So, you’ve decided that critical illness coverage is critical protection for you and your family, but now you’re wondering how much coverage is enough. That’s a great question! We’re here to help with that.
If you go through a serious health event, you want to be able to focus on getting better without having to worry about money. However, even with health and disability insurance, the reality is that being sick not only affects your medical health, but your financial health as well. And it could take years to recover from it.
Critical illness insurance provides a lump sum of money for a qualifying event. And that lump sum can be spent anyway you’d like.
Carlos Bello, director of product and market development at Unum, recommends asking yourself these three questions to help determine the right amount of critical illness coverage for you and your family.
- Do you want your medical expenses to be taken care of?
- Do you want to be able to keep up with everyday expenses?
- Do you want to preserve your standard of living?
Taking care of medical bills
If you’re diagnosed with a critical illness, expect the medical bills to start pouring in. Between diagnostic services, visits to the emergency department, specialist visits, surgeries and prescriptions, you can quickly reach your out-of-pocket limit. And since treatment may span across multiple years, you might have to pay your out-of-pocket limit more than once. Ouch!
Because of this, Bello recommends buying enough critical illness coverage to cover out-of-pocket costs, surprise medical bills and transportation to and from the hospital.
Keeping up with everyday expenses
Besides medical expenses, there are also some indirect but costly ones that come with a serious illness. Perhaps the most important is missed income if you’re unable to work.
Disability insurance can definitely help with this. However, it typically replaces 60 percent of your income at a time when expenses are really racking up.
The combination of lost income and medical bills can make it difficult to manage everyday expenses. Because of this, Bello recommends buying at least enough coverage to help pay regular expenses like mortgage, food and clothing on top of medical expenses.
Preserving your standard of living
A critical illness can also have a lasting impact on your family’s standard of living and limit your capacity to save long term. And saving long-term is already challenging enough without having to deal with health issues.
Whether you want to save enough to send your kids to college, move to your dream house, or retire, Bello recommends you consider enough critical illness coverage to help you and your family stay on track to achieve your life goals.
And here’s a final tip: Bello says companies are designing critical illness products to protect a person through a life stage rather than a lifetime. If you’re worried about the cost of critical illness coverage, this could be a more affordable option. And this new product covers more conditions and has higher payouts. Cha-ching!