Cost of Texas Critical Illness Health Insurance

The cost of obtaining a critical illness health insurance plan in Texas is not fixed as there are no different general categories or pricing levels. Instead, insurers create critical illness insurance plans tailored to the specific needs of each potential policyholder or offer coverage which includes a standard set of covered critical illnesses. Consequently, this causes a variation in cost. In designing any critical illness insurance policy, one of the vital variables insurers consider is the value of the Lifetime Maximum Benefit (LMB). LMB is the lump sum payout the prospective policyholder will receive after filing a claim. Generally, the higher the value of the sum assured, the higher the premium. Other factors influencing the cost of critical illness insurance are the number of conditions covered, prospective policyholder’s age, and smoking status.

To get critical illness insurance quotes, consult a Texas-licensed insurance agent. Knowledgeable health insurance agents know the market rates and can use information about your health needs to estimate the cost of plans that fit your needs. They can also assist you with choosing the right plan.

How Much Should I Pay for Critical Illness Insurance in Texas?

The amount an individual should pay for critical illness insurance in Texas depends on their unique realities and needs. The more coverage you get, the more you will pay for it. Engaging the services of a Texas-licensed health insurance agent can help you evaluate your individual needs and find a suitable critical illness insurance policy for you.

How to Understand the Cost of Critical Illness Insurance

The method of how critical illness insurance is calculated differs depending on the place from where it is being purchased. Critical illness insurance rates are typically lower for the pre-negotiated group coverage, compared with individually purchased options.

Buying an individual critical illness policy in Texas, the cost is primarily determined by the applicant’s age, gender, zip code, smoker status, and the amount of coverage needed. The cost is determined per $10,000 of coverage. To estimate the total cost, the cost-per-$10,000 is multiplied by the needed amount of times.

Tobacco usage is the biggest influence on the cost, as it can add up to 70%. Age is the second most important factor. If you plan to maintain critical illness insurance coverage for a long time, lock in the rate while you are young. Speak with a state-licensed health insurance agent who can help you assess your needs and shop multiple insurers for competitive quotes.

Group critical illness insurance cost is typically 30% - 40% less expensive than the individual plan. The employer negotiates the rates with the insurer based on the number of employees that are likely to get this coverage. Typically, the bigger the company, the less the coverage costs for each employee.

If buying a group critical illness insurance plan through an employer the cost is calculated using the monthly premium rate chart, which is usually provided by the Human Resources. The group rate formula is:

PREMIUM multiplied by COVERAGE AMOUNT divided by $1,000.

The resulting amount is paid monthly or broken down into 2 payments if the employee is paid bi-weekly.

See the group coverage calculations using the chart below:

• A 19 year old employee with $50,000 worth of critical illness coverage will pay $9.50 per month (or $4.75 per 2 weeks): $0.19 x $50,000 / $1,000 = $9.50
• 35 year old single parent with children will pay $37.05 for $65,000 of coverage: $0.57 x $65,000 / $1,000 = $37.05
• A 56 year old with her whole family on this plan would pay $387 per month for $100,000 of coverage: $3.87 x $100,000 / $1,000 = $387

What is the Average Cost of Critical Illness Insurance in Texas?

The cost of critical illness plans in Texas is not fixed. The three main elements that influence the cost of any critical illness plan are:

• Age - the older you get, the more expensive the coverage becomes to obtain
• Gender - Insurance policies for females are usually less expensive
• Smoker or Non-smoker - with all things equal, there is a significant price difference between insuring a smoker or a non smoker. While in your 20s, smoking can add 12%-13% to the cost of coverage, but if you continue to smoke in your 50s, you could be paying up to 70% extra for the habit.

How Much is Typical Critical Illness Insurance?

Critical illness insurance plans are usually purchased in the increments of $5,000 or $10,000. Coverage is cheaper if it is purchased while the insured is young, locking in the lower rate. If you wait until you are older to get coverage, the price will be higher.

If the policy is purchased while you are in your 20s, each $10,000 of coverage increase can be had for under $10. If you wait to get the policy until you are in your 50s, the coverage can be 5-7 times more expensive.

How Much is Critical Illness Insurance Premium?

The value of the sum assured, age, sex, habits, and health status all combine to influence the critical illness plan premiums. Persons whose policies pay large sums of money pay higher premiums than individuals with smaller payouts. Also, most insurers impose higher fees on persons who are more likely to develop any medical conditions critical illness insurance covers. Consequently, older adults, smokers, and persons with preexisting conditions tend to pay more premiums than younger persons and non-smokers.

How Much is Critical Illness Insurance Usually?

Most insurers in Texas offer critical illness insurance coverages ranging from $5,000 to $500,000. While you can opt for a coverage amount within that range that fits your budget and meets your needs, the most commonly purchased coverage is for $50,000.

How Much is Critical Illness Insurance per Month?

Typical premiums paid on critical illness insurance in Texas vary based on the source of the plan and the amount of coverage, which is sold in the increments of $1,000. Individually purchased policies are typically more expensive than group coverage, which is sometimes offered by employers.

While a 30 year old non-smoker may get $50,000 group coverage through their employer for around $35, on the individual critical illness insurance market this individual would pay closer to $50 for the same coverage. \
Smoking is the second largest contributor to the increase of the costs. The monthly costs for a smoker can be up to 70% higher than compared to a non-smokers policy.

Speak with a state-licensed health insurance agent who can assess your insurance needs and provide professional advice on coverage to fit those needs.

How Much Does a $75,000 Critical Illness Insurance Policy Cost?

The cost of critical illness insurance depends on the gender of the insured, the age, tobacco usage, and the zip code:

• A non-smoking Texas male may need to pay $56 to $397 for $75,000 of critical illness coverage.
• A non-smoking Texas female may need to pay $52 to $300 for $75,000 of critical illness coverage.
• A smoking Texas male may need to pay $71 to $600 for $75,000 of critical illness coverage.
• A smoking Texas female may need to pay $67 to $480 for $75,000 of critical illness coverage.

These figures are mere estimates. For more accurate quotes, you can engage the services of a knowledgeable Texas-licensed insurance agent. Agents are current with the existing market rates and can help obtain discounts on some insurance products, if available.

How Much is Group Critical Illness Insurance?

Group critical illness insurance is purchased through employers that choose to offer critical illness coverage to their employees. If your employer offers coverage, the costs may be:

• Fully taken care of by the employer - so the employee receives free group critical illness insurance for as long as they are employed by the organization that pays the bills,
• Partially covered - where the employer typically pays up to 50% of the group rate and the employee pays their portion,
• Fully paid the employee - if the employer offers an opportunity for its employees to purchase critical illness insurance, it means that the employee is paying a group rate. Group rate is always less expensive compared to any individually-purchased plans. So, even if you are paying the full cost without the contribution from the employer, are already saving

Does Critical Illness Insurance Have High Deductibles?

No. Unlike how regular health insurance deductible works, critical illness insurance policies do not have deductibles. Policyholders do not have to pay any part of the sum assured. As long as the insured does not default on the premium payment, the insurer will pay the agreed lump sum when required.

NOTE: While there is no deductible, most new critical illness insurance policies in Texas will be subject to a waiting period of 30 days. If the insured suffers a covered illness during the first 30 days, the policy will not payout.

Are Critical Illness Insurance Premiums Tax Deductible?

The premiums for critical illness insurance, just like the major medical insurance, are not tax deductible for the insured. A Texas business providing insurance critical illness coverage to their employees will find their premiums tax deductible as a business expense. (NOTE: Discuss taxation only with licensed and knowledgeable professionals).

Why is Critical Illness Insurance so Expensive?

Critical illness insurance is expensive because it is meant to be supplementary coverage, as a secondary layer of protection, in addition to the major comprehensive health insurance. If purchased as the sole protection, without the underlying major health policy - you need much more coverage, which becomes costly. Most frequently, critical illness insurance is offered by employers along with a high-deductible health plan, to help deal with large out of pocket costs in case of a qualifying illness. If purchased as a supplement, to cover a relatively low benefit amounts, of $5,000 - $20,000, it can be rather affordable.

In early years of life the coverage is much less expensive because the chances of getting a critical illness at a young age is also low. With age the health worsens and the premium goes up. Try to lock in your low rate while still young. The rate stays with you as long as you keep paying for it.

If you smoke and your critical illness insurance is too expensive, you can quit using tobacco and request a new policy reevaluation. After an agreed upon smoke-free period of time (usually 1 year) you may get the much lower non-smoker rate. You could cut your rate nearly in half.

If your critical illness insurance is still too expensive, speak with a Texas-licensed health and life insurance agent. Ask them for alternative options that can fit your insurance needs at a more affordable price. Ask your agent about the other supplemental health coverage policies, such as Disability income insurance, Hospital indemnity, and Short term medical - how can they assist or replace the expensive critical illness coverage.

Life insurance with critical illness rider can also fit your needs since most permanent life insurance comes with an option to use the death benefit towards qualifying medical expenses. Speak with a knowledgeable life insurance agent for more details about critical illness life insurance.

Why is My Critical Illness Insurance so High?

Age is an essential factor determining the cost of Texas's critical illness insurance plans. Many of the qualifying conditions in any critical illness insurance plan primarily affect older residents. Consequently, insurers tend to avoid risks by placing high premiums on the policies issued to senior citizens. Your coverage amount can also be the reason for the high cost of a critical illness insurance plan. If you opt for critical illness insurance plans with larger lump-sum payments, your premium is automatically higher. Also, opting for policies that cover more than one illness can increase the value of your monthly premium.

If your critical illness insurance is too high, speak with a state-licensed health insurance agent, who has access to multiple insurers that offer coverage in your area. A knowledgeable agent can check to see if there are better alternatives to your existing expensive coverage.

What Raises and Lowers Your Critical Illness Insurance?

Once you get the critical illness policy in place, its cost remains constant until you either use the purchased lifetime benefit or stop paying, at which time the policy lapses and there is no more coverage. If you are just shopping for a policy, the time is not on your side. The longer you wait, the more expensive the coverage gets. Critical illness insurance rates increase every 5 years: at 25, 30, 35, 40, and so on.

The next main thing that raises and lowers your critical illness insurance rate is your use of tobacco. Smoking can add 12% - 70% to the cost, compared to non-smokers.

Does Critical Illness Insurance Go Up After a Claim?

In Texas, critical illness insurance does not go up after a policyholder files claims. Instead, the insurer cancels the plan after a lifetime maximum benefit payout has been reached, and the policyholder loses the coverage. Some insurers permit individuals who have received claims for a previous critical illness insurance policy to reapply for another coverage. However, such an individual’s age and health status have a vital role in approving such an application.

The older you are when buying new critical illness insurance coverage, expect to pay more for it. Speak to a Texas-licensed insurance agent who understands market rates and can offer you suitable plans from multiple insurers.

What is the Cheapest Critical Illness Insurance Plan?

The cheapest critical illness insurance plans are:

• Group Critical Illness Insurance. If you have a chance to purchase critical illness coverage through a group policy, you will typically save 30% - 40%.
• Lowest Coverage. Smaller amounts of coverage will result in a cheaper overall plan. Buying more coverage than needed can be wasteful. Speak with a licensed agent to assess your true needs and help you save money today.

Does the Cost of Critical Illness Insurance Go Down Over Time?

No, the cost of critical insurance coverage actually goes up over time, until it typically stops being offered after 60-65 years old. Expect to see a higher price tag for every 5 years added: at 25 years old, 30, 35, 40, 45, 50, 55, and 60. The older you get, the more expensive the coverage becomes, so make sure you get it while it's still more affordable.

A Texas-licensed insurance agent can help you purchase suitable critical illness insurance plans.

How Much Critical Illness Insurance Do I Need?

There are no general state regulations guiding the critical illness insurance coverage amount in Texas. Critical illness insurance plans are personalized to suit every individual’s specific needs:

How Much Critical Illness Coverage Do I Need?

Factors to consider are your age, health status, family health history, conditions the policy covers, current income, and existing insurance policies, which can help cover the slack. Some individuals with major health coverage and assured sick benefits from employers may not require critical illness insurance. A person with a common illness in their family health history can opt for a plan covering only that condition. Yet, some other individuals can opt for an all-encompassing plan covering a range of predetermined conditions. Regardless of the subjective nature of any critical illness insurance plan, the commonly recommended critical illness amount needs to be sufficient to cover expenses for at least 3-6 months.

To obtain the most suitable and most affordable critical illness insurance plan, engage the services of a Texas-licensed insurance agent. They can review your individual needs and use the information gathered to recommend a suitable insurance plan.

Is it Cheaper to Get Critical Illness Insurance Through Employer, Association, etc.?

Group critical illness insurance is usually more affordable than individually purchased insurance plans. A group plan is open to people who work for the same employer or are in the same association. Many employers in Texas often offer this policy to attract the best talents. Obtaining a critical illness insurance plan through a group has some advantages. One such benefit is the attached group discounts on monthly premiums. Another is that many employers pay all or part of employees’ premiums. Employees whose employers do not contribute towards the premium are fully responsible for payment. However, such employees still enjoy the group discount on the premium paid. The typical savings offered by group critical illness coverage vs individual market-purchased plan is 30% - 40%.

NOTE: Make sure that your group plan is transferable when you leave the employer. If it is not, your coverage will stop as soon as you leave this job.

How to Save on Critical Illness Insurance?

Critical illness insurance can be pretty expensive, depending on the policyholder’s specific coverage. For this reason, you should find ways of getting the most affordable but suitable insurance plans. To do this, you may opt for critical illness insurance with lesser coverage or combining policies.

Most importantly, do not search for coverage alone. Ask a professional and licensed agent to do the leg work for you. You, the insured, get this service for free, so why not use it.

Can You Negotiate the Price of Critical Illness Insurance?

No, you cannot negotiate the price of insurance coverage. Instead, you can:

• Shop for alternative plans that may offer coverage that fits your needs and cost expectations better.
• Adjust the coverages to the amount where it provides enough coverage, but not so much as to make the overall policy too expensive.

While negotiation is not possible, using the services of a knowledgeable state-licensed agent can help you achieve your goals.

What is the Best Way to Save on Critical Illness Insurance in Texas?

The best ways to save on your critical illness insurance in Texas include:

• Starting early: Insurers see younger applicants as lesser risks. Consequently, they pay low premiums. Conversely, older individuals are more prone to developing any qualifying covered conditions, prompting most insurers to place high premiums on plans issued to them.
• Making healthier lifestyle choices: To calculate the premiums on any critical illness insurance policy, insurers usually place higher premiums on persons likely to develop covered illness. You can save on critical illness insurance, for instance, by quitting smoking habits.
• Buying limited coverage: To save more on your insurance policy, opt only for policies that provide that exact coverage needed. The more conditions your insurance plans cover, the higher your premiums.
• Bundling policies when obtaining more than one insurance policy: When purchasing more than one insurance policy, always bundle policies rather than buy them separately. Generally, you pay less when you combine insurance policies.
• Paying premiums annually: When purchasing a critical illness insurance plan, opt to pay your premiums annually rather than monthly. Many insurers offer discounts to policyholders that pay premiums annually.
• Exploring group critical illness insurance options: Group critical illness insurance offers policyholders specific discounts. You may use this option to enjoy some discounts.
• Engaging the services of licensed insurance agents: When choosing an insurer for a critical illness insurance plan, make sure to engage a Texas-licensed insurance agent. Agents sell insurance products from various insurers and have information on applicable discounts.

What Can I Do if I Can’t Afford Critical Illness Insurance?

If you cannot afford critical illness insurance in Texas, do not buy it. The policy is only supplemental coverage and is not mandatory.

How Do I Get Critical Illness Insurance if I Have No Money?

There is no way to get critical illness insurance if you do not have money. You do not need to buy critical illness insurance if you have no money since it is only supplemental insurance. If you do not have a major health insurance plan, at first you should get that coverage. You can look for plans on the federal health insurance marketplace yourself or ask a licensed agent to help you look. The marketplace will inform you if you qualify for premium subsidies that will help reduce the cost of their plan. If you have no money you may also qualify for Texas Medicaid.

How Much Do You Save by Paying Critical Illness Insurance Upfront?

The amount you save by paying critical illness insurance upfront in Texas depends on your plan. However, some plans do not allow upfront payment. You simply pay for your plan as and when due. If your plan allows upfront payment, you should ask about any possible discounts or credits.

What Discounts are Available for Critical Illness Insurance?

Certain discounts are available for some critical illness insurance policies in Texas. For example, insurers offer discounts on group critical illness insurance. To find out other available discounts, engage the services of licensed agents who deal directly with insurers.