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Does Critical Illness Insurance Cover Preexisting Conditions? Here are the Facts

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Few things are more devasting than the diagnosis of a critical illness. In addition to difficult health issues, patients and their families may also struggle with associated financial costs. Critical illness insurance can help.

What is critical illness insurance?

Critical illness insurance is not traditional health insurance. It does not cover routine or preventative care, nor does it cover specific medical costs. It does not replace health insurance. However, it can provide a good supplement to health insurance.

If you have critical illness insurance and you experience a covered condition, you will receive a lump sum payment, which you can spend as you see fit. You can use the money to cover medical bills, but you can also use it for other purposes, such as:

·         Insurance premiums, deductibles and copays

·         Childcare or home health care

·         Gas or transportation to and from appointments

·         Household expenses such as food and electricity

As you might imagine, major illnesses often result in additional expenses. You may be unable to work for a considerable amount of time, and the loss of an income can be financially devastating. Loved ones may also miss work to help with your care and appointments. If your treatment team is not local, hotel rooms and transportation costs can add up.

The combination of medical costs and other expenses can be too much for families. According to a Kaiser Family Foundation report, many Americans struggle to pay medical bills, and 11 percent say they’ve had to declare bankruptcy at least in part due to medical bills.  

Does critical illness cover preexisting conditions? What does it cover?

Critical illness insurance does not cover all illnesses. Coverage is limited to the conditions listed in the policy, which will generally include certain types of cancer, stroke, heart attack and organ transport.  Other conditions, including chronic, will be excluded.

You may be able to purchase a critical illness insurance policy without undergoing a medical exam. However, preexisting conditions may be excluded. These are conditions that that were diagnosed and/or treated during the period before coverage. Under the Affordable Care Act, health insurance plans must provide coverage for preexisting conditions, but this rule does not apply to all types of insurance products, including critical illness insurance.

In critical illness insurance policies, preexisting conditions may be excluded from coverage for a set period of time. For example, preexisting conditions might not be covered for the first year that the policy is active, but coverage may be possible after that. When preexisting conditions are excluded, secondary conditions resulting from preexisting conditions may also be excluded.


Is critical illness insurance right for you?

If you are thinking about critical illness insurance, consider the pros and cons.

·         Pros: The premiums can be surprisingly low for the coverage limits available. For example, the monthly premium can be as low as $20, depending on the policy and the insured. The cash benefits start at around $10,000 and go up significantly from there. A lump sum of cash can help ease your financial stress so you can focus on recovery, if you’re ever diagnosed.

·         Cons: Critical illness insurance policies tend to offer very restricted coverage, and if you have a preexisting condition, it will likely be excluded from coverage.

The bottom line is that critical illness insurance can provide invaluable financial support when you need it most. Just be sure to read the policy carefully so you understand the exclusions before you buy.

Have questions about critical illness insurance? An InsuranceLineOne licensed insurance agent can help you. Request a critical illness insurance quote here.





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