Critical illness insurance: How much is enough?


Critical illness insurance: How much is enough?

So, you’ve decided that critical illness coverage is critical protection for you and your family, but now you’re wondering how much coverage is enough. That’s a great question! We’re here to help with that.

If you go through a serious health event, you want to be able to focus on getting better without having to worry about money. However, even with health and disability insurance, the reality is that being sick not only affects your medical health, but your financial health as well. And it could take years to recover from it.

Critical illness insurance provides a lump sum of money for a qualifying event. And that lump sum can be spent anyway you’d like.

Rula Kibler, product manager at Colonial Life, recommends asking yourself these three questions to help determine the right amount of critical illness coverage for you and your family.

  • Do you want your medical expenses to be taken care of?
  • Would a spouse with an income be your caretaker?
  • Do you want to preserve your standard of living?

Taking care of medical bills

If you’re diagnosed with a critical illness, expect the medical bills to start pouring in. Between diagnostic services, visits to the emergency department, specialist visits, surgeries and prescriptions, you can quickly reach your out-of-pocket limit. And since treatment may span across multiple years, you might have to pay your out-of-pocket limit more than once.

Kibler recommends buying enough critical illness coverage to cover out-of-pocket costs, surprise medical bills and transportation and lodging to and from the hospital treatment center.

Keeping up with everyday expenses

Besides medical expenses, your finances may be affected in other ways. Perhaps the biggest impact is missed income if you’re unable to work or if your spouse is taking time off to care for you during your recovery.

Disability insurance can definitely help with this. However, it typically replaces 60 percent of your income at a time when expenses are really racking up.

The combination of lost income and medical bills can make it difficult to manage everyday expenses. Because of this, Kibler recommends buying at least enough coverage to help pay regular expenses like mortgage, food and clothing on top of medical expenses.

Preserving your standard of living

A critical illness can also have a lasting impact on your family’s standard of living and limit your capacity to save long term. Saving money can be a challenge even without having to deal with additional medical bills and health issues.

Whether you want to save enough to send your kids to college, move to your dream house, or retire, Kibler recommends you consider enough critical illness coverage to help you and your family stay on track to achieve your life goals.

“More people are surviving major health events,” Kibler said. “Critical illness insurance can help you during recovery so that you can get back to living your life.”


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