Thousands of courses for $10 728x90

الأحد، 2 فبراير 2020

Critical Illness Insurance: How to Determine If It’s Worth It

Heart attack. Stroke. Kidney failure. Cancer. 

They may not be fun to think about, but they might be worth preparing for — and that goes for your finances, too. According to the National Cancer Institute, the cost of cancer treatment commonly tops $10,000 a month… and that’s not counting peripheral expenses, like job loss or in-home care.

So when you see the option for critical illness insurance in your employee paperwork, you may be tempted. But what exactly does this extra coverage actually cover? And is it worth it?

What Is Critical Illness Insurance?

Critical illness insurance, also known as catastrophic illness or dread disease insurance, is an additional health insurance policy that can help cover the exorbitant costs of serious maladies. It’s generally paid out in a lump sum and can be used for non-medical costs related to the disease, like transportation or child care. 

As with any other health insurance product, your coverage eligibility and the price of your premium is determined based on a variety of demographic information, including age, sex, current health and family medical history — but some of these plans do promise to pay out up to $100,000.

Given that they start as low as $25 per month, it may sound like a no-brainer. After all, these bogeys are called dread diseases for a reason. Even with traditional insurance coverage, annual limits and astronomical costs mean a major illness can bankrupt a family. In fact, medical expenses are the leading cause of bankruptcy filings in America. 

That said, even a small monthly cost is a waste of money if the policy doesn’t come through when you need it. 

Which, as it turns out, it may not.

Is Critical Illness Insurance Worth It?

Here’s the thing: Critical illness coverage only covers a very select, small number of diseases — and the way those diseases are described in the fine print could mean you have trouble getting your benefits even if you are diagnosed. 

Benefits are only paid out if your disease meets certain coverage circumstances. For instance, your cancer diagnosis may not be enough to trigger payment if it hasn’t spread or is not yet considered life-threatening.

What’s more, the specific illnesses these plans cover may be the scariest and best-known, but that doesn’t mean you’re actually likely to get them. 

“People greatly overestimate their risk of getting cancer at any one time compared to getting lots of other conditions that are less frightening but also very expensive,” said Timothy Jost, law professor emeritus at Washington and Lee University, to Consumer Reports.

What’s more, these plans’ premiums increase as you age, just like traditional insurance — and may even reduce or drop your benefits once you reach a certain age.

ERISA stands for Employee Retirement Income Security Act, and it’s a federal law that sets the minimum standards for health insurance and other retirement plans offered by private insurers.

That said, these plans are sometimes offered for very low rates, especially through the workplace. And if you’re like me (which is to say, a raging hypochondriac), you may think even a little bit of peace of mind is worth it. If the coverage is offered by your employer, ERISA law means you’ve got  “some pretty good remedies if insurance doesn’t do what it’s supposed to do,” said Marc Dann, says consumer-focused attorney Marc Dann of Ohio. 

If you’re tempted by these coverages, he went on, they might work for you… if you take the time to fully understand them.

“Be an educated consumer and read the fine print,” said Dann. “We’ve gotten so used to clicking ‘yes’ on terms and conditions, but when it comes to this kind of insurance, it’s critical to read the fine print — and if you don’t have the time or disposition to do that, I think it’s probably not for you.”

Alternatives to Critical Illness Insurance

Should you decide to pass on critical illness insurance, what alternatives are available to ensure a future illness may not render you bankrupt?

Well, for one thing, you might consider bulking up your traditional health insurance policy. Although more comprehensive coverage may lead to a higher premium today, it could also mean lower out-of-pocket maximums down the line. 

You could also take advantage of a health savings account, or HSA, which offers tax benefits and allows you to use the money for a variety of qualified medical expenses at your own pace. However, you’ll need to be enrolled in a high-deductible health plan, or HDHP, to qualify.

Unfortunately, there’s no easy answer to the American healthcare problem — for now. 

Jamie Cattanach’s work has been featured at Fodor’s, Yahoo, SELF, The Huffington Post, The Motley Fool and other outlets. Learn more at www.jamiecattanach.com.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.



source The Penny Hoarder https://ift.tt/31jcOqp

ليست هناك تعليقات:

إرسال تعليق