Critical Illness: What Awaits You and Your Business if You Get Sick?

Critical Illness Insurance

Why a Doctor Invented Critical Illness Insurance

Dr Marius Barnard invented Critical Illness insurance. Marius assisted his brother Dr Christiaan Barnard in performing the first successful heart transplant in 1967 in South Africa. Through his years of dealing with cardiac patients, Marius observed that those patients that were better able to deal with the financial stress of their illness recovered more often and at a much faster rate than those for whom money was an issue. He concluded that he, as a physician, could heal people, but only insurance companies could provide the necessary funds to create the environment that best promoted healing. As a result, he worked with South African insurance companies to issue the first critical illness policy in 1983. Medical practitioners today will confirm what Dr Barnard observed – the lower your stress levels, the better the chances for your recovery. When one is ill with a serious illness, having one less thing to deal with, such as financial worry, can only be beneficial. What is the long term effect of a potential illness to your business, wealth and retirement?

Your Life Could Change in a Minute!

Case Study A – Lawyer, Male 55

Tom was a successful lawyer with a thriving litigation practice. He had recently started his own firm and was recruiting associates to build the practice. He was a single father assisting his two adult children in their post-secondary education. Tom had always enjoyed good health, ate well, exercised regularly and was a competitive, highly ranked (senior class) tennis player. In 2006, at age 55, he was diagnosed with prostate cancer. In addition to the emotional angst and anger at receiving this diagnosis, he also was concerned about the financial impact this illness could have on both his practice and his support of his children. Fortunately, five years earlier at the urging of his financial advisor, he had purchased a critical illness policy. Within weeks of his diagnosis, Tom received a tax-free benefit cheque for $250,000. He immediately called his advisor to tell him how elated he was that the advisor had overcome his initial objectives to purchasing the policy 5 years earlier. He went on to say that with having the financial stress alleviated he was certain he would be able to tackle the treatment and positively concentrate on recovery. Today, Tom is cancer-free, his practice is thriving, and his children are successfully working in professional practices.

Case Study B – Retired Business Owner, Female 52

Christina, at age 52, was enjoying a good life that came partially from the sale of her business a few years before. Her investments were thriving, and everything looked rosy. Then 2008 came along. As if the stock market crash was not enough, in December of 2008, Christina suffered a stroke. Fortunately, it was not a severe stroke. At first, the doctors thought that it was actually a TIA as many of her symptoms were minor. The next morning the MRI results confirmed that it was indeed a stroke and it had caused some minor brain damage. Christina made a remarkable recovery and within a few short months was almost back to where she was before the stroke. If you didn’t know Christina, you wouldn’t have any idea that she had even had one. As a successful business owner and mother, Christina had always been a big believer in the advantages of owning critical illness insurance. At first, she had some concern that because her stroke was not that serious and she had recovered so quickly, that her claim might not qualify for payment. These fears turned out to be unfounded as days after the stroke she received claim cheques for $400,000.

Critical Illness:  It’s Just So Random

During her recovery period, Christina was fearful of having another stroke which caused her some stress. However, she is certain that not having any financial worries during this time aided in her almost total recovery. These two case studies, although quite different in the circumstances, illustrate some key points about Critical Illness insurance: A life-threatening illness or condition can strike anyone regardless of age or health; Financial security reduces stress which can assist in the recovery process; You do not have to be disabled to be eligible for a Critical Illness benefit; Although you need to be diagnosed with a life-threatening illness, you do not have to be at “death’s door” to have your claim paid; The benefits are paid tax-free to the insured. Call me to see if critical illness is right for you or as always please feel free to share this article using the sharing buttons with a friend or family member you think might benefit from this information. Chris Coulter is the Founder and President of The Finish Line Group.  He works with business owners to leverage their businesses to increase their wealth, reduce corporate and personal taxes, create viable succession strategies, enable employee retention strategies and allow them to exit their businesses on their terms.  Chris’ passion for what he does evolve from the mistakes he made in his first business; by not diversifying his risk and not utilizing a lot of the opportunities within his business to create significant wealth.  Chris found out the difficult way and now educates business owners on how to avoid many of his former oversights and ultimately control where their finish line ends.