Forget the emotional toll. Are you financially prepared for a critical illness?

Imagine being a mother, or a wife, or a single income earner paying all the bills…and being hit with an illness. The stories are numerous. A woman is hit with MS and once in remission, is terrified of returning to work for fear of a relapse. And yet she must. Or a mother of young kids (or her husband) is diagnosed with cancer, though being the primary breadwinner, must continue working rather than focus on recovery and time spent with family. It is hard to even contemplate, let alone plan for from a financial and emotional perspective. But there is some good news: thanks to the tremendous strides in medical technology, you are far less likely to die from a critical illness and may even make a full recovery (thank goodness). The problem, as the above examples illustrate, is that most people don’t have the money to stay financially solvent until they can once again earn a living. In fact, studies show that over 400,000 Canadians will suffer from a critical illness this year. At the same time, mortgage experts indicate that more than 40 percent of home foreclosures are due to a critical illness. Thankfully, that’s where critical illness insurance comes in. Toss emotions out the door and start thinking about the worst now. Here’s one woman’s story...

Think of critical illness like your safety net. You certainly never expect or hope to take a physical fall, but thank goodness there is something there to lessen the impact on your family’s future.

Patricia LaRochelle is a case in point.

When the 34-year-old woman found out she had cancer, it started a rollercoaster ride that turned her life upside-down for the next eight months.

“The diagnosis was a complete shock,” says Patricia. “There’s nobody in my family who has had cancer, I’m the first one. It was a definite surprise because I’ve always been healthy.”

Patricia had been feeling heaviness in her chest and had a lingering sore throat. She finally went to a walk-in clinic to see what was wrong and the doctor there knew right away that there was a problem.

“He immediately sent me to see my regular doctor and then I was off to the hospital for tests. Within a week, my doctor called to let me know I had Non-Hodgkins Lymphoma. Then it was back to the hospital for more tests. The results came back that the cancer was at stage three and was aggressive. I started chemotherapy two weeks later – everything happened very quickly.”

Obviously, there were a lot of things running through Patricia’s mind at this time. Fortunately for her, one thing she didn’t have to worry about was her financial situation.

How critical illness insurance works

Critical illness insurance does not replace your basic medical coverage or disability insurance. Rather, it pays a lump sum of money if you contract a specified illness and the survival period (usually 30 days) has been satisfied. There are no strings attached – once you qualify for the payout, you get a cheque to use any way you wish, and it doesn’t matter if you are able to return to work or not. You can seek private or out-of-country treatment, keep a business running, or pay down debts including your mortgage – it’s your call.

“When I first started chemotherapy, I called my financial advisor and he assured me I was covered under my critical illness insurance policy,” says Patricia. “There was some initial paperwork that was done within a week, and then I received a call from the head office saying my claim had arrived and it would be reviewed. The next day they called back, said the claim was approved and that a cheque would be on the way within the week. It was very fast.”

Patricia underwent six months of intense chemotherapy and, with the cancer in remission, is now on a maintenance chemotherapy program every three months.

“I’ve been really fortunate and the money from my claim has been such a blessing. When you’re first diagnosed you go through all these emotions: Am I going to survive it? If I can’t work, where is the money going to come from? My husband was still working but he took time off to be with me. To know that I was covered financially if I couldn’t go back to work, or if I had to get medicine that wasn’t covered under health insurance, was helpful and reassuring.

We had bought critical illness insurance a few years ago. My first reaction was ‘I don’t need this.’ I was young, in my twenties, but my husband said let’s do it anyway – if we need it, it’s there and if not, we get money coming back to us. When this happened to me, I thought Thank God I got it!”

A safety net when you need it

As the above illustrates, life can change on a dime, and too often, we are unprepared. It pays to consider all options to alleviate and lessen future stress in a time of upheaval. Think of critical illness like your safety net. You certainly never expect or hope to take a physical fall, but thank goodness there is something there to lessen the impact on your family’s future.

For example, a critical illness insurance policy could help you:

• Take time away from work to be with your seriously ill husband.
• Have your sister take time off work to care for your children.
• Pay off your mortgage and debts and not worry about getting back to work full-time right away.
• Go on that dream vacation or family trip that you were always saving up for.
• Pay for those drugs not covered by the provincial drug plan or your group benefit plan.
• Hire someone to keep the household together while you are having treatments or are too sick to make meals for your family.

Critical illness insurance provides you with benefits that give you increased options and choices when your life is spinning out of control. Whatever your needs, critical illness insurance is well worth considering. It can help ensure that a life-altering critical illness won’t cause a critical blow to your financial health.

This article was provided with permission from the writing and expertise of financial consultant Jill Chambers, CFP. Working with Integrated Wealth Management in MB and AB, Jill believes in working to create financial security for her clients by managing risk. You can e-mail her at jill@integratedwealthmanagement.ca or call her at 1-888-580-8807.

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