The number of accepted eligible illness has increased from 13 to 19, making millions of more people consider purchasing a policy.
Critical illness insurance policies are used to bridge the gap between health insurance and the cost of medicines and healthcare that is caused by several health conditions. Healthcare related costs are the leading cause for individuals filing bankruptcy. More than 2 million individuals filed bankruptcy stating medical bills as the leading cause, which is close to 60 percent of all bankruptcies.
Critical illness insurance is used to cover the cost of deductibles, alternative treatments, out-of-town care, or other unrelated costs stemming from the illness like mortgage, utilities, and car payments.
Critical illness insurance was originally developed in the 1990s (the first policy was sold in 1996) to help employees cover medical expenses, but has seen a recent surge in popularity. More than 600,000 Americans currently have a critical illness policy through their employer or on an individual plan.
Of the 59 carriers that Gen Re studied, 41 of those insurance companies were already selling 73 separate critical illness policies. Of the 18 companies that were not selling any critical illness policies, they were preparing to enter the market.
Many major carriers are starting to offer critical illness policies to supplement their health insurance plans. Major carriers offer policies that range from $10,000 to over $50,000 in coverage, or in some cases $1 million. Monthly premiums vary on the age and health of the applicant. For a standard $10,000 policy, a 50-year-old will pay around $15 each month.
Anyone suffering from a critical illness is faced with paying large portions of their paycheck to doctor visits, medications, health insurance, and life insurance. Treatments and physical therapy sessions can cost several thousands of dollars each treatment. Medications can cost up to $10,000 to fill, some of which are not covered by typical health insurance plans. These added expenses can be difficult, or in some cases impossible, to cover for anyone without critical illness insurance. According to a research study done by Sun Life Financial, the average medical bill will cost over $7,500 out-of-pocket.
Being diagnosed, or suffering from, a critical illness is one of the leading reasons that Americans look to establish a life insurance policy. Life insurance for anyone diagnosed with cancer can cost thousands of dollars each month. While some life insurance
As of 2015, 19 conditions were listed as being eligible for policyholders to receive their critical illness insurance payout. Critical insurance plans cover the “big three” illness: heart attack, cancer, and stroke, but depending on the policy it may also cover: angioplasty, kidney failure, organ transplant, paralysis, heart transplant, and several others.
“Critical illnesses” are becoming more prevalent in the United States. 1.4 million Americans with cancer, 785,000 Americans will have a heart attack, and close to 600,000 with experience their first stroke. Between these three critical illnesses there are 2,785,000 Americans every year, the vast majority of these will survive.
Because of the increase in these conditions, insurance agents are requesting that more insurance carriers begin offering critical illness policies. Similarly, many companies are offering policies to their employees to supplement their health insurance.
Critical illness policies are expected to grow quickly as information continues to spread of these insurance policies. These insurance policies are expected to have the largest growth in the insurance industry over the next three years.
The rise in popularity of critical illness insurance plans will have a significant impact on insurance providers, employers, and employees. It’s expected that the number of bankruptcies will slightly decrease as the number of policies increase.
