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When and Why to Quote Critical Illness Insurance

  • Writer: Yetworth
    Yetworth
  • Sep 28, 2021
  • 2 min read

Critical illness insurance doesn’t get the popularity it deserves. We’re huge fans of this important line of insurance protection, especially for the select reasons detailed below.


What Is a Critical Illness?

A critical illness is a very serious or long-term type of illness such as a heart attack, cancer, stroke, loss of limbs, paralysis, etc.

  • In the U.S., someone has a heart attack every 40 seconds (CDC)

  • 90% of heart attack victims survive (AACII)

  • Each year, more than 1.6 million Americans are diagnosed with cancer (CDC)

  • 70% of people diagnosed with cancer live 5 years or more (AACII)


What Is Critical Illness Insurance?

Critical Illness Insurance (CI) is a lump sum benefit that pays the insured upon a diagnosis of a critical illness covered in the policy. All the insured needs in order to receive tax-free cash from the carrier is an official diagnosis from their doctor.


When to Quote Critical Illness Insurance

Besides simply being a nice consolation payout after surviving a difficult health event, a CI benefit can be a useful tool for:

  • Covering a high health insurance deductible

  • Covering the elimination period of a disability insurance policy

  • Paying for transportation costs associated with a hospital stay or paying for recovery care

  • Supplementing loss of time at work due to recovery

  • Post-diagnosis therapy that might not be covered by health insurance

  • Daycare while you regain strength enough to care for your kids


While disability insurance should be considered first since it’s more comprehensive coverage (and not restricted to only a critical illness), critical illness insurance is a great option for those who can’t obtain DI due to various reasons, including:

  • An unemployed person (stay-at-home-parent) or a person working less than the minimum hours required for occupational underwriting who doesn’t qualify for disability income insurance

  • A client that has been either denied coverage or offered disability insurance with many modifications or exclusions could be a great candidate for critical illness instead or as well

Other Facts About CI

  • Most CI policies allow for simplified underwriting (no exams!) for a benefit of up to $75,000

  • Unlike disability insurance, a critical illness application does not require financial documentation

  • We typically suggest getting a policy with a benefit that’s about 25% of your annual income

Modern medicine has fortunately increased our chances of surviving a major medical event but recovering can be expensive! CI can make a scary situation less terrible. It’s an affordable policy that can help significantly at your most vulnerable time.


Here are some considerations that help in choosing a critical illness policy:


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