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The Best Critical Illness Insurance [Top 10 Companies and Policies]

critical illness insurance

What is Critical Illness Insurance?

Critical illness insurance definition: a type of health insurance policy that pays out a lump sum cash benefit payment for a qualifying condition, such as cancer, paralysis, heart disease and stroke.

Therefore, when we refer to the term ‘critical illness insurance’, it’s going to describe the basic notion of paying into an insurance policy so money can be received if you were to suffer from a qualifying illness or injury listed in the policy itself.

Below, we’re going to discuss the different types, how critical illness insurance costs, the providers offering this product, and what you need to consider when choosing the policy. Our goal is to help you consider the pros and cons of private individual critical illness insurance to supplement your health care needs.

Types of Critical Illness Insurance

Now we know the basics, it seems sensible to start with the different types of critical illness insurance available. For the most part, there are three different policies;

Simplified Issue Critical Issue Insurance

Typically available in smaller amounts, most will push as far as $50,000, a simplified issue insurance critical illness insurance policy means that the underwriting requirements are less stringent as they would be on a fully underwritten policy.

For example, you won’t be subjected to a medical examination and this is the main reason why people may choose this option.

Instead of requiring a medical exam, the insurance company will ask a few health questions to determine your risk level. Generally, the policy offers non-tobacco and tobacco rates classes.

Although less common, you may also come across association or group plans that offer  guaranteed issue critical illness insurance.  With a GI policy, the insurance company doesn’t ask medical questions. Guaranteed issue policies often come with a graded benefits which provide that you don’t receive the full benefit amount until a certain period of time has passed, typically one to three years.

Fully Underwritten Critical Illness Insurance

A fully underwritten critical illness insurance policy will have complete underwriting requiring a medical examination and health questions. The benefit of a fully underwritten policy is the critical illness insurance provider is willing to offer more coverage, and typically at lower premiums.

If you have a pre-existing condition, it might actually be beneficial to go the fully underwritten route when applying for a critical illness policy. When you take a life insurance medical exam you give the insurance company more information. And with more information you may have a better chance of being approved, rather than the simplified issue route where all the company has to go off of is your answers to questions and a background check of the MIB.

Critical Illness Rider

Finally, if you’ve spent any time researching life insurance policies, you’ll know there are opportunities to add life insurance riders. Essentially, these are additions that are paid for on top of regular life insurance premiums.

The Critical Illness insurance rider is popular and it serves as additional protection in addition to the life insurance death benefit. Rather than having two separate policies with different insurance companies, you are able to get the rider and enjoy life insurance with living benefits.

Top 10 Best Critical Illness Insurance Companies

There are numerous companies offering critical illness insurance, both individual and group. The following list of critical illness insurance companies provide our current favorites. While many companies provide it as an option, we want to focus on the providers we believe currently offer the best critical illness insurance for individuals.

Our Top 10 Critical Illness Insurance Companies

Critical Illness Insurance Cost

Below are some sample critical illness insurance rates. However, these are in no way indicative of what you will pay. There are many factors that go into your premium rate, including your age, gender, tobacco use, health issues and policy benefit amount.

The following simplified issue critical illness insurance quotes are from A- rated carriers and better. Rates are based on a male with a non-tobacco health rate class. Rates are for informational purposes only and must be qualified for. 

Age$25,000$50,000
30$19$35
35$25$46
40$34$65
45$44$84
50$55$107
55$68$132
60$83$161

Please note: The above sample critical illness insurance quotes are based on a simplified issue policy. Rates for the fully underwritten policy will be considerably lower. Please give us a call to get accurate critical illness quotes based on your age, gender and health rate class.

As with all insurance, the amount you pay will be entirely dependent on the coverage you require. If you need $300,000 worth of coverage, you’re going to pay significantly more than someone who wants $40,000 of coverage (assuming they’re the same policy and provider). Therefore, this is the first consideration you need to make.

After this, there are several other factors providers consider when calculating premiums including your health, the type of policy you’ve chosen, whether or not you have a medical examination, your smoking status, and more.

In case you were unaware, the main role of the provider is to calculate your risk of experiencing one of their insured illnesses. If you want $50,000 of coverage on a simplified insurance plan as a heavy smoker who has a history of heart issues in the family, you provide a larger risk to somebody who wants $50,000 of coverage on a fully underwritten policy and with perfect health.

Which Illnesses are Covered?

When you research the market for different critical illness policies, you’ll quickly notice the difference in covered illnesses. As we mentioned at the very beginning, there isn’t a list of illnesses that each company follows; they provide their own coverage depending on the risk they’re willing to take based on the commonality of such health issues.

Ever since the first policy was introduced many years ago, however, there have been some conditions that appear in the majority of policies. For example, this applies to a heart attack, stroke, major organ transplant, kidney failure, cancer, paralysis, and coronary artery disease. Nowadays, these are the types of critical illnesses people worry about and so the insurance providers generally include these within their offerings.

