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Critical Illness – Catch-22

By Finbar Garcia LUTCF, FSS, MFA

Have you heard of this famous phrase ‘Catch-22’?

It refers to this, “A dilemma or difficult circumstance from which there is no escape because of mutually conflicting or dependent conditions.”

But have you ever been in this situation financially? This brings me to the ongoing serious issue of critical illness. The number of persons being infected with critical illnesses has increased in the last decade.

While it is important to take all precautionary measures to prevent such diseases, it is equally important to stay financially protected in case you fall prey to any serious illness.

If you closely evaluate and single out the cost of treatment for critical illnesses, you would be amazed to see how expensive this can be at reputed private hospitals.

If you opt for treatment abroad, then the cost just doubled or tripled and the headache of securing foreign exchange comes into focus.

This brings me to the main point….Catch-22. Having been diagnosed with a critical illness, your entire lifestyle and that of your family would change drastically.

You may have to stop working temporarily, shorter hours or even permanently, which would affect your income and that of your family, putting dependants under tremendous financial trauma.

Data has shown that an individual may need three to five years to recover from an illness and that is not counting your financial situation at the time. Onset of a critical illness is not age restricted, so having your policy coverage extend beyond age 65 or 80 is better for you.

Considering all the factors, buying a critical illness insurance policy has become absolutely essential for all, irrespective of their age and gender.

Under a critical illness policy, the insurance company would pay the policyholder the entire sum insured as a lump sum, based on diagnosis or completion of surgery according to the illnesses covered and terms of the contract.

In determining the amount of critical illness coverage, you should consider the following:

  • How long would I be out of work?
  • What’s the average cost of treatment locally based on the major critical illnesses?
  • What’s the monthly financial commitment to my family’s household?
  • How long would treatment last? Weeks, months, years?
  • What’s the financial adjustment period I would need, 3,4 or 5 years?
  • Should we sell the house and move back with my in-laws?
  • Can I really cut or curtail monthly expenses?
  • What’s my family medical history…both sides? Disease and onset.

Let’s get real. Do you want to have a barbecue or prefer a critical illness policy? If you think it’s expensive now, it will certainly cost you more not having it. These are just a few of the thought-provoking questions that need answers. Based on my experience, when someone is diagnosed with a critical illness, the foremost on their mind is “cost of health care and am I going to die”.

Your critical illness policy should remove the concern of “cost” and in so doing remove “death”, as you would be properly covered to receive the best health care money can buy. Let’s look at this example.

Tom and Betty are married and have three young children. They both share the expenses to live comfortably. Tom’s income is $15,000; Betty’s income is $12,000 per month.

Let’s say they both spend 60 per cent of their income on all expenses to run the house, from mortgage, car loan, groceries, general expenses. Their main concern is heart issues and cancer as they have seen friends and family suffer from these and it’s in their family medical history. So, let’s work the cost.

By doing this, Tom and Betty would secure four years of living expenses along with the coverage needed for health care based on their concerns.

They can pay off some short-term debt, like vehicle loan and credit cards and even advance their mortgage.

Being medically confined and having reduced or no income, would only add stress to your current health situation and create unwanted and unplanned family adjustments that might restrict the dreams for yourself and children. Many persons suffer financially during times like these and reduce their chances of survival.

You won’t want the bank taking your home because you became critically ill and how long can family and friends carry you? Would you prefer I bring you some flowers and get-well cards, or a cheque for $1 million?

Many people decline insurance because they are healthy and believe they won’t get sick. However, insurers declines people because they are sick.

It’s better to have it and don’t use it than want it and can’t get it.

Call me and I would tell you how you can get a Critical Illness policy with a life insurance guarantee to age 100.

“Education is not the learning of facts but the training of the mind to think.” –Albert Einstein


Send questions to or call 620-1185.