Top 8 critical illness insurance providers in the US

These insurers offer the best coverage, according to Verywell Health

Top 8 critical illness insurance providers in the US

Insurance News

By Mark Rosanes

Surviving a critical medical condition often comes with exorbitant hospital expenses that can leave many Americans in serious financial turmoil, several studies have shown.

2019 research published by the American Public Health Association found that medical bankruptcy remained a common issue in the country despite the implementation of the Affordable Care Act.

Prior to this, a survey conducted by the Kaiser Family Foundation and the New York Times revealed that more than a quarter, or 26%, of US adults struggled to pay medical bills, with about one million declaring bankruptcy every year due to insurmountable medical expenses.

One major contributing factor to the issue is the assumption most people have that a standard health insurance plan can provide full protection. In reality, however, the cost of treating life-threatening illnesses is often more than a traditional health plan can cover.

According to the Kaiser survey, unexpected refusal of an insurance provider to pay for a medical procedure is the most common cause of medical debt. This is where critical illness insurance comes into play. This supplementary insurance product pays for out-of-pocket medical expenses that traditional health insurance does not cover.

What does critical illness insurance cover?

Critical illness insurance, also called catastrophic illness insurance or specified disease insurance, provides coverage in an event a policyholder experiences a medical emergency due to a named illness. Some medical conditions and procedures that policies cover include:

  • Accidental brain damage
  • Amputation
  • Angioplasty
  • Arthritis
  • Cancer
  • Coma
  • Connective tissue disorders
  • Coronary bypass
  • Dementia
  • Heart attack
  • Kidney failure
  • Loss of vision or hearing
  • Multiple sclerosis
  • Organ transplants
  • Paralysis
  • Parkinson’s disease
  • Severe burns
  • Stroke

Most policies pay out a lump sum that the policyholder can use to replace lost wages or pay for treatment-related costs. The payout can also be used for specialty medications and non-medical expenses, including mortgages and groceries. Some insurance providers also give the insured the option to take monthly payouts that they can use while recovering.

How much does critical illness insurance cost?

There are several factors dictating the premium prices of critical illness coverage. These include a person’s age, gender, medical history, and overall health. The amount and extent of protection also impacts the cost of the policy. Insurance rates can likewise vary by state.

What are the typical exclusions?

Although exclusions vary from policy to policy, most do not cover chronic illnesses or those that were diagnosed within the past year. Some policies also do not provide coverage for non-invasive cancer. Insurance companies do not pay out benefits for injuries resulting from self-harm or sustained while engaged in an illegal activity. Some policies may also end coverage or charge higher premiums once the insured reaches a certain age.

Critical illness insurance typically has an effectivity date of 90 days after the policy’s purchase. Limits and exclusions often include a 12-month waiting period if the policyholder has a pre-existing condition at the time the insurance was bought.

Top critical insurance providers in the US

To find out which critical insurance providers in the US have the best offerings, health and wellness information website Verywell Health reviewed the policies of 20 companies, factoring in the extent of coverage, monthly rates, benefit period, how quickly the plan begins, payout terms, and financial stability. The site also considered nationwide availability and ease of application. These are the ones that came out on top. The list is arranged in alphabetical order with all figures correct as of November, 2021:

1. Aflac

  • Coverage options: $10,000 to $100,000
  • Policy type: Lump sum
  • Covered conditions: Coma, end-stage renal failure, heart attack, hemorrhagic and ischemic stroke, paralysis
  • Monthly premium: Quotes not available online

Aflac offers customizable coverage that gives customers the option to add several riders, including a lump-sum cancer rider and return of premium benefits rider that pays out the full amount paid for policies kept for at least 20 years as long as no claims are made. The insurer also offers a subsequent critical illness benefit that covers medical conditions detected 180 days after the first diagnosis. One of the main drawbacks, however, is the inaccessibility of the company’s policies in some states, including New York, New Jersey, Virginia, and Idaho.