After this, there are a plethora of other medical concerns they could include and these are more likely to be scattered around the market and between policies. In addition to multiple sclerosis and motor neuron disease, this could include severe burns, Parkinson’s disease, deafness, coma, aplastic anemia, aortic surgery, blindness, Alzheimer’s disease, bacterial meningitis, loss of limbs, loss of speech, HIV infection (occupational), and heart valve replacement.

If you’re looking for something that isn’t considered within the main bulk of illnesses, perhaps your family has a history of a certain condition, you might need to scan the market a little harder than if you were just looking for basic coverage of the most common illnesses.

What Features Should You Consider?

So, you’ve decided to invest in a critical illness insurance policy/rider…what now? If you take anything from today, aside from the value of this policy, you should know that each company adds their own nuances to make the policy their own. With this in mind, we’re going to provide you with some considerations you need to make when choosing an insurer and policy.

Included Illnesses

First, not every company offers protection against the same illnesses so you need to choose a policy that covers those you’re looking for. If there aren’t any particular illnesses you want to protect against, we recommend going for a company that covers the common illnesses, as well as a handful of others.

While researching, think about your own family’s medical history, such as mom and dad and your siblings. Is there a common illness that has run through the family tree in recent years? For example, if both your parents and a grandparent sadly passed away with cancer, it might be wise to choose a policy with cancer protection as a precaution. Furthermore, think about your own health too because this could play a role.

Policy Type

Do you already have a life insurance policy in place? Does your provider offer an opportunity to add a critical illness rider? Are you currently looking for a life insurance policy? Whether you have one or are currently looking to open a life insurance policy, many find value in pairing them together with the same provider. Not only will you have all the coverage you need, it’s all in one place and you might even save yourself some money. Often, the logistics of this make it worthwhile alone (i.e. only one medical examination).

Medical Examination

As we saw when looking through the list of companies offering critical illness insurance, some require a medical examination and some don’t.. Do you have a preference? If you’re young and healthy, the medical examination will allow you to obtain more affordable rates. Otherwise, the simplified and guaranteed issue policies might come in handy.

Financial Position

As we know with all medical and life insurance policies, the coverage we need depends on our financial position. If you’ve got a healthy amount of money saved, you might not need as much coverage and you are simply looking for a buffer. Then again, you may consider the leverage you get with the critical illness insurance to be worth the premium you pay in order to avoid touching your own money.

Family Needs

If you’re young and single, your coverage needs are going to be fairly straightforward. As you get older, marry, and have children, your needs change dramatically. Suddenly, there’s more on the line if you were to become ill. Therefore, talk with potential providers and discuss your options to expand/adjust coverage as your needs change. If you cover your needs thinking solely about where you are today you might miss out on locking into lower premiums now, rather than down the road when you are older and the policy costs more.

Critical Illness Insurance Exclusions

It is important to know what the critical illness policy lists as exclusions and pre-existing condition limitations. There are common exclusions, such as

  • your participating or attempting to participate in an illegal activity;
  • your committing or attempting to commit suicide or intentional self-inflicted injury, while sane or insane;
  • your being under the influence of narcotics or any other controlled chemical substance unless administered upon the advice of a physician;
  • your practicing for or participating in any semi-professional or professional competitive athletic contest which you are paid for; or
  • your participation in any act of war, whether or not declared, participation in a riot, insurrection or rebellion.

But there may be other exclusions or limitations in your CI insurance policy, including pre-existing condition limitations for specific periods of time, such as 90 days. So, don’t forget to check the pre-existing condition exclusions before the end of your 30 day free look period to make sure your CI policy coverage extends to every condition you think it does to make sure you will be eligible for your critical illness benefit.

Critical Illness vs Disability Insurance

Critical illness insurance pays a lump sum benefit payment if you are diagnosed with a qualifying critical illness. Some policies allow you to file a claim more than once. The main distinction between critical illness insurance and disability insurance is CI insurance give you a lump-sum payment for a critical illness, not necessarily for disability, although the critical illness may lead to disability.

Disability income insurance pays a monthly income benefit if you are disabled due to a sickness or injury. Disability insurance is primarily concerned with income replacement. You can buy both short-term disability insurance and long-term disability insurance. If you are totally or partially disabled as defined in the policy, the insurer will pay you a monthly income benefit for the duration of the benefit period, after the elimination period has ended.

Critical Illness vs Long-Term Care Insurance

The main difference between critical illness insurance and long-term care insurance is that with CI insurance, you have to have a qualifying critical illness. With LTC insurance, you have to be diagnosed with a chronic illness, defined by being unable to do 2 of 6 activities of daily living or having a severe cognitive impairment.

Next Steps

Do you have a critical illness plan? If you are interested in critical illness insurance quotes, our agents are standing by ready to provide you with customized quotes based on your specific need, health and lifestyle. We are not bound to any specific company and can shop from the different carriers we represent to find you the best policy based on your specific criteria.

So what are you waiting for? Give us a call today to see what we can do for you!

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