Knowing Critical Illness Insurance.
Let me request a couple of question of you:
Are you aware of of anyone who has had a heart attack, stroke or cancer?
If you were to possess a heart attack, would your doctor tell you in order to rest at home or continue to work everyday?
Would you want to decrease your stress or increase it?
With the ever-increasing frequency of people surviving a major healthcare event such as a heart attack, stroke, malignancy and by-pass surgery, most of us have had a friend or family member who has contracted one of these conditions. To understand what Critical Illness Insurance policy is meant to do, you have to look at the results that those illnesses have on the individual from both a physical, psychological and financial basis.
Critical Disease Insurance was first developed in S. africa, with the first heart transplants. They found that the patient recovered through the physical operation but that their particular finances did not survive. This monetary stress led to numerous emotional issues, the loss of dignity and a reduction in the standard of life. I have personally seen children that thought they were fully prepared for any situation, only to find that when the husband had a severe stroke, they will lost everything they held beloved. The husband had been the major breadwinner of the family and had adequate term life insurance. He had a group insurance program that supplied some income replacement plus did not believe that he would require any further coverage. When he suffered the stroke he was no longer able in order to speak, stand or control one particular side of his body. He was bedridden and had to be used in a wheelchair by way of a mechanical lift. The cost of medication, medical devises plus renovations to their home in order to accommodate the needed equipment had never been budgeted for and utilized a large part of their savings. No longer able to work and the income replacement system only replacing 66% of his wages meant that they could no longer afford to live the same lifestyle. The wife could not go out to work mainly because she needed to stay at home and provide the particular daily care her husband right now needed. The financial stress became unbearable as the costs of treatment continued to increase while the available money decreased. After approx 4 years without any kind of improvement, the wife could no longer cope. She separated from her husband and he ended up being committed to an institution therefore he could be cared for. All of their dreams and plans died as a result of this person’s unfortunate situation. This family lost a functioning husband plus father but also their lifestyle, their self worth and dignity.
The example above points out several important facts. First, that even though someone may survive the medical occasion, they may need to drastically alter their own lifestyle. This may involve costs that are unanticipated and can be dramatically higher and not covered by provincial health programs. I know of a case where cancer caused a $42, 000. 00 per year drug cost that was not covered.
The second fact is there may be consequences to other family members other than the sick person. The wife in the over case had to become a 24-hour each day care giver with little to no outside support. The emotional drain over time had disastrous outcomes.
The third fact is that the husband himself had a severe loss of dignity. Can no longer function on his own, required help for every function of daily living however he still had a functioning brain. The stroke had left him physically impaired but after some time he or she was able to communicate his frustration and anger at being the way he was. I can only imagine exactly what this would do to his self worth and dignity.
Critical Illness Insurance is a tax free lump sum of money that will be paid to you following a short waiting period, normally thirty days of being diagnosed with any where up to twenty five different illnesses. Approximately 87 % of all claims here in Canada come from heart attack, stroke, cancer or by-pass surgery. Other covered conditions include Parkinson’s, Alzheimer’s, Coma, Severe Can burn, Benign Brain Tumour, Loss of Independent Existence and many others. Each company provides their own list of covered events great all of the companies use benchmark definitions so qualifying is the same irrespective of which company you purchase your policy through. The amount you can purchase is anywhere from $25, 000 to $2, 000, 000 and your policy can include a return of premium.
Let us look at what impact a Critical Illness policy might have experienced on the family in our example. When the husband was diagnosed with the stroke and the waiting period satisfied, the family would have received a tax-free lump sum of cash. This cash might have paid for the renovations and devices that was not otherwise covered. The family savings would then not have been drained. The cash could have been used to provide a private duty nurse so that the wife could have some time off or work on a part time basis. This would have got assisted with the financial cost of therapy as well as provided the wife using a source of self worth and dignity she did not have. The cash might have provided alternative treatment in some various other country that this family was not able to afford. We can never underestimate the psychological effect that holding out hope of improvement can have.
Today, Canada is the last country that still has the ability to offer the return of superior rider. With this rider added to any policy there are only 4 situations that can occur. They are:
1) You live a long healthy life and at the particular expiry date of the policy you will get all of your premiums back.
2) You die early while the policy is in effect and not having been used. Your own beneficiary will get all your premiums back.
3) After a certain number of years, you will no longer want the policy and you cancel it. You get all your premiums back again.
4) Unfortunately you contract among the covered illnesses, you get paid the tax-free lump sum of cash
In summary, critical illness coverage is meant to supply the financial ability to make sure the individual and their family can survive with their life in tact, free of the particular emotional and psychological problems that these situations bring with them.
I would ask you to assess what the impact of one of such conditions would have on you and your family members.
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Are you properly covered? If you have questions or need to do something about obtaining covered, please call me.