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New insurance plans could prevent medical bankruptcy

Nearly two in three bankruptcy filers in the nation do so because of runaway medical costs. Even in the era of health care reform, many Washington, D.C., residents are suffering financial difficulties because of their medical expenses. Shocking statistics show that by 2020, medical expenses are slated to grow about twice as quickly as inflation, opening the door for even more bankruptcy proceedings.

Patients are not only facing significant medical costs, but they also suffer because of the incidental expenses incurred because of a critical illness. People who have been affected by a serious condition may be unable to work, and their savings can quickly be depleted. Without that important income, households can find themselves suffering from serious financial woes in a matter of months.

There is a solution to this problem, however, which is now being offered through some employers. For about $10 per month, workers can purchase insurance that will provide them with a lump-sum payment when they are diagnosed. Critical illness insurance is primarily available through employers, though it can also be purchased for individual clients, as well.

Such insurance may provide some measure of financial relief for those who are suffering because of medical and non-medical costs related to their illnesses. The payouts from these policies can be used for any expense. Insurers only ask for documentation of a formal diagnosis.

If you are among those who are suffering from financial difficulties because of medical costs, you have a variety of options. These can include seeking protection under Chapter 7 or Chapter 13 bankruptcy. No one should have to experience ongoing financial hardship because of a medical condition that is out of his or her personal control.

Source: MSN Money, "This policy can stave off medical bankruptcy" Juliette Fairley, Apr. 16, 2014

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