Critical Illness

Does your family have a plan in place in the event that a family member becomes critically ill? What happens if you become ill and can't work. Worse yet, what happens if your child becomes critically ill? Could you afford to take a leave of absence to be with them in their time of need?

Be Prepared

Most people assume that they will manage just fine due to disability insurance through their place of work or private coverage. However, there may be some things they have not anticipated. Have you thought about the following?

Unexpected Expenses

Will you be able to cover your expenses if you become critically ill? Disability insurance replaces a limited percentage of your pay while you’re unable to work. If your company pays the premiums for the insurance, you’ll have to pay tax on the proceeds.

Who will take care of you? Consider the cost of an additional caregiver if your spouse has a full-time job and cannot afford to take the time off to care for you.

Medical Expenses

Have you considered that the cost of some medications can be extremely high? Even if your health insurance pays 80%, when the full cost of a medication is $10,000 a month, you still have to come up with an extra $2,000 a month from your own funds.

You may also need to purchase extra supplements or medications that are not covered by insurance. Although you can claim some of them on your income tax and benefit return, you will recover only a fraction of the cost.

Other medical expenses that come up could include:

  • In some instances, there are long waiting lists for treatment. Do you have sufficient funds to afford treatments that may be available without a long wait (such as the Mayo Clinic in the U.S.)?

  • Most critical illness plans also offer access to “Best Doctors” or similar services, whereby you can receive a second opinion on your illness from a physician that specializes in the respective area of medicine.

Taking Care of Business

If you are waylaid by illness, who will be responsible for taking care of all of your financial matters, such as paying bills and managing investments? Could a spouse or friend jump in and take this responsibility over? Do they know where all the paperwork is kept? Do they know how the bills are paid (that is, automatically by credit card, straight from the bank account or by cheque every time)? Do they even have the time to do this with everything else that’s going on?

Power of Attorney for Property

Do you have a "power of attorney for property" document? If all your bank and investment accounts are in your name, your spouse or other family member won’t be able to deal with your accounts unless you have named the person as the power of attorney for property. This is the last thing you (or they) need to deal with at this critical time.

Take Action

All of this information may sound scary, but there is a solution. Make sure you have a critical illness plan in place for you and your family. It should include how you will deal with both financial and family matters. Consider taking the following steps:

  • Review your disability insurance coverage, both the amount and terms of coverage. Purchase additional disability insurance or critical illness insurance if your current coverage is inadequate.
  • Prepare a will and powers of attorney for property and healthcare.
  • Make sure you keep all your financial and estate planning documents in one location.
  • Keep a list of all your regular bills and how they’re paid.
  • Make a list of family members and friends who can help out with errands, cook nutritious meals for you and drive carpool if necessary.
  • Both you and your spouse (or other family member) should know where all these documents are stored. If you’re single, let one of your family members know where you keep them.
  • If you’re currently the primary caregiver for a family member, write out a plan B in the event that someone else has to take over for you.
  • Last, but not least, contact your financial advisor to help you ensure that all your bases are covered.

Hopefully, you’ll never have to put your critical illness plan into action, but in the event that you do, you’ll be very happy that you have one.