1. What is critical illness insurance?
2. What is covered under this plan?
3. I already have life, disability and medical coverage, why do I need this?
4. What is the history of this product?
5. Some Canadian Statistics on critical illnesses
6. And did you know that:
7. Links
1.What
is critical illness insurance?
People
insured under this plan receive a lump sum of tax-free cash when they
are diagnosed with a covered condition and survive.
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2.What
is covered under this plan?
Basic
coverage:
Heart
attack
Stroke
Cancer
Comprehensive:
Depending on the insurance carrier chosen, additional illnesses can
be covered, such as:
Paralysis
Multiple Sclerosis
Motor neuron disease (ALS/Lou Gehrig`s disease)
Deafness
Parkinson's disease
Alzheimer's disease
Loss of speech
Loss of limbs
Coronary artery bypass surgery
Kidney failure
Major organ transplant
Major organ failure on a waiting list
Blindness
Severe burns
Coma
Late onset insulin dependent diabetes (after 45th birthday. Must be
insulin dependent for 12 months. 50% of sum insured is paid for this
covered impairment).
Loss of Independence
Aortic Surgery
Heart Valve Replacement
Benign brain tumor resulting in permanent deficit to neurological system
Occupational HIV infection
Additional benefits (vary by carrier chosen):
Premium refund at specified age rider
Waiver of premium rider
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3.
I already have life, disability and medical coverage, why do I need
this?
Critical
Illness is neither life or disability insurance, nor does it replace
your medical coverage.
Life
insurance is really "death" insurance, the beneficiary receives
the proceeds of the life insurance policy after a policy holder dies.
Disability
insurance pays out an amount of money on a monthly basis to a disabled
person while they are disabled for a specific period of time, i.e. $1,000
or $2,000 a month for 5 years, 10 years, to age 65 etc.
Critical
Illness insurance pays out a lump sum of money as soon as a person is
diagnosed and survives a covered illness for 30 days.
Although
Canada`s health care system is better than a lot of countries, our system
is undergoing major changes. Do you think our health care system is
getting better?
Critical
Illness insurance does not replace your medical insurance, but enhances
it by providing you with peace of mind at a time that you need it the
most. It can provide you with options that would otherwise not be available
to you.
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4. What is the history of this product?
The
first Critical Insurance products were devised in 1983 in South Africa
and are now sold widely in the United Kingdom, Australia, Ireland, Malaysia,
Japan and North America.
Critical
illness insurance was conceived by Dr. Marius Barnard, brother of Dr.
Christian Barnard, the famous heart surgeon. He found that patients
were now living, but their finances were totally depleted. Being a doctor,
he was well aware that financial stress after a difficult operation
also had bad medical consequences.
One
of the greatest virtues of Critical Illness Insurance is that the product
is not designed by insurance companies, but by medical professionals
with intimate knowledge of the consequences of a critical illness.
Critical
Illness plans were introduced to the United Kingdom in 1987 and in 1998
alone, 843,000 people purchased it.
In
1991 in Australia 4500 policies were sold, in 1998 that number exceeded
140,000
When
Critical Illness was first introduced in Japan, 500,000 policies were
sold in the first 10 months. 6 million were sold in the first 4 years.
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5. Canadian Statistics
Heart
Attack
1
in 2 Canadians will contract heart disease
1 in 2 heart attack victims are under the age of 65
95% of heart attack victims survive the initial occurrence
Stroke
50,000
Canadians suffer a stroke each year
1 in 20 Canadian run the risk of having a stroke before age 70
1 in 3 stroke victims are under the age of 65
Cancer
135,000
new cancer cases are estimated in Canada for the coming year
1 in 3 Canadians will develop a life threatening cancer
2/3 of the cost of cancer treatment is not covered by provincial medical
plans
(Source: Heart & Stroke foundation of Ontario, National Cancer Institute
of Canada, Statistics Canada)
Parkinson`s Disease
Approximately
80,000 to 100,000 Canadians have Parkinson`s
20% of patients are diagnosed under age 50
5 to 10% are diagnosed under age 40
Most (government and private) drug plans limit their coverage for patients
with Parkinson`s
Alzheimer Disease
316,500
Canadians have it now
by the year 2021, more than 592,000 Canadians will have it
Almost 25% of Canadians have a family member with the disease
$3.9 billion per year is spent on persons with Alzheimer`s in Canada
Average annual cost of care for a person with Alzheimer disease:
$36,794 for severe disease
$25,724 for moderate disease
$16,054 for moderate to mild disease
$9,451 for mild disease
Organ Transplant
Canada`s
aging population and growing number of cases of Hepatitis C and diabetes
will lead to a 152% increase in the need for organs over the next 2
decades. However, a slowing death rate means the number of organs donated
will rise by only 12%.
