Critical Illness

Critical health conditions are often expensive to treat. People can actually go bankrupt because of medical expenses. Critical health insurance assists families and individuals while they are struggling to pay for medical care.

What is this type of coverage?

Critical illness insurance covers three critical health conditions: heart attack, stroke, and cancer. The policy may cover other things as well, depending on the policy. Conditions that result in paralysis, kidney failure, and organ transplants may be included. Critical illness coverage is a supplement to traditional health insurance. Most people who file for bankruptcy because of medical expenses have health insurance, so supplemental insurance is something worth considering.

How it Works

The insurer pays a lump sum to the policyholder if they are diagnosed with an illness listed in the policy. The money is tax free, but the plan usually stipulates the policyholder must survive a certain number of days after the diagnosis in order to receive the payment.

Policies usually offer a lump sum between $5,000 and $50,000. Some policies pay more, but that means the premiums are higher. Some plans offer portable coverage and coverage for spouses.


The biggest benefit is that this coverage helps pay the costs associated with a serious illness. The family will not find itself bankrupt from an inability to pay medical expenses. It helps to know all will not be lost because of financial hardship.