The prospect of suffering from a serious health problem is something most people would rather not think about. But this kind of situation can also disrupt the lives of others with whom you have close ties or for whom you are responsible: your spouse, children, work colleagues and, in some cases, business partners, employees, clients…
Here’s a brief overview of the issue in five points.
First, there’s the stark reality of numbers: serious health problems, whether cancer, stroke, heart disease or other critical illnesses, are the rule, not the exception. For instance, some 2.6 million Canadians are living with a diagnosed heart ailment, and almost a quarter of a million Canadians are diagnosed with cancer every year. Even more striking, it is estimated that about 50% of Canadians will develop cancer at some point in their lives. Fortunately, three-quarters of them will survive their ordeal. Nonetheless, it means that not only is a critical illness probable, but it’s also possible that the people affected might be coping with it for a long time to come.
2. Psychological consequences
Studies show that the uncertainty surrounding a critical illness can cause much psychological distress not only for the affected person, but also for their loved ones. More than half of family members show signs of psychological distress after a loved one is diagnosed, and their symptoms may go as far as depression. Frustration, anxiety and a sense of powerlessness can undermine a couple’s or household’s ability to function “normally” at work or school, to make good decisions and to maintain a healthy family dynamic.
3. Financial consequences
If the illness results in an inability to work for a certain amount of time, financial uncertainty may be added to the already substantial uncertainty caused by the illness itself. For example, according to the BC Medical Journal, the average hospital stay after a stroke is more than 16 days – and getting out of the hospital is often just the start of a long recovery period. If the patient has to be off work during this convalescence, the household’s financial well-being might suddenly rest entirely on the shoulders of the spouse, to say nothing of the additional expenses that might come with the need for specialized care; travel and accommodation to obtain this care if it’s not available locally; home modifications; or various kinds of support required by family members.
4. Business consequences
If you're in business, or if you're a key person in your company, critical illness is a business risk you'll definitely want to manage. Your absence, though temporary, could lead to doubts, or even departures, among your staff, customers and suppliers, and result in lower productivity, damage to your reputation and a significant loss of value for you and your partners.
5. Tools to help you cope
Not everyone who suffers a critical illness is faced with all of these consequences. In some cases, a family could actually grow through an ordeal like this, ending up with a stronger bond than ever, and with their financial situation more or less intact. It might be wise, however, to take steps so that in the event of misfortune, the strictly financial component wouldn’t undermine the chances of coming through relatively unscathed.
Critical illness insurance is one solution to consider. Unlike disability insurance (or “wage-loss insurance”), which usually pays out a replacement income until the person is able to return to work, critical illness insurance is designed to quickly provide some non-taxable capital. Following the diagnosis of a covered illness, the insurer would pay a specified lump sum, which could range from $10,000 to several million. In some cases, the insurer will also cover specific expenses, such as access to medical specialists and state-of-the-art medical resources. Lastly, note that some critical illness insurance policies can be structured to meet the particular needs of business owners.
Critical illness insurance can also be arranged in conjunction with life insurance. As well, some life insurance policies include clauses that waive premium payments if you become disabled, and even provide a lump sum payment in the event of a terminal diagnosis. You might want to review your own life insurance policy with this in mind.
Obviously, no insurance policy can protect against illness. Nonetheless, insurance can help to mitigate the financial consequences, and this can make a big difference in the face of adversity.
Your advisor can help you determine the type of policy best suited to your situation.
The following sources were used to prepare this article:
BC Medical Journal, “Critical illness: The financial impacts of your survival.”
Benefits by Design, “Critical Illness and Chronic Disease Statistics in Canada.”
Financial Insight, “Critical illness insurance: because trouble never comes alone”; “Critical illness insurance for businesses.”
Government of Canada, “Heart Disease in Canada.”
London Health Sciences Center, “How will children respond to critical illness?.”
National Library of Medicine, “Impact of Chronic Critical Illness on the Psychological Outcomes of Family Members.”
Ontario Stroke Network, “FACT SHEET: Stroke Statistics.”
PartnerMD, “What is Key Person Risk?.”