Critical Illness Insurance

Following a wave of Americans who were forced to turn to bankruptcy after a major illness, a financial product called critical illness insurance was created. This specialized product provides that an insurer is made to pay the holder of the insurance a specified lump sum payment of cash if he or she is diagnosed with a range of serious illnesses. It can act as part of a package of insurance products that protect workers through plans offered by their employers.

When faced with such illnesses – primarily cancer, stroke and heart attack – critical illness insurance provides an influx of cash at a point in time when it is most needed. The burden of surviving procedures such as heart transplants, kidney failures, angioplasty, coronary bypass surgery or long term effects like paralysis is high, thus something is required for most people to get through such an episode. Considering that medical issues are the primary cause of bankruptcies, this is an insurance that is forward-looking toward the possibility of severe financial consequences when struck with major illnesses that effect more and more people every year.

Here’s how it works. When a policyholder is diagnosed by a certified physician with a disease or condition covered under the insurance, the insurer will pay a single payment of cash to the policyholder ranging from as little as $20,000 to as much as $2 million. In some cases, the policy will be structured to give payments as regular income rather than one lump sum. Policies can also cover more than simply conditions and diseases. They can also cover major surgical procedures such as an organ transplant or heart bypass surgery. Thus, when undergoing such a procedure, the policy will pay out the specified lump sum payment. Moreover, in some cases, policies will instead pay the provider of the health services instead of the policyholder.

Mostly, however, payments are made to the policyholder. This provides multiple benefits, providing for the following:

money to pay for uncovered, experimental treatment
money to travel for treatment
money to pay bills such as insurance premiums
money to replace a partner’s income as they act as a caretaker
money for smart miscellaneous uses