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AVMA LIFE Educational Resources

A Simple Guide to Critical Illness Insurance

Posted on 8/19/2020 by AVMA LIFE
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In 2020, an estimated 1.8 million Americans will receive a cancer diagnosis. Another 805,000 Americans will have a heart attack. And more than 795,000 will suffer from a stroke.

Treating these types of health emergencies can be costly, putting major strain on your finances. In fact, one poll revealed about one-fourth of U.S. adults say they or a household member have had problems paying medical bills in the past year, and about 12% of Americans say the bills had a major impact on their family.

To help protect yourself from the financial problems that can come with a health emergency, it's important to consider insurance coverage.

While your traditional health insurance and disability coverage may help cover some of your costs, critical illness insurance can help fill in some of the gaps.

Read on to learn more about critical illness insurance and whether it's a coverage you and your family should consider.

What Is Critical Illness Insurance?

Treating a life-threatening illness, like a heart attack, cancer, or renal failure can be incredibly expensive. Oftentimes, your traditional health insurance won't cover all the costs.

In addition, disability insurance, which can help replace a portion of your income if such an illness leaves you unable to work, may fall short for those who face immediate cash needs when a critical illness strikes.

For these reasons, critical illness insurance is often purchased to supplement your traditional medical insurance and disability coverage.

It can pay a lump sum benefit—meaning you can receive one cash benefit all at once—if you suffer from a specific critical illness.

What Is Considered a Critical Illness?

The definition of a critical illness varies depending on your insurance plan. The AVMA LIFE Trust Critical Illness Insurance plan specifically covers:

  • • Cancer
  • • Heart attack
  • • Major organ transplant
  • • Renal failure
  • • Stroke
  • • Carcinoma in situ

 

If you're diagnosed with a covered critical illness, the plan can pay 100% of the cash benefit on your policy (25% for carcinoma in situ).

For example, let's say you were approved for a $100,000 critical illness insurance benefit. If you suffer from a heart attack, the plan can pay you $100,000 to be used however you choose.

You can refer to the AVMA LIFE Trust Critical Illness Insurance brochure for more details on the above serious illnesses.

What Can the Cash Benefit Pay For?

Your critical illness insurance benefit is paid directly to you. It's designed to provide you with financial support so you can focus on recovering, rather than mounting bills.

Often, the money is used to help pay for medical expenses, including:

  • • Copays and deductibles
  • • Treatments not covered by your traditional medical insurance
  • • Transportation expenses, including traveling to and from treatment centers, retrofitting your vehicle, or installing lifts in your home
  • • Private nursing costs

 

But many find it useful to help cover everyday expenses too, like:

  • • Mortgage and rent
  • • Utilities
  • • Groceries
  • • Childcare

 

You can even use the money to help pay for a restful place to recuperate.

Who Should Consider Critical Illness Insurance?

According to a study by academic researchers, 66.5% of all bankruptcies were tied to medical issues—either due to the high cost of care or missed work.

Another poll found that 34% of insured adults say it's either "very difficult" or "somewhat difficult" for them to afford their deductible.

So if you want to help protect yourself against bankruptcy or you don't have money in savings to cover a high deductible, then you should consider critical illness insurance.

You may also want to consider this coverage if you have a family history of any of the covered illnesses.

Next Steps

As a member of AVMA, you can apply for up to $100,000 of critical illness insurance for you and your spouse through the AVMA LIFE Trust.

Learn more about and apply for AVMA LIFE Trust Critical Illness Insurance online today.

You can also contact your agent or call an AVMA LIFE representative at 800.621.6360. They're very knowledgeable and are happy to help!

For more details on AVMA LIFE Trust Critical Illness Insurance, including features, costs, eligibility, renewability, exclusions, and limitations visit our product page. Coverage is underwritten by New York Life Insurance Company, NY, NY 10010 on group policy form GMR.

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