Critical Illness Insurance Can Offer Financial Support, Peace of Mind for Employees

For nearly 20 years, Erin Thompson said she lived in fear of the inevitable. “My grandmother had breast cancer, my mother had breast cancer, and my sister had breast cancer,” said Thompson, a medical records specialist in Fort Myers, Florida. “When I was diagnosed with cancer in 2012, it wasn’t really a surprise.”

Thompson said that because she was very proactive about examinations, her doctor was able to catch it early. She is currently living cancer-free. What did surprise her, though, were the high costs of treating the disease. “You forget about the incidental things–the time off work, the additional treatments, the car payment,” Thompson said. “My insurance company covered a lot, but they didn’t touch the stuff like additional costs for daycare for my kids, the time I didn’t get paid after my disability ran out. There’s a lot to think about.”

Situations like Thompson’s are becoming more prominent as people begin to realize the limits of their healthcare insurance. Critical care insurance usually offers a lump-sum payment after a covered critical illness is diagnosed, and can help pay for many of the additional expenses Thompson mentioned. In an article for Consumer Reports, Tracy Anderman explained critical illness insurance as follows: “Employees typically pay the critical illness insurance premium at a discounted group rate. The policy they buy then helps cover out-of-pocket expenses related to one illness or a number of illnesses, depending on the kind of policy they choose. Payments can go toward out-of-pocket medical costs, including co-pays and deductibles, and nonmedical expenses, such as transportation, household bills, and childcare.”

As the policies gain favor with consumers, today’s employers are taking notice. According to Aflac, 44 percent of employers offer critical illness insurance, up from 24 percent in 2011.

Who Is It for?

Is critical illness insurance for everyone? It depends on your current situation, of course, but employees and employers should work together to gain as much information as possible. While low premiums are a strong draw for many employees, critical care plans may not be for everyone. “Companies that provide this coverage should fully disclose the risks and the likelihood you would ever use it,” said Timothy Jost, law professor emeritus at Washington and Lee University in Anderman’s Consumer Reports story. “There needs to be protection for consumers to ensure that they’re getting value for their coverage.”

Pam Jenkins, assistant vice president for product development at Colonial Life & Accident Insurance, wrote that critical illness insurance is increasingly popular with employees thanks to a few key components:

• Simplicity: The product is easy to understand. It’s easy to enroll, and since payments are made in a lump sum, there’s less to explain.
• Flexibility: The payment can be used for medical and non-medical expenses, like lodging, home modifications, transportation, and more.
• Meets a need: Most healthcare plans don’t fully cover critical illnesses, leaving patients and their families vulnerable to debt. Critical illness insurance can close some of the existing payment gaps with the coverage and provide some peace of mind to patients and their families.

Options Are Good

While he or she is healthy, a potential stroke sufferer may not be thinking about the need for a ramp to the front door or widened interior doorways to accommodate a possible wheelchair. A lump sum of $50,000 or more from a critical illness policy can be a godsend. Still, employees will determine if they can afford to weather the uncovered costs of a serious illness, but it’s a plus for all parties if they know they have options through their coverage at work.