Critical Illness Coverage
Has anybody in your family or a friend or colleague of yours had a life threatening illness? These are illnesses such as heart attack, stroke or cancer, or perhaps they have undergone heart surgery. What did they do? How long did it take them to recover? How did it affect their family and their business? It is likely that the impact on them and their families will last a lifetime. We raise these questions because we would like you to consider what you will do should you have a similar experience yourself. Will you be ready? You might think this is an academic exercise but with the possibility of cancer alone effecting every third person in Canada, it is worth considering very seriously.
As a company concerned with things financial, we at Ayoba would like you to be aware of how such a life threatening illness could affect you financially.
Financial Impacts of a life-threatening illness:
- While we have very good health care through our provincial health plans we are watching those benefits slowly ebbing away as the cost of health care grows for the provinces. So while you are well covered today, this may not be the case in the future. In addition we hear about experimental drugs not yet approved that are very expensive. Could you afford the $1000 per week pill? If you have cash, there is no waiting, you can buy the best treatment right away, if not please wait in line.
- You will be absent from work and not have income during that time. Disability insurance often has a 90 day waiting period. If you are back to work in less time than that, you will not receive benefits.
- Your spouse is likely to stop work to care for you, through your recovery. Your family may have its income dramatically reduced as a result. In addition you may need to pay a nurse to visit at your home to provide care.
- Your savings may be damaged for your retirement or your children’s education. If there is no income your savings for your kids will stop and so will the money going into your retirement plan. In fact you may consider drawing down the RRSP’s you have, which will definitely hurt your future retirement.
Protection from the Financial Impacts:
Dr. Marius Bernard of South Africa, watched his brother Christian perform the first open heart surgeries. He recognized that these people would survive but they need financial support to see them through recovery. He invented Critical Illness Insurance in 1983. Subsequently, it moved into Europe and then to North America. You purchase an insurance policy which pays you a lump sum, should you be diagnosed with a critical illness and survive it for 30 days.
Financial Benefit to You: When you have been assessed with a life threatening illness you register with the insurance company and after 30 days of survival of the illness you will be paid a tax free cash benefit. Similar to life insurance, there is a single payment made, but in this case it is paid to you, not your beneficiaries.
How much benefit can I purchase? The range is from $25,000 to $2,000,000. We recommend speaking to an advisor to plan carefully and avoid over-insuring this risk.
Are there age restrictions? Individuals between 18 and 65 can purchase this benefit.
How long will my coverage last? Most companies will cover you to age 75, there are a few that will extend to age 100.
Are there other benefits available? We find the best plans are all about helping you recover from your illness. The companies will give you access to organizations like, Best Doctors, to confirm your medical assessment and see that you have access to the best treatments available. A quality plan will offer you much more than a cheque.