Critical Illness Insurance
Why critical illness insurance can be so… well, critical
When I was in my mid-30s, I attended a luncheon seminar on behavioural finance, examining why we don’t do what we know we should to better manage our finances. I had the good fortune of sitting beside a bright, articulate young woman named Carolyn who was in the business of selling insurance and investment products.
A little about myself: I am a skeptic by nature and usually resist all attempts by salespeople to sell me anything. I become standoffish, my body language screams “leave me alone” and my “crustiness” factor increases ten-fold. On that day, though, the beauty of the exchange I had with Carolyn was that it was simply information sharing. Just my speed!
We talked mainly about my personal situation: single, living alone, sole breadwinner, a mortgage, mid-30s, etc. Because I did not have a spouse or children, I figured that life insurance was not for me. I had not heard of and therefore had not considered critical illness (CI) insurance. Carolyn provided me with basic information on CI insurance and gave me her business card should I ever want to discuss it further.
Further research showed me that CI insurance would pay me a lump sum* should I become seriously ill** and unable to work. In the face of no other source of income, except some disability coverage and a small savings account, the prospect of the increased medical costs that often come with illness, plus the ongoing costs that I would continue to be responsible for (e.g., my mortgage) if I did become sick, this type of policy seemed worth looking into.
A few things that I considered when doing my research:
- What gives me peace of mind?
- How much will this financial product cost?
- What can I afford?
- What are the pros and the cons of owning this type of insurance?
In the end, and after I had gathered enough information to make an informed decision, I determined that taking out a policy was worth it for me. (Keep in mind that everyone’s situation is different and it’s important that you do your own research before making a decision to purchase any type of insurance.)
Ten years have passed since I first signed up and I am glad that I made this decision. In the past seven years, three of my closest single friends have been diagnosed with cancer. None of them had critical illness insurance. While all three have recovered and returned to work, the mental and financial stress they went through during their illness may have been alleviated had they had critical illness insurance.
Talk to your family and your insurance or financial advisor about CI insurance soon.
*The amount of the lump sum payout depends on the policy purchased.
**Illnesses are defined by the insurance provider.