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Critical illness insurance: a financial safeguard against serious illness

It can be challenging to understand all the benefits available in the workplace. And if you’re not an expert at group supplemental health insurance benefits, including accident, critical illness and hospital indemnity, you’re not alone. This article, which is the second in a three-part series, will focus on critical illness insurance and provide helpful insights.

Group critical illness insurance helps employees prepare financially for an unexpected medical event by providing a lump-sum payment if a covered illness occurs. The funds can be used to help pay expenditures such as deductibles, out-of-pocket medical costs or everyday living expenses. And the benefit payout is not dependent on income or participation in other employer insurance offerings. Critical illness premiums are typically paid by employees and elected annually during the open enrollment period.

Typical “core” conditions covered include heart attack, stroke, cancer and organ failure. Benefits are provided in various percentages depending on the plan design selected. Employers can also elect to offer more coverages for employees to choose from at an additional cost. Examples of additional coverages include metastatic cancer, Type 2 diabetes, infertility, and health and wellness checks with multiple screening coverages, to name just a few.

Critical illness insurance can make a difference

Now that we’ve covered the details, it’s time to appreciate the value of critical illness insurance in real-life situations.

The preponderance of claims for critical illness insurance come from a few diagnoses — heart attack, stroke and cancer. And few things are as gut-wrenchingly distressing as a cancer diagnosis or as challenging to discuss as colon cancer. But it is the third or fourth most prevalent cancer in the US — depending upon your source. While March is Colon Cancer Awareness Month, colon cancer does not get the public focus that some other cancers or diseases receive — but that doesn’t mean its impact on individuals and families should be diminished.

Further, much like some other underrepresented diagnoses, colon cancer is overrepresented within some populations. While it strikes people of all ages, with 44 percent of diagnoses and 32 percent of deaths for those under age 65,1 there has been a decrease in diagnosis except for younger populations. According to the American Cancer Society — the number of people under 55 diagnosed has almost doubled.2 The American Cancer Society also reports that African Americans are 40 percent more likely to be diagnosed with colorectal cancer and 20 percent more likely to die from it than most other groups.3

Some of this increase in diagnosis may be attributable to earlier screenings — but research suggests there may be other factors at play related to a variety of socioeconomic attributes.

Considerations for a benefit portfolio

Understanding how colon cancer and other serious diseases impact employees, spouses and dependent parents during both working years and into retirement is an important reason to consider adding critical illness or hospital indemnity insurance to benefits portfolios. 

When contemplating the addition of critical illness insurance, it’s essential to think about the conditions covered, the definitions supporting those conditions when selecting a carrier, and how those covered conditions can support an organization’s diversity, equity and inclusion (DE&I) goals. For example, having a robust cancer definition, one that includes not only the more traditional employee, spouse and child coverage, but also dependent parent coverage and a metastasis benefit, can have a meaningful impact for employees.


People tend to believe that critical illnesses such as cancer, stroke and heart attacks are for older people, but growing numbers of younger people are being diagnosed with serious illnesses. And these people are dealing with expenses such as child care, mortgage, rent, credit cards and more. Critical illness insurance can help mitigate the financial challenges of a serious illness and bring a little peace of mind during a very stressful time for individuals and families of all ages. And isn’t that the point of insurance?

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Written by

Lydia Jilek
Securian Financial
Voluntary practice leader

Bio photo for Lydia Jilek

1. Healthline. "How common is colorectal cancer?" August 8, 2023.

2. UCDavis Health. "Under 50? Don’t ignore colorectal cancer awareness month." March 9, 2023. 

3. American Cancer Society. "Colorectal cancer rates higher in African Americans, rising in younger people." September 3, 2020.

DOFU 3-2024