How are you feeling?
There are very few of us who don't know anyone who has been the victim of a
critical illness. Whether we contract such illnesses or even survive them
is often out of our own hands Ivan Doherty suggests ways in which we can protect our
financial ability to support our families and ourselves during recovery.
There are many types of insurance and assurance available to expatriates,
whether arranged through local advisers or through advisers and
insurance companies back in your home country (technical note:
Insurance is cover against an event that may happen assurance is
cover against an event that will happen).
Most people take great care to insure their possessions against loss or
damage, whether at home through a home contents policy or through a travel
policy if you are away from home. Your car or motorbike has to be insured by
a policy which will include third party cover.
If you had a box in the corner of your living room, in which once a month
when you lifted the lid you would find Yen 400,000, would you insure that
box against loss or damage? Of course the answer is yes, but what if the box
in question happened to be you, would you still insure it from damage or loss? The answer may be somewhat different.
The main type of assurance available to individuals has traditionally been
life assurance, which protects your family from financial hardship in the
event of your sudden death, this is very cost effective and provides peace of
mind.
There is a type of insurance that has been on the market now for about 10
years and is known as "Critical Illness" Insurance. This is a policy that
is designed to pay out a lump sum of money or an income, in the event of you
being diagnosed with a serious illness. This plan has seen rapid growth
in demand because you are four times more likely to suffer a critical illness,
than die before the age of 65. Nobody likes to think about death, and most of
us feel that we are Peter Pan and will live forever, but we all know
somebody who has suffered a serious illness such as cancer, heart attack, or
stroke to name the main three.
With constant breakthroughs and ever advancing medical science, it is highly
likely that anybody suffering a serious illness will survive and live to a ripe old
age. It would however, be an even older age if you had the financial ability
to support your family and yourself while you recovered from this illness.
Indeed, our lives and jobs are so stressful these days that you would have
the financial ability to decide whether you wanted to go back to the job that
contributed to your illness in the first place.
Most people use these plans to repay loans and mortgages and other commitments
in the event that they fall ill, and hence give them peace of mind while they
are convalescing.
So with all that said, what do these plans actually cover? Below is a list of
the illnesses that are covered under a typical scheme.
Accidental HIV
Alzheimer's Disease or Pre-Senile Dementia
Angioplasty
Aorta Graft Surgery
Benign Brain Tumour
Blindness
Cancer
Coma
Coronary Artery Bypass Surgery
Creutzfeldt-Jakobs Disease (including new variants)
Deafness
Heart Attack
Heart Valve Replacement or Repair
HIV Infection/AIDS via Blood Transfusion
Keyhole Heart Surgery
Kidney Failure
Loss of Independent Existence
Loss of Limbs
Loss of Speech
Major Organ Transplant
Motor Neurone Disease
Multiple Sclerosis
Paralysis/Paraplegia
Parkinson's Disease
Permanent Total Disability Benefit - any/suited occupation
Stroke
Terminal Illness Benefit
Third Degree Burns
As most of the plans on the market are offered by the International arms of
British Insurance companies, there are standard definitions for each illness
across every company. This is laid down by the A.B.I. (Association of British
Insurers). This protects the consumer as all insurers have the same definition
of what constitutes a particular illness.
Over the last 10 years or so, of the claims received by these Insurance companies,
95% of all claims have been for Cancer, Heart Attack and Stroke.
In summary, whether you have dependents or not, Critical Illness cover offers
very valuable benefits to protect you, your lifestyle and your family.
So, I ask the question again, would you insure that box?
Ivan Doherty
ipd@ifg-asia.com
Ivan Dohety MLIA (dip) is Chief Operating Officer of IFG Asia.
Part of The IFG Group PLC and registered with the Ministry
of Finance in Japan to give investment advice.
12/2001
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