Fulminant Viral)
Heart Attack
Coronary Artery Disease
Stroke
Encephalitis
Kidney Failure
Head Trauma
Multiple Sclerosis
Medullary Cystic Disease
Parkinson’s Disease
Brain Surgery
Alzheimer’s Disease
Coronary Artery Bypass Surgery
Brain Tumor (Benign)
Lung Disease (end-stage)
Paralysis (limbs)
Surgery of the Aorta
Muscular Dystrophy
Terminal Illness
Third Degree Burns
Loss of Independence
HIV
Major Organ Transplant
Cardiomyopathy
Primary Pulmonary Arterial Hypertension
Loss of Speech
Severe Coronary Artery Disease
Chronic Aplastic Anemia
Heart Valve Surgery
Blindness (Permanent)
Angioplasty
Bacterial Meningitis
Coma
Liver Failure (end-stage)
Deafness (Permanent)