A heart attack or stroke can upend a family's world. Seniors 65 years old or older should consider critical illness insurance. Caregiving for elderly relatives after a severe illness or injury puts a financial strain on the family. Critical illness insurance pays out benefits quickly, even before recovery. This supplemental insurance is essential to retirement planning, but critical illness insurance has some disadvantages. Learn more about what it does and why it's important for family caregivers and seniors.
Critical illness insurance pays medical bills when someone has a serious or catastrophic illness or injury. The insurance covers expenses not covered by Medicare, Medicaid, or private insurance. Many seniors find critical illness insurance protects them and their families against severe financial loss. For example, if a loved one has a heart attack or stroke, this supplemental insurance covers necessary hospitalization, bypass surgery, doctor's visits, and medical care for renal failure. Additionally, families can use funds to pay for non-medical expenses like rent or groceries.
Critical care insurance may protect from catastrophic occurrences like hospitalization, surgery, and assisted living expenditures. Some supplemental insurance may cover needed healthcare supplies, transportation, surgery, medical visits, and other uncovered costs.
Some of the critical illnesses often covered under critical illness insurance include:
Family caregivers should discuss what critical care insurance will cover with the insurance provider. Insurance policies differ from one to the next. Knowing what a care recipient's policy covers before an emergency occurs will prevent unexpected financial loss.
Most critical illness policies don't cover pre-existing conditions diagnosed before the policy was purchased.
Illnesses covered by critical illness insurance vary by the policy, but in general, a critical illness insurance policy won't cover the following:
Before purchasing coverage, understand precisely what the specific critical illness insurance plan covers.
Seniors and their family caregivers should think about purchasing critical sickness insurance. A significant sickness or injury might strain the family's finances. The supplemental insurance swiftly pays tax-free payments, even before recovery. The payments offset the mortgage, rent, and other expenses during a heart attack or stroke. This payment will help protect your family and assets if you are dealing with a critical illness or permanent disability.
While critical care insurance offers some benefits, family caregivers should also consider the disadvantages of critical care insurance. This includes low limits of coverage and zero coverage for any pre-existing illness. This supplemental insurance has higher premium costs, increasing as the care recipient ages.
In general, most plans start with an automatic $50,000 in coverage. However, $50,000 will only cover part of the costs of many surgeries, long-term treatment, or more extended hospitalizations. Family caregiving for the elderly involves considerable time and cost, and finding the right coverage for emergencies protects everyone.
Knowing which policy to choose for your family member makes a significant difference if they experience a severe injury or sudden illness. While convenient, many policies may not cover the treatment needed, and cancer and certain pre-existing conditions may not have any coverage. For those reasons, read over the policy carefully.
Critical care insurance excludes coverage for pre-existing diseases and some cancers like skin cancer. No coverage will be provided for STD-related cancers. Insurance policies vary according to each provider. Family caregivers should carefully read the fine print if a care recipient has cancer or a pre-existing illness. They may not be covered by critical care insurance if they need cancer treatment.
After considering the benefits and disadvantages of critical care insurance, deciding whether to buy this insurance can seem confusing. Consider that most insurance plan payouts may be in increments of $10,000, and remember not all diseases are covered. Some benefits may go as high as $500,000. If you have a significant cash benefit, expect a higher premium.
Critical care insurance fills in considerable gaps in private insurance or Medicare coverage. Additionally, the beneficiary can use the payments for the mortgage, groceries, and other bills. Most seniors choose critical care insurance for its flexibility, affordability, and convenience during a medical emergency.
There are also alternative forms of coverage without all these restrictions. For example, disability insurance could provide income if you cannot work for medical reasons, but coverage isn't limited to a narrow set of illnesses.
Some other supplemental insurance policies you might consider are the following:
Disability insurance helps to replace lost income if an individual becomes disabled and cannot work. Insurance carriers may provide short-term and long-term disability insurance packages, which can provide benefits for different lengths of time.
Hospital indemnity insurance gives you financial assistance if your health insurance does not cover your hospital stay. Depending on the plan, hospital indemnity insurance might offer a set payment for an entire stay or cover each day you're in the hospital.
Accident insurance will pay you a lump sum if an accident results in serious injuries, such as a broken bone or a serious burn. The money can cover either medical or non-medical costs.
A flexible spending account is a savings account that can be used to pay for various out-of-pocket healthcare costs, such as co-payments and coinsurance. Another benefit of FSAs is that you won't have to pay taxes on the contributions. However, you usually can only transfer the funds to the following year if your employer permits it.
An HSA is another way to save money for healthcare costs in the future. However, these savings accounts are only connected to high-deductible health plans (HDHPs). In contrast to FSAs, you can carry over an HSA's funds into the next year and keep them when you change jobs.
Critical care insurance may help save your family from tragic financial loss during a medical emergency. Supplemental insurance policies vary from one provider to another, and most are flexible and affordable and cover heart attack, emergency surgery, stroke, and sudden hospitalizations. Not all illnesses—like skin cancer—are covered. Always review the insurance policy in detail and find the right coverage for peace of mind to care for your family.
