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Group critical illness insurance: What is it & is it worth it?

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According to the Centers for Disease Control (CDC):

  • Heart disease is the leading cause of death for men, women, and people of most racial and ethnic groups in the United States.
  • One person dies every 37 seconds in the U.S. from cardiovascular disease
  • About 647,000 Americans die from heart disease each year, constituting 1 in every 4 deaths.

These are very telling statistics that attest to the fact that no one is immune from heart disease, which is statistically the leading cause of death in the U.S., followed closely by cancer deaths. These stats also make a pretty good case for critical illness insurance.

In this article, we'll cover everything you need to know about group critical illness insurance, including:

Let's get started.

What is group critical illness insurance?

There are two main types of critical illness insurance policies: individual and group. Whereas an individual policy must be purchased on your own from a private insurance company, a group critical illness insurance plan can be enrolled at little to no cost through an employer or association.

Group critical illness insurance policies are designed to provide lump-sum cash benefits to members of the insured group if they become sick from a wide variety of illnesses. These may include:

  • Heart attack
  • Coronary artery bypass surgery
  • Angioplasty
  • Stroke
  • Invasive cancer
  • Non-invasive cancer
  • Kidney (renal) failure
  • Major Organ Transplant
  • Advanced Alzheimer’s disease
  • Paralysis
  • Coma

If you’re currently covered or applying for coverage, check the policy for specifics on covered conditions.

How group critical illness works with health insurance

If you or a spouse work for a large employer, you very likely are enrolled in their group health insurance program. Many smaller employers also offer group health coverage. And fortunately, an increasing number of companies are offering group critical illness insurance coverage as an employee benefit.

Your health insurance is invaluable when it comes to providing financial protection for you if you fall victim to any of the illnesses listed above. The cost of treating many of these can easily exceed $100,000, an expense that very few families are prepared to absorb. Being enrolled in your company’s group health insurance plan, or having an individual/family health insurance policy, is imperative to protect you from a financial disaster.

Group or individual critical illness insurance doesn’t replace your health insurance; it complements it. While your health insurance provides payments to doctors, hospitals, and specialists, critical illness insurance provides money to you directly, at a time when you need it most.

How to use group critical illness insurance benefits

People enroll in critical illness insurance plans because they provide financial benefits paid directly to you in the form of a lump sum payment. If you have a covered illness, benefit amounts range from $5,000 to $500,000. This can help you:

  • Pay insurance deductibles and co-pays
  • Replace lost income from work you missed
  • Cover mortgage payments, utilities, childcare costs, etc.
  • Pay for experimental medical treatments and medications
  • Pay for providers not covered by your health insurance plan
  • Have funds for travel and lodging when seeking treatment away from home
  • Replace a spouse’s income as they stay with you as you convalesce

Critical illness insurance can make all the difference between staying current with your monthly expenses or falling behind as debt accumulates. Most people are simply not prepared for the financial burden that can adversely affect their lifestyle, as well as their financial security.

Emerging from your illness financially sound is the primary benefit of your critical illness coverage.

Is group critical Illness insurance worth it?

One of the most affordable benefits an employer can offer employees is critical illness coverage. Typically for less than a dollar per day, you can have the security of knowing that you’ve protected yourself and your family.

That said, enrolling in your employer's group critical illness insurance plan may be worth it if:

  • Your health insurance plan has a high deductible
  • The savings you have set aside for emergencies is limited
  • You have a history of critical illnesses in your family
  • You don’t have an individual critical insurance policy

When enrolling in employee benefits when you start a new job or selecting benefits during your company’s open enrollment period for existing employees, electing to participate in the critical illness option is worth serious consideration if any of the above conditions apply to you.

When to consider individual critical illness insurance

Although the number is increasing, many companies still don’t offer group critical insurance illness coverage. This means that you’ll need to look into purchasing an individual critical illness insurance policy. Premiums may be higher for individual plans, but most people find them very affordable and well worth the investment.

The conditions covered and the benefit amounts do not vary widely between group and individual coverage. However, getting individual coverage does have a key difference. To get started, you will need to compare rates by running some personalized critical illness insurance quotes online.

As it is with any insurance coverage, the benefit outweighs the cost when there is a medical condition requiring expensive treatment and causing lost time at work for you or your spouse. It’s costly to have a critical illness, both in terms of financial and personal costs. A group critical illness insurance policy is a benefit you’ll want to take advantage of if it’s offered to you.

Get a free critical illness insurance quote online in seconds.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

— Published July 15, 2020
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