This
year, 5,441 Canadians who need transplants won't get them. By the year
2020, 18,278 people will be waiting for organs, but only 2,028 will
be available, leaving a "transplant gap" that will have quadrupled.
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6. And
did you know that:
more
than 50,000 people in Canada have multiple sclerosis.
MS is the most common neurological disease affecting young adults in
Canada. MS strikes between 20 and 40 years of age, and affects twice
as many women as men.
30,000 Canadians suffer from paralysis of 2 or more limbs
1 in 4 Canadians will suffer from kidney disease
OVERVIEW
Despite
the availability of critical illness coverage, you may wonder whether
the need to protect oneself against such hazards is as great as the
need for life and disability insurance.
Many
people do not realize that there is at least a one in five chance of
a male under age 40 suffering a critical illness before the age of 65.
If anything, this statistic is probably understated.
In
the U.K., one of the markets where Critical Illness Insurance products
are most entrenched, industry statistics indicated that the average
age of claimants in the last three years was 41. Even worse, one in
four claimants was under the age of 35!
In
general, the probability of surviving a critical illness before the
age of 65 is about twice as great as that of dying. For those who suffer
a stroke for example, 75% of the victims survive the initial event.
There are over 200,000 stroke survivors in Canada today.
When
examining the financial consequences of prolonged disability, it is
important to realize that the costs go far beyond what is needed for
hospitalization and immediate medical attention.
What
would it take to maintain your quality of life?
Could
you afford to pay off your mortgage and your debts?
What
about 24-hour care by an attendant or nurse should this be necessary?
What
about remodeling your home and car?
For
example, a victim of a stroke or paralysis will need to install lifts,
wheelchair ramps and automatic doors. These are all features which no
normal house is designed to accommodate. Don`t forget that these financial
considerations will affect not only your bank balance, but also your
health. Acute stress diminishes your chance of recovering from a critical
illness or disability. Flexible levels of Critical Illness coverage
enable you to cover full costs that could easily run into hundreds of
thousands of dollars.
It
is vital to stress that life and disability insurance on their own cannot
meet such needs:
This
last feature makes it very important to decide on the level of critical
illness coverage you need. Nonetheless, it is clear from the above comparisons
that critical illness coverage is adapted to meeting large, immediate
and unexpected expenses in a way that simple disability coverage can
never do.
In
the last decade or so insurance companies have admittedly made life
insurance policies more flexible to deal with the needs of the terminally
ill. It is now possible to structure such a policy so that a fixed percentage
of the policy`s benefits is advanced when a fatal illness is diagnosed,
the remainder being paid after death. Although a living benefit of this
kind is valuable, it may not be enough to cover the costs of living
with a disabling illness for years; and, even if it is, the money left
to your dependents after your death will have been severely depleted.
Long-term care insurance may prove too inflexible as those who suffer
from a critical illness often make full recoveries in varying degrees
of time.
Although
Critical Illness Insurance is different from normal life, disability
or health insurance policies it can readily be integrated with any policies
you already have.
Many
sales have been made on an acceleration basis, which means that an agreed
upon percentage of a life insurance policy's benefits is paid upon diagnosis
of a critical illness. As the new product made headway in the marketplace,
freestanding policies were devised. With such policies there is no life
insurance coverage; a lump sum--determined by the amount of coverage
desired--gets paid after an agreed upon period from diagnosis of a critical
illness has elapsed. Customers now also have the added benefit of being
able to add a critical illness component to existing life insurance
policies so that benefits are paid upon both the diagnosis of a critical
illness and upon death.
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7. Links
Critical Illness Insurance Centre
Critical Illness Research Tools
Check Canadian Cancer Statistics
Canadian Life Insurance Companies
Canada Life
RBC Insurance
Manulife
Transamerica Life
Markets
Canadian Market Information
TSE
Advocis Consumer Site
NASDAQ
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Trenton Financial
301-1111 Blanshard St.
Victoria BC V8W 2H7
E-mail: trenton@trentonfinancial.com
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