Bridging The Gap With Critical Illness Supplemental Insurance

Bridging The Gap With Critical Illness Supplemental Insurance

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Critical illness insurance provides a lump-sum payment for the occurrence of one or more covered medical conditions, subject to policy terms and specifications, including limitations and exclusions. The contracts differ from carrier to carrier, but this solution generally is designed to empower policy holders to choose the care and treatment they prefer if they undergo a major organ transplant or are diagnosed with another qualifying event such as a heart attack, invasive cancer, stroke, kidney failure, coma, paralysis, severe burn, and/or the loss of sight, speech or hearing. The stats related to these conditions are compelling.

In fact, as the American Heart Association and the American Stroke Association have shared, about 85.6 million Americans are living with some form of cardiovascular disease or the after-effects of stroke. Furthermore, although boomers and seniors are most prone to strokes, research published recently by the two nonprofit organizations shows that the risk to younger generations has increased dramatically. Compared with the 1995-1999 period, stroke rates in 2010-2014 for the studied population rose 147 percent in people ages 35-39 and doubled in people ages 40-44.

Additionally, a recent update from the National Cancer Institute shared that the number of people in America living beyond a cancer diagnosis is expected to rise to nearly 19 million by 2024.

Many of these survivors’ conditions may constitute critical illness as spelled out in a critical illness insurance policy and the afflicted people may need help paying for the costs of care.

But even having Medicare, with a Medicare gap plan, does not necessarily equate to affordable cancer care, as a Medscape article shared recently: “New findings show that depending on the type of supplemental Medicare coverage, cancer patients may find themselves with significant out-of-pocket (OOP) expenses. For beneficiaries insured by traditional fee-for-service Medicare but without supplemental insurance, mean annual OOP expenses were $8,115.”

This benefit may help with direct costs, such as deductibles, co-pays and out-of-network medical expenses, to bridge the gap between what the client’s health insurance plan will pay and actual expenses incurred for the best specialists, physicians and hospitals, and experimental drugs or therapies. 

However, clients have the freedom to use the policy payout as needed. Therefore, it also can help replace lost income, cover transportation and lodging for non-local health treatment or even provide for everyday living expenses, such as a mortgage, bills and debts.

SMALL BUSINESS USE

Think about how critical illness insurance has the potential to bridge the gap in many business succession plans. As background, a small business usually is the owner’s largest retirement asset and business succession plans typically are designed to protect the value of this asset from the catastrophic impacts of an untimely death of the owner.

However, a 40-year-old male is over five times more likely (and a 40-year-old female is over four times more likely) to suffer a critical illness than an untimely death prior to age 65. A 50-year-old male is more than eight times more likely (and a 50-year-old female is more than six times more likely) to become critically ill than die before age 65. Yet, succession plans typically do not address critical illness.

LOOKING AT THE BOTTOM LINE

The addition of some simple language to business succession plans, in sync with the purchase of critical illness protection, therefore may help address crucial challenges for clients and their families. Financial professionals who help small business clients leverage critical illness insurance have the opportunity to build stronger relationships with them and, when appropriate, to offer competitive funding options for the clients who implement the buy-sell changes.

Source and Full Article: http://www.thinkadvisor.com/2017/03/28/bridge-the-gap-with-critical-illness-insurance?t=life-insurance