Recently I talked about the problems that arise when someone becomes ill unexpectedly. Less money coming in and more expenses. Insurance can help with both and that sometimes helps healing too.
The question came up, “What about children who become ill and parents have to take time away from work to care for them?”
Obviously income replacement insurance is out, but child critical illness insurance is available. Coverage is available from $25,000 to a maximum of $250,000 and comes with a level premium to age 25 when it can convert to adult product.
The plan covers 24 different serious conditions. Some are childhood related. Type 1 diabetes, muscular dystrophy, cystic fibrosis and congenital heart defect appear there. Life threatening cancer, heart attack, and stroke are covered of course.
As with all disability insurance policies, it is a contract of definitions. You should ask for the definitions. Diseases are pretty specific in the contract but from experience it is not just a way to deny claims. I know a case that the client applied for a payment based on a certain result. The company replied that what he had claimed was not a covered condition but if his doctor could supply certain additional information it may fall under a different condition that was covered. They did and the company paid $100,000.
The purpose is to make sure the money to help is available without straining the family past the financial breaking point. There are always expenses no one thought about and there may be treatments available that are not covered under existing benefit or government plans.
Other plan benefits presently include “Best Doctors”a referral service to top physicians and counseling and support services through Shepell.FGI to help cope with new circumstances.
Of course there is a price to pay. The amount varies a little by gender, age and amount of coverage. For a 7-year-old boy, a good estimate of annual premium would be $50 plus $2 per thousand of coverage annually. A little more if you buy less than $100,000 and a little less at $250,000.
Critical illness insurance is fussy product. Underwriting is more stringent for this than it is for life insurance, especially given that it is convertible later. Family history matters.
Good planning includes building options. Insurance is an option that you hope to never need, but if you do need it, the money will be crucial. Coping with seriously ill little ones is hard enough and deleting financial worries is a big assist.
Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.
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