Physically Ill: Insurance Options

There are a variety of insurance options available for physically ill people, depending on their specific needs and circumstances. Here are some of the most common types of insurance for individuals with physical illnesses:

- Critical Illness Insurance : This type of insurance provides additional coverage for medical emergencies such as heart attacks, strokes, or cancer. It helps cover the high costs associated with treating these life-threatening illnesses, which may exceed the limits of standard health insurance plans.

- Health Insurance : Individuals with physical illnesses can enrol in health insurance plans that cover essential health benefits, including management for chronic conditions like asthma or diabetes. These plans can help pay for doctor visits, prescription medications, behavioural health services, and rehabilitation.

- Disability Insurance : This type of insurance provides income protection if an individual is unable to work due to a physical illness or disability. It offers financial protection not limited to a specific set of illnesses.

- Travel Insurance : For individuals with physical illnesses or disabilities, finding travel insurance can be challenging. However, specialised providers offer policies that cover pre-existing conditions and any necessary equipment while travelling.

- Life Insurance : While a physical illness may impact the cost and availability of life insurance, it is still possible to obtain coverage. It is important to be honest about your health condition and not cancel any existing policies.

Critical illness insurance

The money from a critical illness insurance policy can be used for non-medical costs related to the illness, including transportation, childcare, and so on. Typically, the insured will receive a lump sum to cover those costs. Coverage limits vary—you could be eligible for a few thousand dollars or up to $100,000, depending on your policy. Policy pricing is impacted by several factors, including the amount and extent of coverage, the sex, age, and health of the insured, and family medical history.

There are exceptions to critical illness insurance coverage. Some types of cancer may not be covered, while chronic illnesses are also frequently exempted. Recurrences of a critical illness, such as a second stroke or heart attack, may not receive a payout. Coverage might end or be reduced when the insured reaches a certain age. It is important to note that critical illness policies are subject to a host of stipulations and only cover the conditions listed in the policy under specific circumstances.

Seniors should be cautious about these policies as there may be limits for payout on some policies, with persons over a certain age (such as 75) ineligible for payment. Some policies may also include "age reduction schedules," which means the potential insurance payout shrinks as the policyholder gets older.

Some of the pros of critical illness insurance are that it provides a lump sum of money when a policyholder is diagnosed with a covered illness, and this payout can be spent on any needs, including non-medical expenses such as transportation or equipment. The premiums are also low and affordable compared to a typical health insurance policy.

However, there are some cons to critical illness insurance. In addition to the exceptions mentioned above, some types of cancer may not be covered, and the policy may not cover recurrences of a critical illness. It is important to carefully read the policy, as with any form of insurance.

Travel insurance

• Trip cancellation insurance: This covers your financial investment in your trip, such as flights, cruises, or train tickets. It is important to check that the policy includes cancellation due to illness of the traveller or a close family member.
• Travel health insurance: This covers medical costs incurred while abroad. It is important to note that this may not cover pre-existing conditions, so separate travel health insurance is often needed. Travel health insurance is especially important if engaging in adventure activities or travelling for extended periods.
• Medical evacuation insurance: This covers emergency transportation from a remote area to a high-quality hospital. This can be crucial for travellers with pre-existing conditions and may cost over $100,000 without insurance.

How to choose travel insurance:

When choosing travel insurance, there are several factors to consider:

• Timing: It is recommended to purchase travel insurance as soon as you book your trip. This ensures coverage for any issues that may arise before the trip, such as illness or injury.
• Declaration of medical conditions: It is crucial to disclose any pre-existing medical conditions to the insurer. Failure to do so may result in a rejected claim.
• Destination coverage: Ensure that the policy covers the countries you are travelling to. Also, check for any Foreign Office warnings against travel to your destination, as this may affect your coverage.
• Single-trip vs multi-trip policies: If you have pre-existing conditions, consider the frequency of your travel. Single-trip policies cover one trip, while multi-trip policies cover multiple trips within a specified period.
• Cost: The cost of travel insurance varies depending on factors such as the traveller's age, the trip cost, and the level of coverage. It typically ranges from 4% to 10% of the trip cost.
• Credit card coverage: Some premium travel credit cards offer limited travel medical insurance. It is important to review these benefits to determine if additional travel insurance is needed.

Using your travel insurance:

In the event of a medical emergency while travelling, contact your travel insurance provider for guidance. You may need to pay for expenses upfront and then file a claim for reimbursement. Keep all receipts and relevant documentation to support your claim.

