Critical Illness As a Supplement to Limited Medical Plans
The nature of Critical Illness insurance makes it a perfect supplement for countless insurance products. Detractors may argue that Critical Illness insurance isn't as comprehensive as core products, such as Health Insurance or Disability Income insurance - and this would be quite true. But that very characteristic is what makes Critical Illness insurance the ideal complement to so many other core, and even supplemental, products. This discussion touches on how Critical Illness insurance complements Limited Medical coverage.
For those of us who are part of an industry that seems to focus heavily on catering to the insurance needs of the affluent, it is easy to forget that the overwhelming majority of people in the U.S. have no concerns about estate preservation. Their unsettling reality is to live paycheck to paycheck. In 2012 bankrate.com reported that 28% of families in the U.S. had no savings at all. An additional 20% had barely enough to cover three month’s worth of living expenses.
Many of these individuals are unemployed, part-time or seasonal workers, or are underemployed. Others are consultants or small business owners without the resources or buying power to secure major medical coverage. As a result, many people in these and other situations look to limited medical plans as an affordable alternative.
Limited medical plans are low cost alternatives to Major Medical coverage. They are designed to assist with day-to-day medical expenses, such as office visits, and routine care, such as a sprained ankle, blood pressure checks and other minor ailments. Limited medical plans have an annual cap on the amount the insurer will pay for medical expenses, and some policies have a per visit limit. Some plans feature deductibles and co-payments under lower annual maximums than major medical plans.
These plans are beneficial to many individuals for minor everyday health issues. Some may even provide coverage for moderate care, such as diabetes or minor surgeries. Unfortunately, little protection is offered when a catastrophic medical event occurs. Insureds who are struggling with cancer or renal failure, have suffered a heart attack or stroke, or may be in need of a major organ transplant, may face financial ruin just as they fight just to stay alive.
Critical Illness insurance, though never intended to replace the core medical coverage, is well suited to complement medical plans. This is especially true for limited medical plans.
Simply by layering a small Critical Illness benefit of $10,000 - $20,000 on top of the limited medical plan, insureds will gain access to life saving and rehabilitative care that might otherwise have been unavailable. The simple lump-sum cash payment of a Critical Illness policy, tied with the limited medical plan, provides the insured with a truly “consumer-driven” healthcare opportunity that enables them to research and weigh the best care available.