Here are some basics:
- Should you be diagnosed with a critical illness or suffer a stoke or heart attack, you will have to continue paying your health insurance premiums – and it is very likely you will not be working for a while. The premiums will have to come from savings or another source. Say it takes 12 months to recover and the premium is $300 a month. That’s $3,600 right there.
- Your health plan will have a deductible – $1000, $3000, $5000 per year or maybe more. Very high deductible plans are common today. Then there are co-pays. Drug costs are very high, especially for serious illness. Sometimes generics just don’t work. You could be looking at $5,000 or $10,000 worth of uncovered expenses even with a good health plan. Keep in mind that nearly 2/3 of US bankruptcies result from health-related problems (and some 80% of these people have health insurance!)
- And, of course, all the other bills – mortgage, utilities, phone and cable, car, car and homeowner’s insurance, and so on – are still due.
None of this is to scare you! But it should make you see that maybe this critical illness coverage isn’t such a bad idea after all!
If you are beginning to consider it, then, here are some other ideas:
- One way to figure out how much to buy is to take your monthly mortgage payment and multiply it by 24 (2 years) and then add $5,000 to cover health premiums and uncovered expenses. You can also factor in any credit cards you might want to pay off.
- You can buy as little as $5,000 in CI coverage, or as much as $1 million. The insurance can be a stand alone policy or added as a rider to a disability plan or other insurance product.
- There are fully underwritten plans and simplified issue plans. Your current health is certainly a factor in deciding the cost and availability: height and weight matter; tobacco use very significantly increases the likelihood of your incurring a critical illness. And of course, check with your employer to see if a group plan is an option.
- Now, get yourself a basic quote. Go here for a quick estimate.
Next, we will look at policy language and details.