CRITICAL ILLNESS INSURANCE: REASONS
I think that it is very important for you to know whys and wherefores of CI.
So, we all know that illnesses are still the leading cause of death. Also I would like to present you some sad statistics: 30% of men and 27% of women, who did not have any health problem in their youth, develop a critical illness by the age of 65.
As a case in point you can see some data from Canada:
- 1 out of 4 Canadians has some form of heart disease.
- 1 out of 3 Canadians develop cancer during his/her lifetime.
- More than 50,000 Canadians suffer a stroke every year.
Unfortunately, on average, people are diagnosed with a critical illness at the age of 41.
We can say that CI is our Living Benefit, since it’s designed to protect us if we becomes ill. That is especially important given the growing rate of survival of critical illness patients, as supported by the following data:
- survival rate for cancer patients doubled since 1970.
- mortality rate for patients with cardiovascular diseases has dropped during the last 10 years.
- 75% of people survive their first stroke, but 60% become disabled.
It’ s always easier to explain everything using different situations in real live. That is why I’d like to demonstrate with a good example, taken from Mr. Totrov personal site (www.totrov.com):
“…Traditional insurance may not always provide protection. For example, John is earning 40,000 and has employer-provided benefits which include Long Term Illness Insurance. He also has Life Insurance with 400,000 coverage to protect his wife and children. Unfortunately, John suffers a heart attack: stressful job and financial instability take their toll, but he survives (in one of Toronto’s leading cardio hospitals, as many as 91% of patients live more 30 days after the attack). Usually in the period following a heart attack, family income falls, since the patient is not capable of working (and so is the spouse, who may have to stay at home to provide care), but expenses accumulate (medications, visits of a nurse, an operation in the US, where it can be performed immediately as opposed to waiting for a free operation in Canada). Three months later, the situation is more or less stable. John’s wife could return to work, and John himself is feeling much better. He, however, is no longer able to handle his former job and would like to find something less demanding. Acquiring new skills and getting experience in a new field requires time, and John will need means subsistence during his transition. Unfortunately, neither his life insurance nor the employer’s disability insurance will provide any assistance, since John survived the attack (so life insurance cannot be claimed) and is able to work but is simply seeking a different position (and, thus, can no longer be considered disabled).
CI, on the other hand, would provide protection in this situation: John would receive the entire amount of his coverage, tax-free, on the 31st day after the attack, with no restrictions on how this money could be spent. He could pay off his medical expenses, go to a warmer climate for faster recovery, or simply enjoy piece of mind knowing he does not have to search for a job immediately…”
In that way, CI can be accepted as true Life Insurance, since it’s the insured who gets the benefits of the program. And Life Insurance for one’s turn is more properly called Death Insurance: the benefits are paid only in case of death to the relatives of the insured.
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Yours sincerely,
AlexSandra
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According to www.totrov.com