Critical Illnesses Hit Thrice!
When we have acquired our assets such as properties and shares, or built a successful business, we need to ensure that they are protected against financial crisis such as critical illnesses.
In critical illnesses, the risk is 3 folds
1) the immediate medical bill itself
2) the loss of income / value due to the sickness
3) cost of long term treatment, maintenance, health supplements and rehabilitation
Furthur notes
1) Medical bill
What is the average medical costs required for the common dreaded diseases such as the HSBC (Heart attack, Stroke, By-pass and Cancer)?
I have seen people spent RM50,000 on nose cancer and survive;
I have heard of people spent RM500,000 on a tooth cancer and did not.
It also depends on what is the level of medical service you expect?
Do you want private or government hospital? There is no right answer here. Based on the recent hospital admission I have handle, most people prefer to stay in single room, which is at least RM200/day in a private hospital. Mainly because it is much more comfortable and convenient for relatives to visit.
For a RM200/day room & board plan, it usually comes with medical bill coverage of RM100,000 per annum, and a lifetime limit of RM300,000. What happens if RM100,000 is not enough? Then the critical illnesses coverage payout from life insurance will used to pay the bill. If this is also not enough, their recourse is to go to the semi government hospital (HUKM) or GH.
2) Household expenses and other financial commitments
When major illnesses strikes, usually will take at least 2 to 3 years to recover. During this period, living expenses will continue to be incurred. The critical illnesses protection payout is used to finance such area as well.
A basis to calculate the coverage required is as follows: Yearly household expenses x Est. Number of years to recover = RM30,000 x 3 years = RM90,000
Another area that is usually overlooked is the loss of contribution from a key man in a business due to critical illnesses. The loss to the business can be very significant and came sometimes lead to closing down of the business. In order to protect the interest of the business owner the following are some of the basis used to calculate how much to insure :
a) the cost require to find / train a new person to take over the role
b) the value of the goodwill / business reputation of the key man. If he is not in the business the customers may not buy goods from the company. As such we need to put a value to the involvement of the key man. Usually the value is locked in by getting an insurance cover on the key man
3) Road to recovery
Some of the examples of long term treatments, maintenance and rehabilitation are :
a) Kidney dialysis and medication for kidney patients
b) Physiotherapy
c) Health supplements from reputable companies
d) Home nurse
It is sad to note that a patient’s life expectancy very much depends on his/her bank account. Very often we see entire family’s coffers kaput because of an illness. How true this will be, when love takes priority over money.