How does critical illness pay out?

Many people purchase critical illness insurance to protect their finances in case they’re diagnosed with a serious illness like cancer, heart attack or stroke.

When you purchase a critical illness insurance policy, you’ll select a benefit amount, or the amount of coverage you have. For Assurity’s Critical Illness Insurance, you can choose a benefit amount between $5,000 and $50,000 of coverage. Assuming you kept up with your premiums, that’s the amount you’ll receive if you’re diagnosed with a covered critical illness. Assurity’s Critical Illness Insurance covers four of the most common serious conditions: Heart attack¹, cancer, stroke and Advanced Alzheimer’s Disease. Note that if you’re diagnosed with noninvasive cancer, or cancer that only stays in one part of the body, you’ll only receive 25% of your benefit amount. 

Once you receive a diagnosis, you’ll need to follow a few simple steps to receive your benefit payment. First, you’ll need to file a claim. The easiest way to do this is online, via the MyAssurity customer portal – you can set up your login information there once you’ve purchased a policy. To complete the claim process, you’ll need to provide a few pieces of important information, including verification of your diagnosis and a statement from your physician. You’ll be able to find all the forms and information you need on MyAssurity when it’s time to file a claim.

After that, it’s easy – if everything on your claim was in order, we’ll send you your payment as a check. You can deposit it immediately and use the money for whatever you need. Use the cash for medical expenses or treatments, costs for travel or lodging, monthly bills, or whatever else you need to focus on your recovery.

Nope! You don’t have to pay taxes on your critical illness insurance benefit. Because the benefit isn’t considered income, it isn’t taxable. You’ll get the money as a tax-free lump sum, and you’ll be free to use the full amount however you choose. Having the freedom to pay necessary expenses without worrying about taxes down the line can be a huge relief when facing a serious illness. 

In most cases, Assurity’s Critical Illness Insurance pays within ten days of a claim. We recommend that you file your claim as soon as possible following a diagnosis to make the process as quick as possible. In a few rare cases, we may require additional information from you or your physician – in these cases, payment may take a few extra days. Once you receive your check, you can deposit it immediately.

If you think that you could comfortably pay for a serious illness out of pocket or aren’t concerned about your risk of developing a serious condition, critical illness insurance may not be worth it. But for almost everyone else, it’s an effective and affordable way to help safeguard against the costs of serious diseases. Keep in mind that the out-of-pocket maximum for a high deductible health plan in 2022 is $7,050 for an individual and $14,000 for a family² – an amount that many Americans would be unable to cover all at once.

To learn about whether critical illness insurance is worth it for you, you can read our article: Is Critical Illness Insurance Worth It?
If you’re ready to learn more and get your personalized price for critical illness insurance, you can get a custom quote online in minutes to see how affordable it would be for you. You can also learn more about Assurity’s Critical Illness Insurance and find more articles, resources and tools. 

¹ Heart attack does not include established (old) myocardial infarction occurring prior to the issue date, sudden cardiac arrest, cardiac arrest or cardiopulmonary arrest.
² Healthcare.gov, High Deductible Health Plan (HDHP), 2022

Additional disclosure information 

LIMITATIONS AND EXCLUSIONS (may vary by state) 

Pre-existing Condition. Pre-existing condition means a sickness or physical condition for which, during the 12 months before the issue date or last reinstatement date, the insured person received medical consultation, diagnosis, advice or treatment from a physician or had taken prescribed medication. No benefits will be paid for a critical illness that is caused by a pre-existing condition unless the date of diagnosis is after the policy has been in force for 12 months from the issue date or last reinstatement date. 

Waiting Period. Waiting period means the 30 days following the issue date or ten days following the last policy reinstatement date. The date of diagnosis of a covered critical illness must be made while the coverage is in force and after any waiting period. No benefits will be paid if a diagnosis or a medical consultation that leads to diagnosis of invasive cancer or non-invasive cancer occurs during the waiting period. If cancer is diagnosed during the waiting period, benefits will be paid for a subsequent diagnosis of cancer if the insured person is symptom- and treatment-free for at least 12 consecutive months and in complete remission prior to subsequent diagnosis. 

Misstatement of Age and/or Gender. If the insured person’s age and/or gender has been misstated, an adjustment in premiums, coverage or both will be made based on the correct age and/or gender. If, according to the correct age, the coverage provided by the policy would not have become effective or would have ceased, Assurity’s only liability during the period in which the insured person was not eligible for coverage shall be limited to a refund of premiums. 

Misstatement of Tobacco Use. If, during the first two years of the policy, the tobacco status of the insured person has been misstated, Assurity will revise the policy’s benefit amount to the amount the premium paid would have purchased using the correct tobacco status on the issue date. 

The policy will not pay benefits for losses that are caused by or are the result of an insured person: 

• being exposed to war or any act of war, declared or undeclared;
• actively serving in any of the armed forces or units auxiliary thereto, including the National Guard or Army Reserve, except during active duty training of less than 60 days;
• engaging in hang-gliding, hot air ballooning, bungee jumping, parachuting, scuba diving, sail gliding, motor vehicle racing, parasailing, parakiting, mountain or rock climbing, B.A.S.E. jumping, sky diving or cave diving; 
• being addicted to drugs or suffering from alcoholism;
• being intoxicated (as determined by the laws governing the operation of motor vehicles in the jurisdiction where loss occurs) or under the influence of an illegal substance or a narcotic (except for narcotics used as prescribed to the insured person by a physician);
• committing or attempting to commit a felony;
• being incarcerated in a penal institution or government detention facility;
• engaging in an illegal occupation;
• intentionally self-inflicting an injury; or
• committing or attempting to commit suicide, while sane or insane. 

Assurity and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Policy Form No. I H1820 underwritten by Assurity Life Insurance Company, Lincoln, NE. 

Policy Form No. I H1820 DTC (NY) (Specified Disease) underwritten by Assurity Life Insurance Company of New York, Albany, NY.

IMPORTANT NOTICE— CRITICAL ILLNESS INSURANCE PROVIDES LIMITED BENEFIT COVERAGE. It is not a comprehensive major medical plan or Medicare supplement policy and does not satisfy the requirement for minimum essential coverage under the Affordable Care Act (ACA). It is not a substitute for major medical insurance and may not be appropriate for Medicaid recipients.  

This policy may contain reductions of benefits, limitations and exclusions. Click here for standard Limitations and Exclusions. Product availability, features, rates, limitations and exclusions may vary by state. The state specific policy form is the ultimate authority for any questions about this product. 

*In some states, diagnosis of cancer during the first 30 days following the policy’s issue date results in a significant benefit reduction or policy cancellation. The percentage benefit amount payable for invasive and non-invasive cancer combined cannot exceed 100%. 

**Heart attack does not include established (old) myocardial infarction occurring prior to the issue date, sudden cardiac arrest, cardiac arrest or cardiopulmonary arrest.

Assurity reserves the right to order, at the company’s expense, evidence of insurability which the company feels is necessary for the prudent evaluation of the risk.

Assurity is a marketing name for the mutual holding company Assurity Group, Inc. and its subsidiaries. Those subsidiaries include but are not limited to: Assurity Life Insurance Company and Assurity Life Insurance Company of New York. Insurance products and services are offered by Assurity Life Insurance Company in all states except New York. In New York, insurance products and services are offered by Assurity Life Insurance Company of New York, Albany, NY. Product availability, features and rates may vary by state.