6 Reasons You Need Critical Illness Insurance

By James O'Neal

Are you prepared for the impact a life-threatening illness could have on you and your family?

It’s not a fun question, but it’s an important one to ask.

A healthy lifestyle doesn’t make us immune to serious risks including heart attack and stroke. And according to the American Cancer Society, one in two men and one in three women will develop cancer in their lifetime.

Critical Illness insurance is the first line of defense against the unknown.

Creating a plan for life after a critical illness diagnosis is an important step in ensuring the financial protection of both you and your family.

Not sure this coverage is right for you? Here are some reasons why purchasing critical illness insurance today will help you rest easy tomorrow.

Receive a Tax-Free Lump Sum

When you collect payment through your critical illness insurance, the funds you receive are not documented as income and therefore can’t be taxed. This isn’t always the case with a payout from disability insurance.

You’ll receive a lump sum that you can spend however you wish. You won’t have insurance agents telling you where these funds can be applied.

When dealing with a critical illness, expenses will certainly go beyond doctor bills.

You may need to hire help around the house to assist with your care, take extended time off of work, purchase a vehicle, hire childcare or pay for medical expenses that your primary insurance doesn’t cover.

Those dollars will add up quickly and coverage can prevent the need to overhaul your life, move or sacrifice other necessities because of your illness.

Disability Insurance Is Not Enough

Disability insurance can be helpful but it’s just one part of the equation.

Critical illness insurance should not take the place of disability insurance. However, if you or your family member don’t qualify for disability insurance, this type of coverage becomes even more necessary.

If you do have disability insurance, it’s only a short-term solution and your benefits are given at the discretion of your employer.

You will also only receive a percentage of your salary from your disability leave and could be forced to take an unpaid leave after an allotted amount of time.

Think of critical illness coverage like a reserve parachute. We hope the first one (disability insurance) is all we need but without our reserve, we’re in serious trouble.

When illness hits, we are rarely given an exact timeline for recovery. It could take months or even years.

Critical illness insurance allows you to take the payout you receive and use it to manage your expenses in a way that makes the most sense for you and your existing lifestyle.

You may want to take the payment and spread it out, only using a designated amount of money per month for several years.

Or take the lump sum and invest it a business or other endeavor that could allow you to make passive income and inevitably result in a larger financial gain for you and your family down the road.

You Rely on One Income

Many households rely on the income of one family member. If that member were to get sick, it could seriously impact the wellbeing of the rest of the household.

The inability to pay medical bills is the number one reason Americans file for bankruptcy.

A single income household can make a family even more susceptible to this statistic. The sole breadwinner is out of work, the bills keep coming and very soon, it’s hard to catch up.

Critical illness coverage offers peace of mind so that the lost wages from one income will not drastically change your lifestyle or that of your loved ones.

You Don’t Have an Emergency Fund

Sure, in a perfect world we would store some cash away in a savings account for an emergency just like the ones mentioned above.

But the reality is, life and its’ various expenses can put a wrench in that plan.

According to GoBankingRates, more than half of Americans have less than $1,000 in their savings account.

If you don’t have a safety net should a serious medical event occur, you may find yourself in a stressful situation, struggling to pay deductibles and other out-of-pocket expenses to receive the type of care you need.

If those funds are not available to you already, signing up for critical illness coverage guarantees you will receive a cash payment when you need it the most.

The Longer You Wait, the More It Will Cost

As with most insurance plans, your monthly payment for critical illness coverage is likely to increase with age or changes to your health.

Don’t wait until you’re in a jam to enroll.

The perfect time to purchase a plan is when you’re healthy. And many times, policies of $50,000 or less don’t even require a medical exam in order to receive coverage.

Paying a modest monthly fee toward this coverage now could result in a more substantial payoff down the road if you need to collect your payout.

Financial Stress Only Hurts Your Health

If you’re trying to take care of yourself, your family and manage a serious illness, financial stress will only exacerbate an already challenging situation.

It’s important to have a contingency plan if you or a family member become ill so you’re not faced with difficult choices like whether continue living in your home or pay your medical bills.

Every person has different circumstances, but receiving a cash lump sum from your policy puts you in control of your life and the financial decisions surrounding you.

Taking the financial stress out of the equation allows you and your family to focus on the thing that matters most; your health.

See for Yourself

There’s no way around it; getting sick is expensive. We can’t predict the future but we can prepare for it.

Get a free quote and see how affordable and easy it is to receive critical illness coverage. Your family will thank you.

Have questions? We’d love to answer them. Contact us or one of our agents for more information.