What is Critical Illness Insurance?

What is Critical Illness Insurance?

by Lisa Thibodeau, April 15, 2016

Stroke. Cancer. Heart Attack.

These strike fast and are never expected.

What is Critical Illness Insurance? Simply put, it is a financial safety net. Critical Illness Insurance provides you with the money you need if you receive a life-threatening diagnosis. If you develop cancer, for example, you will receive a lump-sum cash payment to cover medical bills and any other expenses. Critical Illness Insurance can be purchased as a stand-alone policy, or you may choose to add it to a life insurance or mortgage protection policy as a rider. It’s up to you.

With Critical Illness Insurance, you and your family will be protected financially from the damage of bankruptcy or a depleted life-savings. After all, a diagnosis like cancer is devastating enough. You don’t need financial hardship on top of that.

One year ago, one of our clients experienced this exact situation. This gentlemen purchased a Life Insurance policy from Asurea and only a few weeks later learned he had cancer. Because he had decided to add Critical Illness Insurance to his new life insurance policy, he was able to receive enough money to help pay his medical bills and more.

As this gentleman discovered, cancer, heart attacks and strokes strike suddenly and leave you reeling from the news. With Critical Illness Insurance, you won’t be caught financially off guard.


  • Receive a lump-sum cash payment all at one time, tax-free.
  • Use the money any way you wish – not just for medical bills.
  • The money is paid directly to you.
  • Get as much or as little coverage you need.

Life-threatening diagnosis! What is that?

This type of diagnosis is usually an illness or condition that comes on suddenly, causing an immediate threat to your life. The main illnesses and conditions covered are cancer, heart attack and stroke. Many policies also cover organ transplants, kidney failure, bypass surgery, multiple sclerosis and more.

It’s a good idea to check the rules on preexisting conditions, waiting periods, excluded benefits and any age restrictions that may apply. You want to make sure you are buying the best policy for your unique needs!

Critical Illness Insurance is NOT

Critical Illness Insurance covers life-threatening conditions. So it will not cover health issues like diabetes or asthma even if they are severe. Also, most plans will not cover HIV or COPD. These are called life-limiting and chronic conditions, not life-threatening conditions.

Keep in mind, Critical Illness Insurance is not a replacement for regular medical insurance, but it can help pay medical bills that your regular health insurance does not cover.

Also, don’t get Critical Illness Insurance confused with Long-term Care Insurance (help with activities of daily living), Disability Insurance (monthly payments due to a disability) or Accelerated Death Benefits (terminally ill diagnosis). While these plans can play a vital role in protecting yourself financially, only Critical Illness Insurance gives you a lump-sum cash payment when you are diagnosed with a life threatening illness.

Do you need Critical Illness Insurance?

Some facts to take into consideration.

  • Medical expenses are the #1 cause of bankruptcy filings, unpaid mortgages and credit-card bills!
  • More than three-quarters (77%) of people had health insurance at the start of the bankrupting illness.
  • 5 million people will deplete their savings to cover medical bills this year.
  • 10 million people will be unable to pay their rent, food and utilities because of medical bills.
  • Serious diseases or injuries can easily cost hundreds of thousands of dollars in medical bills.

One thing that many people do not think about is that a spouse or other income-provider sometimes has to quit working in order to care for the sick person, so the family might lose more than one income.

Your job is simply to heal your body and recover from your illness.

Imagine the relief (and physical benefits!) you will experience as you are able to heal from a serious illness without also having financial problems. It’s been much documented that stress from money issues takes a toll on our health. And this is a time in your life when you need to reduce stress as much as possible.

Asurea is here to help you choose the right type of Critical Illness Insurance that will best fit your needs. To learn more about our products, or to find your best combination of coverage, contact one of our Asurea agents today.

Asurea also offers Mortgage Protection, Medicare Supplements, Final Expense, Retirement Solutions and Permanent Life Insurance.


www.nerdwallet.com/blog/health/managing-medical-bills/nerdwallet-health-study-estimates-56-million-americans-65-struggle-medical-bills-2013)  http://www.cnbc.com/id/100840148
Lisa Thibodeau

Lisa Thibodeau

Marketing Content Writer at Asurea
Lisa is the Marketing Content Writer for Asurea. She is also the founder and publisher of Childhood Magazine and a freelance journalist. She holds a B.A. in English from CSU Sacramento. Write to her at lthibodeau@asurea.com.
Lisa Thibodeau

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