Over two-thirds of bankruptcies among American families result from medical bills.
Thanks to modern medical technology, your chances of surviving cancer, a stroke, kidney failure, a heart attack, or other physical illness are better than ever. But are you prepared to handle the financial toll your medical bills will bring in the coming years? If your family would suffer financially from a recovery, you need critical illness insurance, the latest financial product from Catholic Financial Life.
The History of Critical Illness Insurance
The idea for this insurance plan originated from Dr. Marius Barnard, a South African heart surgeon who witnessed first-hand the financial suffering survivors of heart attacks endured. Of course, it was a good thing that more and more people were surviving heart attacks, but the medical bills that followed in years of recovery were nearly killing them. Barnard worked with insurance companies on a new product to address these patients' needs. "Dread disease" insurance was launched in 1983. He has travelled to countries around the world promoting this insurance plan.
What Sets Critical Illness Insurance Apart from Life Insurance?
With life insurance, your family doesn't reap the benefits until a death occurs. Critical illness insurance, on the other hand, lets you take advantage of your investment while you're still living. Without having to go through underwriting and other standard insurance approval procedures, you receive a lump sum cash benefit upon diagnosis of a critical illness. Heart attack, cancer, and stroke are most common, representing 85 percent of the claims, and renal failure and organ transplants are also common coverages.
Flexibility is perhaps the best part about critical illness insurance. You can spend your lump sum cash benefit on anything you please. If you need help taking care of a spouse who has suffered a stroke, you can hire an in-home private nurse. If you have just been diagnosed with cancer and want to give your family some much-needed fun and relaxation, you can take a vacation.
In addition, you can receive 100 percent of the benefit as much as three times. Critical illness insurance is split up into three categories: cancer, heart attack and stroke, and other illnesses like advanced Alzheimer's or kidney failure. If, unfortunately, you suffer from more than one illness, you will receive 100 percent of your benefit for each illness, as long as they fall within different categories. You do not need to pay a higher premium to receive this benefit.
Why You Should Have It
Modern medicine and technology has dramatically changed the financial profit landscape. In the words of Dr. Barnard, "You need critical illness insurance not because you are going to die -- but because you are going to live." Here are some statistics that might further convince you about the importance of critical illness insurance.
- Medical problems contribute to up to 62 percent of personal bankruptcies.
- Approximately 90 percent of disabilities are caused by illness rather than injury.
- Nearly 1.4 million Americans suffer a heart attack each year. The odds of dying have decreased by 63 percent since 1950.
- The average brand name cancer drug in the U.S. costs $10,000 per month.
- The average cost of treating a heart attack in 2011 was $72,000. For a stroke, it was $61,000.
- Most Americans have around only $10,000 in emergency-fund savings.
How Much Coverage You Should Have
People ages 18 to 64 can purchase critical life insurance. Coverage can be renewed until age 75. The sooner you have it, the better. Benefit amounts range from $5,000 to $50,000, so how do you know how much coverage is right for you? A good rule of thumb for figuring this out is to take the amount you would spend on six months of your mortgage payments or rent. If you pay $1,000 per month for your apartment, you would spend $6,000 on your critical illness insurance. If you pay mortgage on your $1 million home, your insurance investment would obviously be much higher.
You may think that you can't afford to have critical illness insurance, but really, you can't afford not to have it.
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