How critical is Critical illness insurance?
Sean McCormack, General Manager Insurance Advice Product & Bancassurance at MLC.
Changing careers is an important life milestone and is often a trigger for people to re-think their insurance needs.
As a rule we should re-evaluate our insurance needs with any changes to income or circumstance, and include in our evaluation questions like - what would I do if I suffered from a prolonged illness? Would I be able to adequately cover my expenses and associated medical costs? How much would I need?
The insurance type that covers you for these is known as Critical Illness insurance.
What is Critical Illness insurance?
Critical Illness insurance (CI) covers the insured person for a lump sum upon their diagnosis with an illness from a defined list, which may include cancer, coronary disease and diabetes.
This type of insurance provides financial relief from the additional expenses incurred following diagnosis with a critical illness, allowing those diagnosed to get on with what’s really important – getting well.
Research1 shows that living expenses during the time of critical illness can be about $80,000 a year, not including the cost of medical treatment and rehabilitation.
The shortfall in cover and, in many cases, absence of cover is concerning when looking at the prevalence of critical illnesses in Australia. Take for instance one of the more common critical illnesses, cancer.
It’s not something we like to think about but it’s important we consider the consequences; research in 2012 by the Cancer Council shows that one in two Australians will suffer cancer by age 85.
Despite this high prevalence, MLC’s research found only one in 10 people currently holds CI insurance.
Who should have CI?
Everyone should consider CI according to their needs and individual situation.
For families, the benefit of CI insurance is that it provides immediate relief should the primary income earner be diagnosed with a critical condition and need time off work for treatment. A circumstance which may otherwise require families to tap into their savings, have the secondary income earner return to work or increase hours, even remortgage or possibly sell the family home.
This is a very real concern for 57 per cent of Australians who responded to MLC’s research. They said they were extremely/very concerned about being able to pay bills should the main income earner be unable to work.
Also, MLC’s research found that of those who didn’t have CI insurance, the majority were aged between 25-34 years old (33 per cent) and not married (36 per cent).
A common misconception among the young, free and single, is that they don’t need CI insurance because they don’t have any dependents. This couldn’t be further from the truth.
For those that are young and or single, CI insurance provides continued financial independence should they fall ill through a lump sum payment enabling them to continue living an independent lifestyle while they recover.
Can I afford it?
MLC’s research found that almost half of those surveyed who didn’t have CI insurance (46 per cent), believed it was too expensive. The reality is that the cost of CI insurance can be as little as $3 per day, which is less than a cup of coffee.
Best Doctors service
MLC CI insurance also now includes Best Doctors®, the medical advice service with 50,000 specialists worldwide.
For more information please visit www.mlc.com.au/bestdoctorsonline
How can I get CI insurance?
To find out more about CI insurance including the Best Doctors service please contact our office on (03) 9832 0677.
1. University of Canberra’s National Centre for Social and Economic Modelling (NATSEM).
This article is published by MLC Limited (ABN 90 000 000 402, AFSL 230694), who has its registered office at 105-153 Miller Street, North Sydney NSW 2060. MLC Limited is a registered member of the National Australia Group of companies. Any advice in this communication has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on any advice in this communication, consider whether it is appropriate to your objectives, financial situation and needs. You should obtain a Product Disclosure Statement relating to MLC Critical Illness insurance issued by MLC Limited and consider it before making any decision about whether to acquire or continue to hold the product. A copy of the Product Disclosure Statement or other disclosure document is available upon request by phoning MLC Client Service Centre on 132 652 or on our website at mlc.com.au
Best Doctors isn’t insurance (including health insurance) and it doesn’t replace your relationship with your current doctor or medical specialist. MLC reserves the right to withdraw the service at any time or to change the terms on which the service is provided to customers. Copyright 1998-2011 Best Doctors. All Rights Reserved.