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28 March 2024

Money Column: The case for covering critical illness

Published
By Sandi Saksena
I encounter many prospects who stop me in my tracks declaring that the number of facts and figures available to them, as they work for multi- nationals, means their financial planning is well taken care of.
From: I am a US citizen so I am covered for all health matters, or I am Canadian so I pay into all government sponsored plans; to: I’m single and don’t have any dependents, I’ve heard it all.
However, there are some questions that loom large and many points that need clarification.
Will the US Medicare, or the Canadian healthcare system, the British NHS continue to offer quality health and who will qualify for these benefits in the future? 
I draw your attention to Critical Illness Insurance - a cover that offers innumerable benefits.  
I signed up a client who was what I call a tough cookie.
After all the ‘logical’ arguments - the financial analysis, term vs whole of life, how he could put his money to better use, how he and his wife were young in good health and lead a rather holistic lifestyle - he signed up for a plan with critical illness.  
Last year I got a call from this client, the healthily holistic man had suffered a heart attack at age 49. He wanted to claim under his ‘useless’ critical illness benefit.  
All medical reports, were test results submitted and accepted and he collected a check of US 220,000/- Accepting the check he asked if he could take another critical illness cover.
Just four months later his 47-year old wife had been diagnosed with breast cancer, had a mastectomy and was now on chemotherapy. Yes, the claim was paid out: $ 150,000.
Recently a young client of mine signed up for the same cover, she had just lost her mother to a malignant brain tumour.
Having taken loans from the bank, her retirement fund and sold some of the valuables at home, she is well aware of the consequences of a critical illness. She says one cannot and should not depend on family or friends. 
‘It is totally unfair to expect others to pay for your care. You need to be responsible for yourself,’ she said
So, who needs critical illness cover? Are you too young, too old, will it really matter if you fell critically ill?
Anyone between the ages of 18 to 65 should have this cover, why, because critical illness makes no distinction on who it strikes, and there will always be a large sum of money involved for the treatments, and recuperation.
This cover is generally attached to a life insurance policy. It may be referred as critical illness, dreaded disease and /or terminal illness cover. Some of the policies offer this covers till age 65 others till age 85 and some for whole of life.
Factors that will determine the cost are your age, smoker or non-smoker status, and your present state of health.
Generally, critical illness cover pays out a predetermined amount of money in a lump sum on the confirmed diagnosis of any of the (listed) illnesses. 
This diagnosis should be by a qualified competent medical practitioner from a recognised health facility.
The pay out is not contingent on medical bills or evidence of any kind of surgery and you receive the money irrespective of nay medical insurance you might have.
Once this money is paid to you, it can be used for any purpose, ‘no strings attached’ from better medical care, more expensive treatments, experimental or herbal therapies, traveling to another place beneficial to your recovery, prolonged supplemental protocols etc.  
The instances in which this money can be of used are innumerable.
So, is this for you? Will it help in your hour of need?  
The writer is a Financial Planner and Member of the Million Dollar Round Table.
Do you have a question for Emirates 24|7’s financial expert. Write to her at financialplanning101@yahoo.com