2. AIG Direct

  • Coverage options: Up to $500,000 individual coverage
  • Policy type: Lump sum
  • Covered conditions: Coma, invasive cancer, stroke, heart attack, renal failure, severe burns, paralysis, vision loss, major organ transplant, loss of independent living
  • Monthly premium: Quotes not available online

AIG Direct offers one of the highest coverages among the companies reviewed by Verywell Health. For high coverage policies, however, the insurer requires customers to submit medical tests, including blood profile and urinalysis, something that is not necessary for policies of less than $100,000. Clients can also opt to add a benefits extension or accidental death and dismemberment rider, although these may limit the coverage to $150,000. A medical personnel HIV rider is available for medical professionals, covering accidental HIV infection resulting from their work. 

3. Breeze

  • Coverage options: $5,000 to $75,000
  • Policy type: Lump sum
  • Covered conditions: Heart attack, coronary artery bypass surgery, angioplasty, stroke, invasive and non-invasive cancer, kidney failure, major organ transplants, advanced Alzheimer’s disease, paralysis, coma
  • Monthly premium: $59.40 for $40,000 maximum benefit for a 45-year-old man, may vary by state

Breeze’s main advantage is the ease of its application process. Customers can apply for coverage online, which takes about five minutes. Clients can also make claims online. The company’s policies, however, do not extend to those above 60 years old.

4. Guardian Life

  • Coverage options: Up to $50,000
  • Policy type: Lump sum
  • Covered conditions: 30 major illnesses, including stroke, heart attack, Parkinson’s disease, cancer
  • Monthly premium: $44.46 for a $20,000 maximum benefit for a 45-year-old non-smoking man, may vary by state

Guardian Life offers a first occurrence and recurrence payout for individuals and businesses. The insurer’s critical illness insurance policies also do not have waiting periods. Claims are processed within seven days as long as the correct documents are provided.

5. Liberty Mutual

  • Coverage options: $10,000 to $50,000
  • Policy type: Lump sum
  • Covered conditions: Cancer, coronary artery bypass surgery, heart attack, organ transplant, stroke
  • Monthly premium: $33.10 for $40,000 maximum benefit for a 45-year-old man, may vary by state

Liberty Mutual offers customizable critical illness insurance policies at low premiums. Policyholders also have the option to add dependents, including spouse, partner, or child. One drawback, however, is the limited types of illness covered. The insurer will also not provide coverage for pre-existing conditions diagnosed within six months of purchasing the policy, which has a 30-day waiting period.

6. MetLife

  • Coverage options: $15,000 or $30,000
  • Policy type: Lump sum
  • Covered conditions: 22 major illnesses, including heart attack, stroke, kidney failure, Alzheimer’s disease, major organ transplant, certain cancer types
  • Monthly premium: Quotes not available online

MetLife’s critical illness policies are offered exclusively to employers. However, coverage is portable if the employee decides to leave. Policyholders also have the option to add dependents. MetLife provides guaranteed acceptance for active employees and does not implement waiting periods.

7. Mutual of Omaha

  • Coverage options: $10,000 to $100,000
  • Policy type: Lump sum
  • Covered conditions: Internal cancer, heart attack, stroke, Alzheimer’s disease, major organ transplant, blindness, paralysis, deafness, kidney failure, coronary artery bypass surgery, coronary angioplasty surgery
  • Monthly premium: Quotes not available online

Mutual of Omaha offers policies suited for individuals with high-deductible health insurance, often helping policyholders cover the amount, which comes in the $10,000 range. The insurer also offers separate policies for cancer, heart attack, and stroke, which are less expensive than its comprehensive critical illness policies. 

8. UnitedHealthcare

  • Coverage options: $10,000 to $50,000
  • Policy type: Lump sum
  • Covered conditions: 14 critical illness types, including heart attack, stroke, loss of hearing, major transplant, coma, kidney failure
  • Monthly premium: $66.66 for $40,000 maximum benefits for a 45-year-old man, may vary by state

UnitedHealthcare provides lifetime critical illness coverage, although the maximum benefit drops by 50% after the policyholder reaches 65 years old. Policies are also renewable until the insured turns 70, after which the insurer may opt to continue or terminate the coverage. UnitedHealthcare’s policies are not available in Georgia, New Jersey, Virginia, or the District of Columbia.

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