When and Why to Quote Critical Illness Insurance

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: