A critical illness insurance trade group is highlighting the benefits of having such coverage with a new survey detailing the possibility of serious illness or injury.

The first National Critical Illness Risk Assessment Study, published by the American Association for Critical Illness Insurance, suggests offers an assessment of the risks of a condition.

Jesse Slome

“Surviving a critical illness is likely today as a result of advances in emergency treatment and medical care,” Jesse Slome, executive director of the American Association for Critical Illness Insurance, said in a statement.

While medical advances mean more people will live longer, serious illnesses continue to drain family’s resource.

“Survival comes with a high cost even for those with health insurance, which often is accompanied by co-pays, high deductibles and exclusions for various new treatments,” said Michelle Dyke, an actuary with Milliman, which prepared the study. “There are substantial non-medical expenses associated with battling a critical illness including travel expenses to see specialists and lost wages that health insurance does not cover.”

Critical illness insurance pays a tax-free, lump-sum cash benefit generally upon diagnosis of a covered critical illness.  The first policies became available in the United States in 1996 and today more than 600,000 people are covered by these policies.

The survey found that a 25-year-old male non-smoker has a 24% chance of having a critical illness (cancer, heart attack or stroke) prior to turning age 65. The same-aged male who smokes has a 49% chance, the survey found.

“Cancer, heart attacks and strokes happen at all ages and most people are not prepared for either the emotional or financial cost,” Slome said.

Nearly two-thirds of U.S. bankruptcies are the result of medical expenses and 78% of those filing for bankruptcy had health insurance when they were first diagnosed, Slome said.

The national critical illness risk assessment revealed that the likelihood of incurring a critical illness for men and women at different ages up to age 55.  According to the study’s findings, women face less risk than men at all ages.

Non-smoking women are at significantly less risk than their male smoking counterparts. While nearly half (49%) of 35-year-old male tobacco users will incur a critical illness before age 65, only 35% of female smokers will, according to the report.