This type of supplemental insurance plan can help with out-of-pocket expenses if you develop a life-threatening condition. Here’s how.

1. What is critical illness insurance?
2. What type of critical illnesses does my plan cover?
3. How does critical illness insurance work?
4. How can you spend your critical illness insurance benefit?
5. Can a critical illness insurance plan cover your family?
6. Can you add a rider to your critical illness insurance plan?
7. Does critical illness insurance pair well with other insurance plans?
8. How much does critical illness insurance cost?
9. Is critical illness insurance worth it?

An unexpected diagnosis can put a major strain on your health — and budget. You may have to see your doctor or a specialist more often. Depending on how serious the condition is, you might have to spend time in the hospital.

Medical bills can add up quickly. If you work for yourself, are the lone source of income in your family or don’t have a solid savings, it could put stress on your finances.

While it’s impossible to tell whether a life-threatening condition may be in your future, you can prepare for that possibility. Supplemental critical illness insurance can help ease that potential financial burden, whether it be medical or personal.

What is critical illness insurance, and how does it work? Find out below — plus, whether it might be something that’s for you.

If you got sick and had to miss work, you may need help paying your medical bills. That’s where critical illness insurance can help. Explore it today.

What is critical illness insurance?

Critical illness insurance is a type of supplemental insurance that pays a lump-sum benefit directly to you in the event of a qualifying serious illness. (There is a monthly premium for supplemental insurance that is not included in what you’d pay for your primary health insurance.) While you can buy a stand-alone critical illness plan, it’s not a replacement for traditional health insurance.

What type of critical illnesses does my plan cover?

It really depends, because critical illness insurance plans can cover a wide variety of qualified illnesses. Depending on the plan, these could include:

• Advanced Alzheimer’s disease, a disease that affects your memory and thinking skills
• Heart attack
• Life-threatening cancer
• Loss of hearing
• Loss of speech
• Loss of vision
• Major organ transplant
• Paralysis
• Stroke
• Coma
• Kidney (renal) failure
• Carcinoma in situ, or when a doctor finds “abnormal cells that look like cancer cells … in the place where they first formed and [they] haven’t spread to nearby tissue.”
• Coronary artery bypass graft (i.e., bypass surgery)

It’s important to understand that you’ll need to buy a critical illness insurance plan before you get diagnosed with one of these conditions. And you may be subject to medical underwriting. That means, if you had cancer beforehand, and it came back — i.e., a pre-existing condition — some insurance companies might deny you coverage.

That said, if you had cancer before you bought your plan but then had a heart attack while your plan was active, your plan might cover that critical illness.

Certain critical illness insurance policies may also be called “one-time pay” policies. That means that once a policy pays its benefit for a certain critical illness, the policy will be canceled. That’s even if the policyholder gets another critical illness in the same year.

How does critical illness insurance work?

Let’s say you’re shopping for a critical illness insurance plan. You may choose 1 of 5 maximum lifetime benefit amounts. These could be in levels like:

• $10,000
• $20,000
• $30,000
• $40,000
• $50,000

Typically, a benefit will pay out upon first diagnosis of a qualifying illness experienced at least 30 days after the plan becomes effective.

It’s also worth noting that some plans are guaranteed issue, meaning that you’ll receive coverage as long as you meet the age requirements. However, others may be simplified issue, meaning you may have to answer certain questions about your health history before being approved for coverage.

How can you spend your critical illness insurance benefit?

That’s really up to you. If you need the lump-sum benefit to pay for medical expenses, you can certainly do that. Those might include:

• Health insurance deductible, or the amount you pay for covered health services before your insurance company starts to pay
• Out-of-pocket medical expenses, like copayments (those are fixed fees, like $25 or $50, you might pay to see your doctor or specialist)
• Specialist treatment or rehabilitation. For instance, you might need to see specialists more often if you get a covered cancer diagnosis. Or you may need to do rehab after a heart attack.

