We’ve probably heard the stats, 1 in 500 homes will suffer a house fire*; 1 in 3 people will be diagnosed with cancer. How many people do you know who had a loss from a house fire? How many people do you know who have battled cancer? I’m guessing the latter number is greater.
I’m not going to tell you it could happen to you. It won’t, you know it won’t. These things always happen to other people. That’s why this blog post is going to focus on why you need to make sure that everyone around you has insurance.
Think about it - nothing bad is going to happen to you. But you’ve seen the stats and read the news - bad things happen to good people. Other people. So don’t you want them to be protected? The paper is full of stories about unfortunate circumstances that put people in dire financial difficulty - often a community will rally together and pool some funds to help out a family that has lost their home to fire or primary breadwinner due to death or disability. Do you want to help out your neighbour/sister/brother/close friend when something happens? Of course you will, but is there a better way? There sure is - make sure everyone you care about has taken the time to protect the important things.
This means ask your family (siblings, parents, children) if they have coverage in place to take care of them financially if something goes wrong. Car insurance, house insurance (including tenant’s insurance if renting), life insurance, disability and critical illness insurance, travel insurance, a will. You think this is none of your business? It sure will be if they need it and don’t have it.
Let’s look at an example. Paul and Mary Robson are 60 and still paying off the mortgage on their Oak Bay home they moved to when the kids were in high school in the late 90s. Their debt isn’t much but neither is their retirement savings (nor do they have work pensions). They both still work so they can retire mortgage-free and hopefully with a little extra cash. They plan to downsize as it’s the only way they’ll be able to fund 25-30 years of retirement.
The Robsons have three children. Their eldest, Mike, is the only one completely self-sufficient. The other two are always needing help making ends meet as they have high student loans, periods of unemployment and one had a divorce that was a financial set-back.
Paul and Mary just gifted $5,000 to their middle child, Sarah, for her wedding in May. They are running on empty (cash-wise) and hoping they can take a trip somewhere warm in early 2013.
It’s a Tuesday in October and The Robsons are about to have a life-changing moment. Paul and Mary get a phone call from Mike: his two-year-old son Andrew -their grandson- has been diagnosed with Acute Lymphoblastic Leukemia (ALL). The last few months have been tough with wondering and testing and now their worst fear has come true. Treatments are to begin immediately - at BC Children’s Hospital in Vancouver. Panic has set in. Mike is beside himself. His wife and other two children (ages 4 and 6) are packing right now.
Paul and Mary are frozen. They get off the phone, hug each other and cry.
Over the next few days research is done and people are called. Childhood ALL has an almost 80% survival rate. Someone in Vancouver has a rental condo that is empty this month. A bank friend asks Mike if he has critical illness on his group plan that covers his spouse or children. He doesn’t. However, he remembers his parents getting some sort of coverage on their grandkids last year. He calls Paul and Mary and they call their financial advisor. It turns out that yes, The Robsons had gotten coverage on all three grandkids: Critical Illness Insurance, to be exact.
30 days after Andrew’s diagnosis, the paperwork is off. His condition qualifies under the definitions and The Robsons receive a cheque for $100,000. After trips to Vancouver on the ferry, food and accommodation in Vancouver, loss of income for Mike and his wife, childcare costs for the other kids while in Vancouver, medication (non-prescription) and comfort items for Andrew, the costs were staggering. Luckily, they were covered by the lump sum insurance payment and neither family needed to take on any extra debt. This was in part because Paul and Mary were able to use all their vacation time and Mary and Mike were both able to work out-of-office; friends and family helped out with childcare whenever possible, people dropped off meals both in Victoria and Vancouver and the accommodation in Vancouver hotels was off and on after the initial first phase of treatment.
The Robsons consider themselves extremely blessed. It’s January 2013 and Andrew is in remission and dealing with after-treatment care. Mike is a strong advocate for BC Children’s Hospital as well as critical illness insurance. He speaks to other parents all the time. He knows his story is one with a good outcome - both physically for Andrew and financially for the family. He cannot imagine the stress other families feel when their costs are not covered. His marriage was at the breaking point and money wasn’t even an issue (of course they kept an eye on the ever-mounting costs but it wasn’t debt they were accumulating).
I couldn’t write this post without crying - although the story above is fictional, this is based on real life and it happens. Take the time to help your loved ones realize the importance of covering their bases. It won’t happen to you, but it will happen to someone.
*2011 number of private dwellings divided by residential fires