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Without CI coverage, could we become a burden?

Thursday, October 8, 2015

If we have a good H&S policy, why do we still have to get coverage against critical illnesses (CI)?

Well, if we should die quite quickly from these critical illnesses, then, that is the end of story for us.

What if we did not die and were left weakened? What if we were unable to work or if we should wish to seek alternative treatment? Could we become a burden to our family?

Having said this, depending on our circumstances, we might not need CI coverage for life. OK, some might still want it but that is something else.





Here is a recent conversation with a reader:


Reader:
My insurance agent told me he has max up his critical illness (CI) coverage in his whole life policy as he claimed we need money to cover sickness after 70 years old...

I told him hopefully I will be managing my finance so well that I should have at least 300K by then :) and shall I detect with sickness and I may just managed to stay for another 10 years.

Do you mind to develop a bit why you persuade your father to give up his whole life ? Don't you worry they may need the money if they are sick, especially during the golden year?








AK:
We buy insurance because we need to transfer risk. At 70, what kind of risk should my dad be transferring?

My dad has Medishield which will be upgraded to Medishield Life by end of the year, hopefully. So, he has H&S coverage and, really, that is all he needs.

In retirement, we should have developed some form of retirement funding so that we have regular income without having to work.


If we still needed CI coverage at 70 or older, I can only assume that it would be because we could not afford to stop working and still needed an earned income. That is depressing.






Buy what we need and not what the insurance agent wants us to buy.


Related posts:
1. Getting covered against critical illnesses.
2. Retiring before 60 is not a dream.
3. Consider terminating whole life insurance.

5 comments:

victorlsl1 said...

at older age, actually insurance is of limited use. what comes, come. acceptance is the best policy and being realistic

LetsGetRichTgt said...

Hi AK,

I was thinking about CI as well. Other than supplementing the loss of income, could the CI be useful to pay for medical bills? Bills may be one-off, but more likely, CI will cause recurring bills.

Especially if the CI bought is early CI, then it'll be very useful for bills.

Normal CI is useless. haha!

AK71 said...

Hi LGRT,

We could use the money for anything, really.

Actually, I bought normal CI. I don't think it is useless. For people who have some reserves to draw on and who might not require the payout as quickly, it is good enough and, of course, it is much cheaper.

What we need depends on our circumstances.

Ellaa William said...

Hi AK,

Your normal CI, does it cover 30 or 36 illnesses?

Regards,
Ellaa

AK71 said...

Hi Ellaa,

Started with 30 but I believe it is 36 now.

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