If you have an accident and become disabled so cannot work, or are diagnosed with a serious critical illness, … how will you survive financially?
How will you live? Who will take care of you?
Now, it’s self-evident that if your family relies on our income, then you need life insurance.
What’s not so obvious is the other types of financial protection that are available, and why you might need them
Have no dependents and think you don’t need insurance? Think again…
Why you almost certainly need Critical Illness Cover
People are living longer. The average lifespan of men and women is steadily increasing as a result of numerous factors - healthier lifestyles, nuturitional factors, and even simple genetics. Also, of course, the incredible advances in medical fields such as diagnostices, pharmaceticals, and surgical techniques amongst many others. Diseaes and conditions that two decades were a death sentence are now quite survivable.
But staying alive does not necessarily mean recovery or return to work. Often, quality of life is impaired. Recuperation might take an extended period of time. Or perhaps treatment needs to be ongoing. There may be a need for lifetime care. Either way, there is a significant chance that life won’t return to how it was before.
Statistically, we are much more likely to be affected by a so-called ‘dread disease’ and survive, than we are to die during our working life.
What happens if you have an accident, or acquire a medical condition, that means you cannot work?
If suddenly you found yourself needing to rely on the care of others around you, think about how that would affect your life, and theirs - both in practical terms and also financially.
Maybe you’re married and the main breadwinner - in that case, will your spouse need to go back out to work, to support things financially? Or perhaps your partner will need to stop work, to take care of you. And if you have children, how will they be affected?
Maybe you’re single, what then? Sometimes we all need to rely on a family network, parents, relatives. But what about the cost, the impact to the lives of our loved ones?
The purpose of critical illness cover is to ensure that if we fall victim to a serious accident or major medical condition, then we have resources to help with the financial burden of those around us whose lives are affected, as well as help fund the changes in our own circumstances such as a break in employment, relocation, etc.
Summary of key types of financial protection
Add-ons to basic life insurance include terminal illness, total and permanent disability, and critical illness. These are summarised below. For more details please read Essential considerations when choosing life insurance.
Life Insurance: pays your beneficiary a lump sum should you die during the period of cover.
Terminal Illness Cover: your life insurance pays out when you are diagnosed with a terminal illness, rather than when you die. Usually an option within a life insurance policy.
Total And Permanent Disability Insurance: insurance pays out when from illness or injury you become permanently unable to work in your own or any other occupation.
Critical Illness Cover: pays you a lump sum if you are diagnosed with one of a range of specified critical illnesses.
Income Protection Insurance: insurance pays a proportion of your monthly salary if you are temporarily unable to work because of illness or injury.