A MEANS TO PROTECT YOUR INCOME

“If I had my way I would write the word ‘Insure’ upon the door of every cottage and upon the blotting book of every public man, because I am convinced for sacrifices which are inconceivably small, families and estates can be protected against catastrophes which would otherwise smash them up forever. It is our duty to arrest the ghastly waste, not merely of human happiness, but of national health and strength, which follows when, through the death of the breadwinner, the frail boat in which the family are embarked, founders, and the women and children and the estates are left to struggle in the dark waters of a friendless world”   Sir Winston Churchill

Protecting yourself and your family against unforeseen circumstances is something everyone should consider. This could be protecting against premature death, providing for dependants or protecting against the loss of earnings due to serious critical illness or disability. In your life, you work hard to make sure those you love — spouse, children, and family members — are taken care of. It’s just as important to consider providing financial support for the future living costs of surviving dependents. You never know when you die. Dying suddenly — in an accident, by unexpected illness or even of natural causes — can happen at any time.

 Life insurance helps your loved ones pay the mortgage, bills, even college costs, replaces your income after you’re gone. Nothing can replace you in their hearts, but planning ahead with life insurance can make things easier for those you leave behind. After all, they will have to go on without you. Make sure they’re protected, too. No amount of money can ever replace a person. But more than anything, life insurance can help provide protection for the uncertainties in life.

Story of a friend- happy childhood, caring parents. He grew up playing, studying and celebrating the cherished moments. He graduated and the family celebrated in a grand style. Success came to him naturally. A good job was only a start - extra ordinary growth became a way of life. He got married. He and his wife made such a wonderful couple – made for each other. Soon the family was blessed with a child. A very happy family. And then in awful accident the man, the friend, the husband, the father was no more. Leaving his wife and child with no house, no money and no consolation for them. Would you still say that he has taken care of his family?

Many people believe that it won’t happen to them. They go behind other financial priorities and delay the decision to buy life insurance. If you really love your family, put your love decision into effect. The love decision is to ‘Provide and Protect’. Here you advocate with your heart not with your mind.

No one likes to imagine what life would be like, if they are suddenly unable to work due to a freak accident and become disable, or if they are diagnosed with a serious critical illness like heart attack, cancer, stroke, or kidney failure. When disability kicks in, a person can no longer work to earn money. The disability can last for a certain period or over a lifetime. If the one who is disabled is the head and bread winner of a family, without a steady income, the family’s financial well-being will suffer.

A disability is not selective – it can happen to anyone at any time. Anyone who has a job should get a disability insurance plan, to make sure you and your family will survive the financial pressures should the unfortunate happen. If disability suddenly stops you from being able to work, how would you earn an income? How long would you and your family survive without a pay cheque?

When a serious illness strikes it can have a devastating impact on almost every area of your life. Hence Critical Illness Insurance is the need of the time.

World Health Organisation’s report on Noncommunicable Diseases (NCD), updated on January 2015 – In the year 2012:

·        Noncommunicable diseases (NCDs) killed 38 million people.

·        7.4 million People died of Heart disease and more than 20 million people survived heart attacks; many required continuing and costly medical care.

·        8.2 million People died of Cancer and more than 15 million people survived cancer.

·        6.7 million People died of Stroke and more than 10 million people survived stroke, of these 40% experienced severe impairments requiring special care.

Despite having a world-class health-care infrastructure, an abundance of highly qualified medical specialists and a robust insurance system, the rising numbers of lifestyle diseases in the UAE are a cause for concern. About 70 per cent of the UAE population is obese and 19.3 per cent is diagnosed with diabetes. There is a large number of the population which is pre-diabetic and a sizeable number of people who are not even aware they have diabetes. Failure to recognise and act on symptoms by going in for regular medical screenings and affecting lifestyle changes is seriously compromising the health of the population. Physical inactivity, tension, stress, nutritional deficiency, consumption of processed food and caffeinated beverages, and tobacco use put the majority of the UAE population to the risk of Critical Illness.

Many incidents are impossible to protect ourselves against, but making provisions for financial implications is something we could all do. As the head of the family, you carry the responsibility to address areas that will have a direct impact on not only your physical, emotional and financial wellbeing but also your spouse and children.

Anyone between the age 18 and 60 should have a sufficient amount of critical illness cover to replace one’s income.

Sometimes medical insurance can be mistaken for critical illness cover, in fact they are separate and distinct products. Health insurance is renewed annually and the provider may refuse to cover you further if you have claimed payments for a critical illness in that policy year. Generally, Critical Illness cover pays out a predetermined amount of money in a lump sum on the confirmed diagnosis of any of the listed critical illnesses. The payout is not contingent on medical bills. Any medical cover you might have which pays for your hospital treatments does not affect this. 

There is little doubt that the diagnosis of a critical illness will potentially result in both the sufferer and his or her family enduring financial loss together with a physically and emotionally difficult period. The financial consequences of suffering a critical illness could be far more significant than the financial consequences of death, because the individual, will still incur costs much higher, but earnings are likely to be curtailed. Many people lost their entire wealth they have created in their life for the treatment of critical illnesses like cancer and kidney failure. Because in the matter of health you will never think of money, you will be ready to lose anything.

What most of us don’t fully consider are the financial costs for ourselves and our family of surviving, or continuing to suffer from, a critical illness. Protecting yourself and your loved ones is something you should consider because it may give you:

·        Funds when you need it – you may not be able to return to work and you will need money for your normal expenses.

·        Flexibility in spending – you may want to set money aside for your child’s education.

·        Clear your debts – you can pay off your mortgage and other liabilities.

·        Improved quality of life – you may need to make adjustments to your home or hire specialised carers.

·        Peace of mind – you know you and your family can continue with a comfortable lifestyle.

·        Preserve your assets – you don’t have to sell of your assets for future expenses or treatment. You can still leave an inheritance to your family.

Many international companies provide critical illness cover up to 1.25 million US Dollar for whole of life. This cover is generally attached to a life Insurance policy and is an optional benefit.

Critical illnesses in children are also a growing concern now. In UAE cases have been reported that a 6 year old girl and a 17 year old boy died of heart attack. Whole of life insurance policy with critical illness cover for children from age 0 is also available.

According to the 2014 survey conducted among the people with children in UAE, 50 per cent of Asian expats, 11 percent of Emirati nationals, 18 per cent for Arab expats and 45 percent of Western expats had life insurance coverage. What is most concerning about this survey is the finding that 60 per cent of people with children do not have life insurance.

The real fact is only less than 10 percent of the people are adequately covered by life insurance and less than 5 percent are adequately covered against critical illness and disability. A vast majority of the people are still under the risk.

Policies which cover life, critical illness and disability are available in the market. You can purchase these policies based on your requirement and budget. You can even buy a policy which cost you only AED 5 per day – the cost of a normal tea. So do not delay, do it today, because you do not know what will happen tomorrow.

Don’t predict your future, protect it.

Vijay Madhavan

Mobile: +971528322239, E-mail: [email protected]