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When Sandra Miles was diagnosed with blocked arteries at 49 years old, her doctor's appointments, lab tests and surgery were fortunately covered by her health insurance policy. What wasn't covered, Miles paid for out of pocket.

"There are expenses you don't think about when you're healthy like the cost of getting to and from medical appointments and child care," said Miles, who charged the unexpected ancillary expenses on multiple credit cards. "I went through $5,000 in savings and it still wasn't enough."

After racking up an additional $18,000 in debt and resigning from her high pressure job as an advertising executive, Miles filed for bankruptcy.

"I couldn't pay," Miles told MainStreet. "I had no choice."

Miles is among the 62 percent of Americans who've declared bankruptcy due to runaway medical costs and 3/4 of them have health insurance, according to Dr. Robert Pokorski, vice president and medical director of Prudential Individual Life Insurance. About one in five of American men compared to one in five women will be diagnosed with coronary heart disease, and one in 12 men will be diagnosed with cancer compared to one in ninewomen.

"The need for care increases as we get older," Pokorski said recently.

From 2011 to 2020, medical expenses are expected to outpace inflation at an annual rate of 5.3 percent versus 2.1 percent for general inflation, according to the Department of Labor.

As a result, most Americans will be unprepared financially to cope with an illness without significant savings.

"There is a gap and it's growing as out of pocket health care costs continue to grow and as individuals continue to incur non-medical costs related to a critical illness," said Bob Patience, vice president of voluntary benefits with Prudential Group Insurance.

Half of all U.S. households have savings less than $10,000, according to Prudential data.

As a result, Prudential is offering critical illness insurance through employers. For about $200 to $250 per year or $8 to $10 a month, employees who fall ill with cancer, kidney failure, stroke, heart attack, coronary artery disease and other serious illnesses, can receive a lump-sum payment upon documented diagnoses.

"You may have a greater need for critical illness insurance if you don't have savings to cover unexpected medical costs," Patience told MainStreet.

Although Prudential does not offer the product to individuals, insurers, such as Mutual of Omaha, do.

"The risk critical illness insurance addresses what happens when you are diagnosed with a critical illness and the medical and non-medical out-of-pocket expenses related to that," said Patience.

A benefit payout from critical illness might be $15,000 for an employee and can be used for any purpose the policy holder chooses. That includes medical or non-medical expenses or even a vacation to recover from the stress of a heart attack, for example.

"Beyond documentation of the illness or condition, we don't require receipts or invoices and we don't ask questions once an insured is diagnosed and eligible for the lump-sum payout that our critical-illness product affords," Patience said. Critical illness insurance is not to be confused with disability insurance. They are different types of coverage for two different risks.

"Disability insurance is triggered by a disability that prevents an individual from working," said Patience. "It often pays a portion of salary or a set monthly amount while critical-illness insurance is triggered by a diagnosis of a serious illness and pays a lump sum that can be used for any purpose."

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