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Dread Disease
Sunday, February 1, 2004
The costs of living

Several decades ago most people died or were disabled following cancer, a heart attack, a stroke or a bypass. Nowadays the chances of survival are far higher - but the financial implications can be devastating, says Dr Marius Barnard.

The costs of surviving a critical illness include lifestyle adjustments for patients who need to adapt their home, pay recuperation bills, or employ a senior partner to run their business.
Advances in modern medicine have made critical illness insurance, also known as trauma insurance, the fastest growing risk product in the world. Over ten million policies are sold annually worldwide, with six million a year sold in Japan and one million a year in England.
Dr Barnard was the first to develop the concept 20 years ago, with Crusader Life in South Africa.
The average critical illness policyholder claimant is only 41 years old when he or she has a heart attack, stroke, or cancer. And patients now have a 50% chance of living 13 years or longer after their first heart attack. About 70% survive a stroke, and 50% of people with cancer live five years or longer.
The normal average life expectancy of women is now 82 years and for men it is 76 years, and increasing all the time. Statistically this of course includes survivors of trauma, clearly indicating that they too have much higher retirement costs.
Life assurance covers the costs of dying too early; retirement benefits cover the costs of dying too long; while critical illness insurance covers the gap in financial strategy caused by unforeseen health traumas such as heart attacks, stroke, cancer and the costs of bypasses (initially), and later extended to include other conditions such as multiple sclerosis, kidney failure, transplants, Alzheimer’s and paralysis.
“You generally don’t die any more, you survive a critical illness,” comments Dr Barnard. “In 50 years of medicine I have seen the change from death due to disease to patients living because of treatment. This means an increasing need for insurance that is paid out on the diagnosis of a critical disease.”
A good financial adviser should have various trauma/critical illness products at his fingertips.

Copyright © Insurance Times and Investments® Vol:17.1 1st February, 2004
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