Critical Illness Insurance explained

Critical illness insurance cover shouldn’t seem like an unnecessary component of your insurance policy. If things go wrong in the future, this could save you a lot of money.

Over the years that I’ve been in the business, I’ve come across a lot of people who confuse a critical illness plan with a medical insurance policy. Yes, you are likely to be reminded now of that zealous insurance agent who tried shoving that critical illness insurance plan down your throat when you opted for a life insurance plan. Like most of us, you brushed aside his visions of doom; reasoning that you are too young to worry about stuff like this. I mean, who worries about critical illness at 28, right? Wrong.

My own father (who never smoked and drank socially) went through angioplasty at the age of 50 because of blocked arteries. By the time he was 55, the clogged arteries became worse and he had to undergo an open-heart surgery.

He was given another twenty years to live and bit his tongue while eating food one day. He neglected the wound and later it became malignant and he developed cancer.

By the time, the cancer was diagnosed, it had advanced to the throat and he had to have a part of his tongue and thyroids removed. Later it spread to the bone marrow and he died within a year.

The Financial Impact of not having Critical Illness Insurance

Staying with my father’s example, he never bought any life insurance, nor any critical illness insurance for that matter. He always thought it was a waste of money to buy insurance. Consequently he had to spend a lot of money to deal with his critical illnesses, i.e. the heart surgery and the cancer. The open heart surgery cost him a bomb and wiped out a chunk of his retirement savings.

After the open heart surgery he tried to recoup his lost savings by working harder but he could never work at the same efficiency as before the illness. This increased his stress levels and later he bit his tongue while eating. the cancer that followed cost AED 13,000 per chemotherapy session in a government hospital in the UAE. Since cancer treatment is cheaper in India, he had to leave his job and go to India for treatment. This wiped out whatever savings he had left.

Later me and my two brothers had to send him around Aed 10,000 every fortnight to sustain treatment costs there. Ultimately, he passed away leaving his dream home in India mortgaged to the bank. When he passed away we had to pay off the mortgage to avoid losing the house. This wiped out our savings too. Suddenly I found myself helping my brother financially to get him married as he was already engaged when my father passed away.

As you can see, not having critical illness insurance in my father’s case, really devastated our family finances.

How Critical Illness Insurance would have helped my father

If my father had bought critical illness insurance earlier when he was healthy, the insurance company would have paid out a lump sum when he underwent his open heart surgery. My father could have used the lump sum e.g. USD 300,000 to cover the treatment and surgery costs and maintained his current lifestyle for two to three years without a job. He could also have paid out the remainder of his mortgage to keep the house and save us from that liability.

How to get Critical Illness Insurance

Companies such as Zurich International Life, Friends Provident International, Royal London 360, Metlife Alico, etc… all have good critical illness insurance products. If you want to find out how you can protect your income against critical illnesses click on the image below to find out.