Workplace Benefits
How Critical Illness Insurance Can Support Financial Planning
While medical insurance is something you know you need, you may not realize there’s another type of insurance that can provide additional financial coverage if you get sick. It's called critical illness insurance. This voluntary benefit pays you a lump sum that you can use to help cover bills related to the care and treatment of a covered illness. You can also use it to pay for additional daily expenses—like rent or mortgage, groceries, and childcare—that can pile up as you recover.
Having this supplemental coverage can be helpful, considering the financial hardship associated with medical debt. Research shows that 32 percent of working Americans have outstanding medical debt, and 54 percent of them have defaulted on it, according to a report by Salary Finance.
Read on to find out more about how critical illness insurance can help protect your finances.
What is critical illness insurance?
Critical illness insurance is a voluntary, employer-sponsored benefit that can help pay for unexpected expenses, if you're diagnosed with a serious illness. There are more than 20 covered illnesses on MetLife’s plan, including, heart attack, stroke, kidney failure, Alzheimer’s disease, and (in some cases) COVID-19.
In addition, because critical illness insurance is paid in a lump sum directly to the certificate holder, you can use the funds however you see fit, such as paying off credit card debt and household bills to name a few.
MetLife’s plan guarantees coverage for you and eligible family members. You don’t even need to undergo a medical exam, and coverage starts immediately, as long as you are actively working.1
How can critical illness insurance help with my financial planning?
Even if you have medical insurance, a critical illness can leave you with unexpected and uncovered costs, such as deductibles, copays, and bills for out-of-network care, as well as non-medical costs like food and childcare. The financial toll can be difficult.
A Kaiser Family Foundation study reports a wide range of sacrifices that people made to pay their medical bills: 70 percent cut back on basic household expenses, like food and clothing, and nearly 60 percent said they used up all their savings.
Critical illness insurance could offer financial protection at a cost that may be more affordable than you think. Plan premiums vary depending on your employer's demographics, as well as your own, such as age, smoking status, and whether it's a single or family plan. To give you an idea of how cost-effective this benefit can be, a 40-year-old female nurse could pay between $25-$30 per month for a single plan benefit of $30,000.
That benefit is paid to you in a lump sum that you can use however you wish, and premiums are deducted from your paycheck. That's an added convenience.
Interested in learning more about critical illness insurance? Ask your employer about the details of your plan. And take our quiz to see if this product—and other benefits—could help you save money in the long run.