Critical illness insurance offers peace of mind and financial security for employees that experience a sudden serious illness.
According to MetLife’s employee benefits trends study, 46% of employees consider critical illness insurance a must-have, making it and important consideration for employers that want to attract and retain the best talent available.
Here’s everything you need to know about critical illness insurance.
What is Critical Illness Insurance?
Critical illness insurance is a form of insurance that provides you with a lump sum payout should you be diagnosed with an illness covered by your policy. The money can be used to cover medical bills, lost income, make home modifications, or just help provide peace of mind during a difficult time. It is also known as serious illness insurance and catastrophic illness insurance.
This coverage is meant to ensure policyholders get the financial support they need after surviving a heart attack, stroke, or another serious illness that could leave them with insurmountable medical bills.
Without critical illness insurance or a health savings account, certain illnesses require expensive treatment that can quickly drain your health insurance coverage.
Critical illness insurance can be offered as an ancillary benefit when putting together an employee benefits package to ensure employees are taken care of in the event of a serious illness. This coverage helps employees feel secure, knowing they’ll have financial help if something catastrophic happens.
You can purchase critical illness insurance on its own or add it to an existing health, disability, life, or long-term care policy.
What Does it Cover?
Critical illness insurance covers serious and traumatic illnesses requiring costly treatments and extensive recovery times.
This may include the following:
- Heart attack
- Coronary bypass surgery
- Organ transplants
- Renal failure
- Loss of vision
- Loss of speech
- Loss of hearing
Specific coverage will vary depending on the policy, so be sure to review your policy to understand what illnesses are and are not covered.
What Can You Use the Cash Benefit For?
Critical illness insurance provides a lump-sum cash payment when a policyholder or group member experiences a covered illness.
This means that you can use the payment from your policy to cover whatever expenses you deem necessary, ranging from mortgage and rent payments to groceries, out-of-pocket medical expenses, and prescriptions — the choice is yours!
The exact cash benefit amount will depend on your policy, so check with your insurer for more information.
How Does Critical Illness Insurance Work?
So how does critical illness insurance work?
When purchasing a policy, you’ll choose your coverage level to determine how much money you’ll receive if you are diagnosed with an eligible condition.
If you then suffer a qualifying illness while your policy is active, your insurance policy will pay you your entire benefit amount as a lump-sum cash payment, which you can use to cover living expenses, medical bills, or anything else.
Pros & Cons of Critical Illness Insurance
Critical illness insurance offers valuable coverage that ensures group members can maintain financial security after being diagnosed with a serious condition.
Here are a few pros and cons of critical illness insurance to consider.
Advantages of critical illness insurance
The main benefit of critical illness insurance is that it offers financial support after the diagnosis of serious conditions. This gives group members peace of mind knowing they’ll be taken care of if they receive a surprise diagnosis.
Cash payments are tax-advantaged and can be used for virtually any expense. When purchasing a policy, you can choose your maximum lifetime benefit amount to align with your employee’s needs.
Critical illness insurance is also very affordable, making it an important consideration for employers that want to offer a competitive benefits package.
Disadvantages of critical illness insurance
The main drawback of critical illness insurance is that some plans only cover a very limited selection of conditions. This can leave some policyholders feeling that this coverage may not be worth it.
However, this issue can be solved by selecting a plan offering broader coverage and larger benefits.
How Much Does Critical Illness Insurance Cost?
The cost of ancillary critical illness insurance will largely depend on a few key factors, including your total benefit amount, your group size, and other factors like your industry and claims history.
With that in mind, critical illness insurance can be as low as $25 per month, making it an affordable option for employers that want to ensure their workforce has access to comprehensive health coverage.
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Ancillary insurance is a great way to round out your employee benefits package and increase employee satisfaction. Critical illness insurance, in particular, is an affordable coverage option that provides peace of mind and financial security to your employees.
At KSA Insurance, we work with employers in South Carolina and across the southeastern United States to help them choose affordable ancillary benefits and insurance policies that protect their employees against a variety of common risks.
Contact us today to get a quote and learn more about ancillary benefits for employers.