Critical Illness & the Benchmark definition Challenge
By now most people have heard of “Critical Illness Insurance” an insurance benefit that protects the individual while they are still alive. This type of insurance plan pays a lump sum benefit tax-free in the event that you survive one of the covered illnesses or conditions (most plans have 20 plus covered conditions) by thirty days, in most cases.
The more serious conditions are Heart Attack, Stroke, Cancer (life threatening) Coronary bypass surgery, Kidney failure, Multiple Sclerosis and a number of other conditions.
However, the real dilemma is whether you will actually get paid should you suffer from one of the twenty plus covered conditions while your policy is in force.
Would you believe that depending on where you are when you have a heart attack, for instance, would determine when and if you get paid.?
The new standardized benchmark definitions that many of the Insurance Companies are adopting may prevent some heart attack victims with a critical illness plan from getting paid.
Let me explain why: Most Insurance Companies are adopting the definition of heart attack that uses a test called “Biochemical Markers” which, along with other factors, determine that a heart attack did happen. Some hospitals, however, use a test involving “elevations in cardiac enzymes” to determine that a heart attack did occur.
Those Insurance Companies that do not recognize the test showing “Elevation of Cardiac Enzymes” will not honour the claim, when, in fact the individual did have a heart attack.
So imagine you are in a large city near a hospital with a Cardiac Unit and their test includes “Biochemical Markers” along with the rest of the information that would indicate you had a heart attack, if you survived the required thirty days your claim would be paid.
Now let’s say you are in a small town hospital where the test used was for “Elevation of Cardiac Enzymes” and you did indeed have a heart attack, in this case your claim may be denied because your Insurance Company states only “Biochemical Markers” testing will be acceptable. Best-case scenario, you go to court and win the right to be paid, after a lengthy and costly court battle.
We recommend, therefore, that you deal with an insurance company that honors both tests.
Now let me share more discouraging information. There are many other covered conditions that have been and will be modified by the new Standard Benchmark changes that will definitely make it more difficult to resolve a claim for a condition that the average person would think is covered and yet does not qualify.
The attached table will show a number of covered conditions and how the new Benchmark definitions apply.
If you have questions about an existing critical illness policy you own or one that you are considering, please contact our office (866-341-3220) and request a comparison of definitions of covered conditions.
The price difference between the worst and the best plans in most cases is less than 15% and as an associate of mine has said in the past, ” There are two things you don’t compromise on, the quality of your parachute and the definitions in your Critical Illness Plan”. Consider a plan that is legally and medically sound; thereby reducing the chance for a dispute at claim time.
Fore-warned is fore-armed