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Nearing Retirement? How Buying Critical Illness Insurance May Protect Your Savings

Nearing Retirement? How Buying Critical Illness Insurance May Protect Your Savings

Posted May 29, 2013 by Author

As you save for retirement and the big day nears, the last thing you want is a situation that necessitates staying in the workforce longer. Securing coverage such as critical illness insurance can be a smart financial investment.

Unexpected critical illness such as a heart attack, stroke or cancer can strike at any age, and they are costly. The average total cost of a severe heart attack, including direct costs such as medical charges and indirect costs such as time off work, is about $1 million, according to a CBS News report citing the National Business Group on Health. Individuals in their 30s or 40s have more time to recover from any financial setback they may cause than those in their 50s.

What is critical illness insurance?

Critical illness insurance is not major medical insurance. It is additional coverage that pays a lump-sum cash benefit upon diagnosis of covered medical conditions such as heart attack, stroke, cancer, major organ failure, coma, severe burn and other unforeseen illnesses. This cash benefit can help alleviate financial strain that comes with serious illnesses in the form of missed work and increased expenses.

People are living longer and surviving serious diseases and medical conditions more than they have decades past. The five-year survivalrates for invasive cancer in those under age 65 is 72.3 percent, according to the SEER Cancer Statistics Review; most heart attack patients return to work within 2 or 3 months; and the death rate associated with stroke fell 34 percent from 1999 through 2008. Critical illness insurance helps ease financial aftermath of surviving, so you can focus on recovery and enjoy the life ahead of you.

But I have a great health plan

You might have truly top-of-the-line major medical insurance and still find yourself responsible for some, if not many, out-of-pocket costs. You must also factor in time off work, additional fuel usage and transportation to and from medical appointments, and other unforeseen costs.

The extra cash provided by a critical illness plan could mean the difference between dipping into your retirement savings and losingvaluable dollars. Critical illness benefits may be used toward your health insurance plan’s deductible, uncovered medical costs, and even expenses unrelated to medical bills. Critical illness benefits can be applied towardexperimental treatment, specialty drugs, transportation to and from medicalappointments, specialist care, and out-of-network care, among other things. It can even be used for daily household expenses, car payments and other things for which you need help paying.

What will it cost me?

The monthly premium for a critical illness plan varies based on factors such as age, tobacco use, and the dollar amount of coverage selected, which may range from $20,000 to $50,000 dollars. Critical illness plans involve some underwriting; however, it is far simpler than applying for a major medical plan. Applicants typically answer some health questions, provide their height and weight, and consent to a Medical Information Bureau report.

The additional cost should be minimal compared to your health insurance premium and may go a long ways in keeping your hard-earned retirement savings safe for the time you planned to use them.

Talk to a health insurance agent or contact healthedeals.com for more information on critical illness insurance plans and what coverage fits your needs.