Family Income Security During a Child's Illness

I was recently talking to a friend I’ve known for years, when the discussion turned to a mutual acquaintance whose son was just diagnosed with cancer. Being parents, this hit home with both of us as we imagined how devastated we would be if any of our kids were to contract a life-threatening illness. I wondered aloud if our friend had a critical illness insurance policy on the boy. My friend seemed shocked that this would even cross my mind. “Why would you ever get insurance on your kids?” he asked me.

People generally don’t want to think about the possibility of their child becoming critically ill, but what if something does happen? Consider what you might want to be able to do:

• Take time off work to be with your child
• Pay for other treatment and care options
• Travel for advanced treatments
• Focus on your child’s recovery instead of financial concerns

Some of the features and optional benefits available include:

• A lump-sum benefit payment (of an amount predetermined by you at the time of application)
• Coverage for many critical conditions, as defined in the policy, such as life-threatening cancer, cerebral palsy, congenital heart disease, cystic fibrosis, muscular systrophy and type 1 diabetes mellitus
• Child critical illness insurance also helps protect your child’s insurability into their adult years - important since changes in your or your child’s health may affect the ability to obtain critical illness insurance later in life

I’m no longer surprised when people misunderstand the purpose of insurance. Few people still see the ”fiscal defense” role it plays in their own lives, much less how it can protect your family’s financial security in the event a child becomes disabled or critically ill.

If you are like most people, you may have thought one or more of the following things about childhood critical illness insurance:

• We don’t need insurance for the kids because BC Med covers everything.

The purpose of having any insurance coverage for your children is not to pay immediate health expenses like the hospital visit, casts or medication, as we have public health insurance and many people have extended health benefits through an employer. However, BCMed does not provide for lost time at work for attending the doctor for treatment, travel to hospital, paying for family members to come stay with you to look after siblings (or hiring someone to do that) or waiting at your child’s bedside while they recover. The lump sum benefit from critical illness insurance can be used to cover parents’ expenses and lost work time.

• I have sick time at work I can use.

Many people are fortunate to work for an employer who provides a set number of days each year to allow employees to stay home to fight the flu and another set number of days for vacation. While some employers may be flexible in applying these days for the purposes of taking care of a sick child, the number is still limited to the amount it might take to recover from something minor, like the measles. As well, that income replacement is normally at 70 per cent of the standard wage or less. A diagnosis of Hodgkin’s lymphoma is likely to result in a rounds of hospital visits and treatments ranging from six months to more than a year that no employee benefits plan will cover.

• I have vacation days at work I can use.

Similar to the above response, most people have anywhere from 3 to 6 weeks of vacation, and maybe a little more if they have banked time. Despite the advances in medical technology, the successful treatment of brain tumor will likely keep a parent from working for months.

• My family can help us out.

Absolutely you can expect your family to help out, but will they help out to the point that you can be away from your job for an extended period of time? Do they have the financial resources to fund travel to the United States for cutting edge treatment or refitting your home with wheelchair ramps and bathroom modifications?

• We can work shifts so there is always someone available at home.

On the surface, this seems possible, as many families do that now. While one person is working, one person is home with the kids, and goes off to work when the other person comes home. And somewhere in there somebody sleeps. But if you ask where in that equation one person is supposed to spend six hours at the hospital three days a week while a child undergoes dialysis treatment, something else has to give: sleep, work or time at home.

• Our hockey/baseball/church/Rotary/other community group will help out with fund raising.

I am always moved by the community spirit I see helping out a family whenever a child we know falls ill. From bottle drives, coupon book sales and special “fundraiser” nights at local establishments, people go to great lengths to help out a family in need. These events also serve to help the community by giving them something to do, a feeling of contributing at a time when they may feel helpless in the face of a disease.

However, counting on having community involvement as a way to fund your child’s medical treatment is like expecting your neighbours to help rebuild your home after a fire because you didn’t have house insurance. I know I would rather deal with helping my child recover in at home, rather than have her become the face of a charity cause. Critical Illness insurance can help provide families with a greater measure of financial independence.

Considering the relatively low cost of child critical illness insurance it is one of the best forms of family financial security protection available. Talk to a professional financial security advisor about how critical illness insurance can provide a source of funds and support at a critical time in your family’s life.