On the other hand, you may also want to use the benefit to pay for personal expenses while you’re out of work or recovering. Those could include:

• Childcare
• Groceries
• Mortgage, rent or utility payments
• Places to stay for family members near a hospital
• Transportation to and from appointments or a hospital

A serious medical condition can quickly bust your healthcare budget. Learn how critical illness insurance can help you balance it again.

Can a critical illness insurance plan cover your family?

Yes. You can add your spouse and/or children to a policy, which may increase your monthly critical illness insurance premium. Your family will also come in at a percentage of your total coverage.

Can you add a rider to your critical illness insurance plan?

Depending on what your insurance provider offers, you may be able to add a rider to your critical illness insurance policy. (A rider is another word for an amendment to a policy that either adds, deletes or changes coverage.) Here are a few examples of riders that may be available:

• Outpatient prescription drug rider. This helps with costs of qualifying generic and brand-name prescriptions, up to a calendar year maximum (in most states, you may have a waiting period).
• Telemedicine rider. You can add coverage for virtual visits using your favorite mobile device and skip having to get transportation to and from a doctor for some common illnesses.
• Wellness rider. This could help cover the cost of a qualifying preventive care screening in a calendar year, such as a physical, mammogram or colonoscopy (in most states, you may have a waiting period).

The availability of benefits like these, their amounts and their limitations may vary by plan and state. It’s always a good idea to review the plan’s brochure thoroughly before buying critical illness insurance.

Does critical illness insurance pair well with other insurance plans?

Yes. A critical illness plan could pair well with other types of health insurance and supplemental insurance plans. For example, you might want to pair critical illness insurance with:

• High Deductible Health Plan (HDHP). This is a type of health insurance plan that has a lower monthly premium but higher deductible than other types of traditional health insurance plans. For example, a critical illness insurance benefit could help cover out-of-pocket medical costs from a long hospital stay.
• Short term medical insurance. Short term medical insurance is a type of health insurance plan that covers you for a limited amount of time. By adding a critical illness insurance policy, if you were diagnosed with a qualified medical condition, you could use that money to pay for medical expenses like deductible, copays or coinsurance.
• Term life insurance. A term life plan is a type of supplemental insurance that pays a beneficiary a death benefit if you unexpectedly pass away. The “term” in its name refers to the time period you buy it for, which could be 10 or 20 years. You could add a critical illness rider to one of these policies. That would expand your policy to provide a lump-sum benefit while the policyholder is still alive.

How much does critical illness insurance cost?

The price of a critical illness insurance plan may vary based on several factors. These could include:

• How old you are. As you get older, you may be more likely to develop a certain critical illness. That may increase your monthly insurance premium.
• The benefit level of coverage you’re buying. The higher your lifetime benefit amount (see above), the more your monthly premium will be.
• Your gender. For example, men are more likely to develop cancer than women.
• Whether you’re a smoker.

Is critical illness insurance worth it?

It depends on several factors, like the ones we listed in the previous section — plus, your financial status. But it could be particularly valuable for:

• People who are the sole income in a household — or those whose families are growing
• People with an HDHP (see above)
• People who may have limited savings for serious, long-term health issues

Imagine a benefit to help with medical expenses if you were diagnosed with cancer or had a heart attack. Explore supplemental critical illness insurance today, or call a licensed insurance agent at 1-844-211-7730.

For informational purposes only. This information is compiled by UnitedHealthcare, and/or one of its affiliates, and does not diagnose problems or recommend specific treatment. Services and medical technologies referenced herein may not be covered under your plan. Please consult directly with your primary care physician if you need medical advice. 

Sources:

Centers for Disease Control and Prevention. “Cancer and Men.” August 29, 2024. Retrieved from https://www.cdc.gov/cancer/features/cancer-and-men.html

Centers for Disease Control and Prevention. “Older Adults.” June 3, 2024. Retrieved from https://www.cdc.gov/cdi/indicator-definitions/older-adults.html

National Cancer Institute. “Carcinoma in Situ.” Retrieved from https://www.cancer.gov/publications/dictionaries/cancer-terms/def/carcinoma-in-situ Accessed January 8, 2025.

Compliance code:
51944-X-0225