April 16, 2023

Critical Illness – Are You Protected?

Chris Lubell

Why Critical Illness Insurance Was Invented by a Doctor

Dr. Marius Barnard is the inventor of critical illness insurance.   In 1967, South Africa's Marius Barnard helped his brother, Dr. Christiaan Barnard, perform the first successful heart transplant. As he dealt with cardiac patients over the years, Marius noticed that those patients who were better able to handle the financial strain of their disease healed more frequently and at a far faster rate than those for whom money was a concern.  He came to the conclusion that while he, as a doctor, could treat patients, only insurance companies could afford to pay for the resources required to establish a setting that best encouraged healing.  He collaborated with South African insurance providers as a result, and the first critical illness policy was released in 1983.

Today's doctors will concur with what Dr. Barnard found: your chances of recovering are better the less stressed you are.  

Having one less thing to worry about, like money worries, when one has a major illness, can only be helpful.

Your life might change at any moment!

Case Study A: 55-year-old male lawyer

Tom had a lucrative litigation practise and was an accomplished attorney.  He had just established his own business and was looking for partners to expand the practise.  He supported his two adult children who were pursuing post-secondary education as a single father. Tom played competitive, highly ranked (senior class) tennis, ate well, and exercised frequently. He had always been in good health.
He received a prostate cancer diagnosis in 2006 at the age of 55.  Along with the emotional distress and rage he felt at learning of the diagnosis, he was also worried about the financial toll the illness may take on his practise and ability to support his kids. Fortunately, he had bought a critical illness policy five years previously, at the advice of his financial advisor.
Within a few weeks of his diagnosis, Tom was given a $250,000 tax-free benefit payment.  He called his advisor right away to express how happy he was that the advice had succeeded in achieving his original goals for buying the policy five years earlier.  He continued by saying that he was confident he would be able to approach the treatment and concentrate on rehabilitation in a good way after the financial stress had been relieved.
Tom is cancer-free today, his business is booming, and his children are successful professionals.

Case Study B - Female 52-year-old Retired Business Owner

At the age of 52, Christina was living a happy life made possible in part by the sale of her company a few years prior.   Her investments were doing well, and everything appeared to be fine.  Then 2008 arrived.  As if the stock market collapse wasn't bad enough, Christina had a stroke in December 2008.  Thankfully, the stroke was not serious.  As many of her symptoms were mild, the physicians initially believed that she had a TIA.  The MRI results the following morning revealed that it was a stroke that had resulted in some modest brain damage.
Within a few short months, Christina made a miraculous recovery and was nearly back to her pre-stroke condition.  Without knowing Christina, you wouldn't even be aware that she had one.
Christina had always been a firm believer in the benefits of having critical illness insurance as a successful business owner and mother.  She initially worried that her claim might not be approved for payment because her stroke was not that terrible and she had healed so rapidly.  These worries proved unnecessary as days following the stroke, she got claim checks totaling $400,000.
Although Christina's worry about having another stroke during her recovery period gave her some stress, she is positive that the absence of financial concerns at this time helped her recover nearly completely.
Even though their circumstances are very different, these two case studies highlight some important aspects of critical illness insurance:

  • No of their age or health, anyone can develop a life-threatening disease or condition;
  • Having enough money minimises stress, which can hasten the healing process;
  • It is not necessary to be disabled in order to be eligible for a critical illness benefit;
  • and the benefits are paid to the insured tax-free.

Contact me if you have any inquiries. As always, feel free to spread this information to anyone you believe would be interested in it.

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