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Survival
At All Costs…
by Susan Laufer
Most Canadians
realize that it makes good sense to buy an insurance policy to
protect their family or business against the financial consequences
of untimely death or disability. But how many consider an insurance
policy that pays out on survival of a critical illness?
Well, they
should. The possibility of becoming critically ill isn't something
anyone likes to consider, but statistics are hard to ignore. In
Canada, one in four will suffer heart or stroke, and one in three
will develop some form of life-threatening cancer. Too many of
us have seen these numbers become reality when an unexpected illness
takes its toll on someone close to us.
The good news
is that recent advances in medical science, along with a growing
trend toward fitness and health awareness, have increased chances
of surviving a critical illness. The bad news is that survival
can be expensive.
To compensate
for the high cost of overcoming a critical illness, at least 10
companies now offer life insurance that pays out on survival,
rather than on death. In the industry they're known as critical
illness policies.
Canadians
have always had faith in the health-care system. But it has undergone
a lot of changes in recent years and continues to be in flux.
Many of the expenses related to critical illness simply aren't
covered by the government, employers or disability insurance.
Medical research is constantly discovering new avenues to explore
for possible cures, but many treatments won't be covered by government
health plans until years of testing have passed. Sometimes only
the wealthy are able to get the latest treatments. A critical
illness insurance policy could open access to out-of-province
or out-of-country treatment otherwise too costly to pursue.
The case of
Deborah Hicks illustrates how critical illness insurance works.
The 37-year-old mother of three, a nonsmoker, works part time
from home as a freelance journalist. But last summer, Hicks suffered
an injury to her spinal cord in a boating accident. She spent
eight months in intensive therapy; learning how to adjust to life
in a wheelchair. Fortunately, Hicks had been paying $33 a month
into a $100,000 critical illness policy.
While her
monthly disability insurance payments provided Hicks and her family
with enough money to cover ongoing living expenses, the $100,000
pay-out from the critical illness policy financed home renovations
for wheelchair access, from installing ramps and chair-lifts to
expanding bathrooms and lowering sinks and appliances. Stress
often impedes recovery, and Hicks insists that she was able to
adjust to her new lifestyle more smoothly than anticipated because
she didn't have to worry about money.
Money from
a critical illness policy is the recipient's to spend however
he or she thinks best facilitates recovery - no questions asked.
Whether it's a month's recuperation in the Bahamas or paying off
the mortgage to give the patient peace of mind, the choice doesn't
depend on the decision of a doctor or insurance company. Without
limitations or daily maximums, it's paid out as a tax-free lump
sum, 30 days after diagnosis.
A word of
caution: there are several critical illness insurance plans on
today's market. Before you decide to buy, get a qualified advisor
to discuss which plan gives you maximum protection. Most cover
cancer, heart disease and stroke, known as "the big three,"
since the chance of incurring one of them is much greater than
any of the secondary diseases sometimes covered. However, not
all plans cover cancer, heart disease and stroke equally; exclusions
and restrictions vary, so read the fine print carefully.
After the
big three coverage, individual plans diversify in what they include.
Some cover conditions like multiple sclerosis, paralysis, kidney
disease, loss of speech or hearing, and so on. It's wise to get
a plan that covers the highest number of variables. But keep in
mind that the more comprehensive the coverage, the more expensive
it tends to be. You get what you pay for: a few more dollars a
month could translate into thousands saved years down the road
if you acquire a type of cancer covered under your policy.
None of us
like to think about the likelihood of suffering from a critical
illness, but the statistics show that it's a possibility we face.
Owning a policy that covers it could prove critical to your financial
well-being.
Susan Laufer
is an insurance broker with Qualified Financial Services Inc.
in Toronto. Previously she worked as an occupational therapist
and health-care consultant. You can find out more about Susan
and the products that she offers by visiting the website at: http://www.criticalillnessplans.com
Visit our
discussion
forums to share your experiences with dealing with critical
illnesses and the hardships you have faced.
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