Critical Illness Insurance

Critical Illness Insurance – Essential protection for a new era
David B. Berg – Director of Benefit Services
Overview
Over the years we have all experienced the changes in health insurance. Unfortunately health
insurance no longer protects us to the extent that it did even 10 years ago, so it’s no wonder
the primary reason for bankruptcy in the USA is medical expenses. The individual share of
health expenses commonly known as “co insurance” continues to increase as employers and
associations attempt to limit increases in the cost of heath insurance. Unfortunately our share
of medical expenses is often a hidden cost that we don’t discover until after a significant illness
or condition.
What has this increase in co-insurance and other expense sharing requirements do to the
value of our coverage? One consequence of this effort often is that our health insurance has a
maximum out of pocket (OOP) cost that exceeds our ability to pay. This isn’t usually
recognized until we have a major medical expense and we realize that not only do we have out
of pocket costs but that many procedures may not be covered. It is a tragic situation that often
leads to catastrophic financial consequences. However, it is also a sign of changing times when
health insurance may no longer be the “total” coverage we once thought. Not understanding
that your maximum OOP is quite large and that some treatments may not be covered can lead
to some unfortunate situations.
So why does this happen? Many of us do not review the details of our coverage to determine
what our maximum OOP cost could be in the case of a major illness or condition. Since many
plan options now have high out of pocket (OOP) limits and also limit access to specific
treatments, may contain costs on a monthly or annual basis, many employers and employees
select this option. It appears to produce a reasonable premium until a serious medical
condition occurs. We then learn that we are not only responsible for the costs of treatment but
we can no longer afford to pay for them, despite having health insurance. That is an awful
surprise for those of thus that believe we are covered. However this situation is common
enough to have driven a need for a solution.
Why the need for critical illness insurance?
When we realize that our health insurance does not cover all the treatments nor has a very
high out of pocket cost, there are situations beyond paying for the total cost ourselves or
considering bankruptcy. The situation can be solved quite easily with Critical Illness
insurance. Critical illness insurance is medical insurance that pays a lump-sum benefit upon
diagnosis of a critical illness or condition. A critical illness insurance payout helps you avoid
the financial strain a major illness can create so you can focus on your recovery. The policy can be used to supplement your health insurance for the specific main diseases.