Does Critical Illness Insurance Cover Lung Cancer?

A critical illness insurance plan is a supplemental health insurance policy that pays you a fixed, lump sum if you are diagnosed with a severe illness. Critical illness plans cover a wide variety of diseases, including lung cancer. The lump-sum benefit payment can be used for what you need, whether that’s medical bills, groceries, childcare, or mortgage payments.

Many people assume their primary health insurance plan will be enough to cover medical bills as they arise. However, many people face tremendous financial burdens when paying their out-of-pocket medical and living expenses while undergoing treatment. Critical illness insurance can complement your medical coverage and help you pay what your primary plan doesn’t cover. 

The stipulations for critical illness plan coverage vary from plan to plan. Some plans will cover certain diseases or medical emergencies, while others will not. If you’re considering purchasing critical illness coverage, read on for more information to help you make your decision. 

Young couple with sick wife paying bills on laptop

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How Does Critical Illness Insurance Work?

Thanks to medical advancements, survival rates for many types of cancer have increased. This is great news, but the costs associated with treatment and missing work can be financially devastating. Around 60% of bankruptcies in the United States are caused by medical debt.

Your health insurance will cover many of your treatment costs related to lung cancer, but you may still have expenses you weren’t anticipating. Critical illness insurance—also known as critical care insurance—is designed to protect you and your family from financial hardship in the event of a serious diagnosis. It works by paying a predetermined lump-sum benefit following the diagnosis of a covered disease.

After getting a diagnosis of lung cancer, for example, you will submit a claim for benefits that will be paid directly to you to spend on what you need. The amount you receive can be used to cover healthcare or personal costs—it is up to you. This benefit can provide you with peace of mind so you can focus on what matters most: getting better.

There is a wide range of critical illness plans available, with lump-sum payments ranging from $5,000 up to $500,000. As with standard health insurance plans, you will pay a monthly premium. The amount you pay each month will depend on several factors, including your age, sex, health status, family medical history, and the amount and extent of coverage you are seeking. 

What Does Critical Illness Insurance Cover?

Critical illness insurance coverage varies from plan to plan. Each policy will include a list of covered conditions, so it’s important to read through the details of the plan(s) you are considering before purchasing. In order to collect your benefit, you must be diagnosed with one of the conditions outlined in the details of your policy. 

The most basic plans cover the most common severe illnesses, including cancer, heart attack, and stroke. More comprehensive critical illness insurance policies may also cover: 

Each policy is different, so make sure you're aware of what yours does and does not cover.

Who Is Eligible?

Eligibility for critical illness insurance benefits and amounts vary, based upon your individual circumstances and any exclusions and limitations from the insurance provider. Some policies require health screenings for risk-factor assessment before providing coverage. This may include a medical exam and answering questions related to your health and family history.

If you are using the same healthcare provider you have your primary health insurance policy with or are acquiring the plan through your employer, you may not need to undergo a medical exam or answer health questions.

Do I Qualify if I Already Have a Lung Cancer Diagnosis?

Those with an existing diagnosis are ineligible for purchasing a critical illness plan. 

Some critical illness plans do not cover preexisting conditions (e.g., asthma, diabetes). Other plans have a preexisting condition provision. Meaning, if a condition is treated prior to the critical illness coverage effective date, it is considered preexisting unless the individual has had the coverage for 12 consecutive months or more.

If you have already been diagnosed with lung cancer, you cannot take out a critical illness policy and get a payout. This is why it is best to have a policy in place before you receive a serious diagnosis. 

Do I Need Critical Illness Insurance?

It can be hard to predict if you need critical illness insurance. After all, none of us can see into the future. Some people may pay their premium for years without ever needing to file a claim and receive the benefit. Others may pay for a plan and end up needing it within a couple of years.

You may want to consider these factors when making your decision:

  • How comprehensive is your standard health insurance plan? 
  • What are your out-of-pocket costs for medical care? Consider your deductible, co-pays, and coinsurance. 
  • What is your risk for certain diseases in the next five to 10 years? 
  • Will you have enough money to maintain your standard of living if you can no longer work? 
  • Do you have a family history of diseases like cancer, heart attack, and/or stroke? 
  • Do you have enough savings to cover unexpected costs for health care? 

Summary 

When you have a serious diagnosis like lung cancer, medical bills and other expenses related to your cancer care can add up quickly. Even with a comprehensive health insurance plan, out-of-pocket costs can wreak havoc on your personal finances and mental well-being. 

A critical illness insurance plan will provide you with a lump-sum benefit payment if you are diagnosed with a covered condition. You can use these funds how you wish. For example, to help you pay your bills, make up for lost wages, and to maintain your standard of living. 

Different critical illness plans have different levels of benefits, and some have strict eligibility requirements. If you are eligible for a critical illness plan, you may want to consider it as an investment in your future. Having this plan can provide peace of mind so you can worry less about finances while you are treated for and recover from lung cancer. 

A Word From Verywell

Getting a lung cancer diagnosis can be an overwhelming experience. You may be facing treatments that take a toll on your physical and mental health. Worrying about finances on top of these challenges can be devastating. A critical illness insurance plan can provide you with peace of mind while you are going through treatment and recovering. 

Frequently Asked Questions

  • What is the difference between cancer insurance and critical illness insurance?

    The main difference between cancer insurance and critical illness insurance is that cancer insurance covers the costs associated with treating all types of cancer. Critical illness insurance is a lump-sum benefit paid out after a diagnosis of a variety of serious diseases.

    Critical illness benefits can be used for any expenses, and cancer insurance can only cover direct and indirect costs related to cancer care.

  • Who is eligible for critical illness insurance?

    Eligibility requirements for critical illness insurance vary, depending on the healthcare provider and the plan you are seeking. Your individual circumstances, such as your age, medical history, and family history) will be considered, and you may need to undergo a health screening to determine your eligibility.

    Individuals with preexisting conditions are not eligible for critical illness insurance. 

  • How much money does critical illness insurance offer for qualifying conditions?

    Critical illness insurance benefits range from $5,000 to $500,000, depending on the plan you have. You will pay a monthly premium for the policy and will receive the benefits if you are diagnosed with a qualifying condition. 

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