Exclusions and limitations:

It is important to understand the exclusions and limitations of your travel insurance policy. Exclusions are specific events that are not covered, such as risky activities. Limitations refer to monetary caps on coverage for certain expenses. Additionally, policies may have deductibles, which are amounts you must pay before the policy reimburses you.

Final thoughts:

Life insurance

Pre-existing Conditions:

A pre-existing condition is a medical issue diagnosed or treated before applying for life insurance. Insurers generally view pre-existing conditions as potential risks that may increase the likelihood of early or unexpected death. This results in higher costs or even denial of coverage. Common pre-existing conditions that may impact life insurance include high blood pressure, cancer, diabetes, and heart disease.

Cost of Life Insurance with Pre-existing Conditions:

Insurers group applicants into rate classes based on their health, such as standard, preferred, or super preferred. Those with serious health conditions may only qualify for substandard rates, resulting in higher premiums. The cost varies depending on the specific condition and the insurer's assessment of the associated risks.

Options for Life Insurance with Pre-existing Conditions:

Even with a pre-existing condition, there are options available for life insurance:

• Guaranteed issue life insurance: This type of insurance guarantees acceptance within a certain age range, without the need for a medical exam or health-related questions. However, the coverage is limited, and the costs are typically much higher for the amount of coverage provided.
• Group life insurance through work: Many employers offer basic group life insurance, which is usually limited to a multiple of the employee's annual salary. This option does not require a health exam, but the coverage may be lost if the job is left.
• Accidental death and dismemberment insurance: This type of insurance provides a death benefit only in the event of an accidental death, regardless of medical history. However, the cause of death must be a covered accident for the beneficiaries to receive the payout.
• Existing policy expansion: If you already have a whole life policy or a term policy with a conversion feature, you may be able to expand your coverage without further underwriting.
• Shopping around: Different insurance companies assess health risks differently. It's worth exploring various insurers and speaking with underwriters before submitting applications to increase your chances of finding coverage.

Tips for Buying Life Insurance with a Pre-existing Condition:

• Be mindful of the timing of your application. Applying too soon after a major health event, such as a cancer diagnosis or heart attack, may result in rejection. Consider reapplying after successful treatment or following a specific timeline provided by the insurer.
• Take advantage of improvements in your health. If you are accepted but charged a high rate, you can request a re-rating and a lower premium once your condition is under control and your prognosis is positive.
• Find the right agent. Work with an independent agent who has experience with impaired risk cases and knows which insurers are more favourable for your particular condition.
• Be honest about your condition. Do not conceal your illness, as life insurance companies have methods to identify fraud. Misrepresentation on your application may result in a rejected claim and could hurt your chances with other insurers.

In summary, while life insurance options for the physically ill are more limited and expensive, they do exist. It's important to explore various insurers, understand the impact of your specific condition, and be mindful of the timing and approach when applying for coverage.

Health insurance

There are other options available too, like short-term health insurance plans and medical indemnity plans. Short-term plans are available year-round and can help offset costs if one has a medical emergency unrelated to a pre-existing condition. Medical indemnity plans, also known as fee-for-service plans, pay a fixed amount for services, e.g., $50 for a doctor visit. They can help cover out-of-pocket medical expenses but do not meet ACA requirements and will not help one avoid state tax penalties.

In India, the government has introduced steps to ensure that differently-abled people can avail health insurance. The two main schemes offered are the Niramaya Health Insurance Scheme and the Swavalamban Health Insurance Scheme. The Niramaya scheme offers coverage for cerebral palsy, autism, multiple disabilities, and mental retardation, with benefits like a high insured sum of Rs. 1 lakh and a low processing fee of Rs. 250 for people in the BPL category. The Swavalamban scheme provides coverage for locomotor disability, blindness, low vision, and hearing impairment, among others, with benefits like a high insured sum of Rs. 2 lakh if the family income is below Rs. 3 lakhs per annum.

Accident insurance

• Hospital emergency room care
• Urgent care centre services
• Ambulance expenses
• Hospitalisation cover
• Medical expenses

In the case of accidental death, the policyholder's nominee usually receives 100% compensation from the insurer. Accident insurance can also provide benefits for permanent or temporary disabilities resulting from an accident, such as loss of limbs or sight. This can include a specified sum insured amount or a percentage of the benefit paid to the insured.

Frequently asked questions