What Is Critical Illness Insurance?
In our last article, we looked at 5 Benefits of Life Insurance; today, we will be looking at Critical Illness Insurance. As we work to pursue our dreams, sometimes we are faced with obstacles that can derail or even shatter our dreams.
The income we earn is not only significant to ourselves, but it’s also vital for our loved ones’ well-being. Typically, our income covers our basic needs such as food, clothing, shelter, and, if you have young children, education.
Investopedia’s article entitled: “what is the 50/20/30 budget rule” touches on the importance of a budget as highlighted in Elizabeth Warren’s book: All Your Worth: The Ultimate Lifetime Money Plan. Our income is the foundation of our family’s dreams.
The Importance of Income
One of the best ways to explain the importance of insurance related to our income is to tell you a story. You may be familiar with it; it’s about a “Goose that Laid Golden Eggs.” It was written by a Greek storyteller named Aesop. Aesop’s story was about a farmer’s greed; we will look at the same story with a twist. Our story is about wealth and income preservation.
Now, if you had a goose that laid golden eggs, which would you insure, the goose or the eggs? Well, if you said the goose, you are right. Of course, you want to ensure you can get the life expectancy income from the goose.
And, if you said the eggs, you will also be correct because the eggs have value, and if you use that value to acquire a home, a car, and other items, it will be wise to insure it for the replacement cost.
Now let’s get back to the goose; we are like a goose that lays golden eggs, and those eggs represent our income. Every time we receive our salary, it satisfies our personal needs, family needs, or business needs. It means our income is significant to our well-being and should be protected.
Critical Illness
So you insured the goose, and you also insured the different types of properties you could acquire. What if your goose is diagnosed with a critical illness and can’t lay any more eggs? What’s next? Do you have enough money saved to handle a significant medical crisis?
If you are diagnosed with a critical illness, the benefits from our traditional health insurance plan may not be enough. Most health insurance policies will not cover the total cost because of the coinsurance factor. And, if it’s a critical illness, the coinsurance amount can be very high.
The coinsurance factor for health insurance represents the amount you the insured must pay in the event of a claim. This amount can vary; check your policy contract or contact your provider if you have a health plan.
How Does Critical Illness Insurance Work
A Critical Illness Insurance policy will provide a cash payout once you are diagnosed with one of the named critical illnesses in your policy contract.
The following are 5 Reasons why you should have Critical Illness Insurance:
1. Cover High Medical Expenses
In some situations, your health insurance policy may be insufficient when it comes to a critical illness. The high cost of medical expenses may surpass the limit on your health plan when it is needed most. At the Guardian Group in Trinidad and Tobago critical illness insurance coverage is offered up to $10M per life, including coverage with other companies.
2. Payoff Loans
Apart from covering high medical expenses, you can use excess funds to pay off outstanding loans if there are surplus funds.
3. Provides Money to Hire a Professional Caregiver
After being discharged from the hospital, neither you nor your family members may be able to care for your current unique medical needs. As a result, you might require the assistance of a qualified nurse during the convalescing period. The excess funds (if any) from your critical illness insurance policy can be used to pay the nurse.
4. Prevents Forced Liquidation
A critical illness insurance policy can protect your wealth and ensure you keep what you have accomplished. After you have worked hard to acquire your home, car, saving for your children’s education, retirement fund, and more, one critical illness can force you to liquidate everything to cover medical expenses.
Once you are adequately covered for critical illness, your policy can provide the funds to cover your medical expenses. As a result, you and your loved ones get to keep what was acquired. Therefore the focus is not on money but recuperation.
5. Provides Financial Peace of Mind
Peace of mind can be defined as inner peace. The diagnosis of a critical illness will inevitably cause you to think about your mortality. However, at this time, you shouldn’t be worrying about your finances. Unfortunately, you will worry if you are inadequately covered or don’t have enough money saved.
Being adequately covered with a critical illness insurance policy can provide financial peace of mind in the event of such a diagnosis.
Testimonies
Here are two clients from the Guardian Group who benefited from their individual critical illness insurance plan:
Lisa Creese:
“When I bought my first critical illness insurance policy in my early thirties, little did I realize the wisdom in protecting my income against the unforeseen at such an early age.
Nine years later, just after upgrading my coverage and the birth of my first child, I was diagnosed with breast cancer. My deepest regret is not buying more of this type of coverage when I was younger and healthier.
Having paid all my medical expenses and basic necessities, I still had some leftover to invest for my son’s education. I am forever thankful for the advice and support given by my financial advisor Ms. Rene Wanliss who was the first person I called after I left the doctor’s office that dreadful day”.
Ava Belcon
“I am a Breast Cancer Survivor. When my Insurance Agent, Ms. Joanne Frederick, recommended taking out a Critical Illness Policy back in 2014, I thought to myself, yeah, this is good. When I am in my 60s, if something happens to me, I would have this; nice.
Some four years later, I had to call Ms. Frederick to enquire about that policy I took out because, at age 39, I was diagnosed with breast cancer. I, a non-smoker, have never put my phone in my bra, was diagnosed with breast cancer.
Thank God for the critical illness insurance policy and for His goodness and grace. Jesus showed off in this journey and allowed me to receive my payment within two weeks of filing, to pay for radiotherapy treatment. The amount covered the entire cost of the treatment.
I thought in 2014 that the need for the Critical Illness Policy would kick in around the same time as my Pension, but I was wrong. I was under the age for routine mammogram screenings, yet I had breast cancer.
Please, I admonish you to do your personal and routine examinations. Do your routine mammograms and ultrasounds if you are age 40 and over.
Ladies, get your routine pap smears done. None of these procedures is a stroll in the park, but it just might save your life if there is early detection. Would I recommend you take out a Critical Illness Insurance Policy??? That’s all up to you, but it saved me!”
Conclusion
Ms. Creese and Ms. Belcon had the foresight to implement their agents’ advice and benefited from their critical illness insurance policy. Even though the world is still battling Covid-19, people are still being diagnosed with critical illnesses. After reading this article you need to answer this question: “do I need critical illness insurance?”
No one wants to be diagnosed with a critical illness. However, if you are, do you have enough money saved to handle this expense, and are you adequately covered?
Please speak to your provider or contact one of our Advisors today. You are more valuable than a goose, a house, or a car.
