As an 80s kid, I remember a multivitamins commercial that had a very catchy tagline which says “Bawal Magkasakit.” The commercial highlights the importance of being fit and healthy every day because getting sick is costly.
Getting critically ill is costlier. The tagline is very apt for the Philippines’s health care system because the government simply cannot provide quality treatment for its people. The sad reality is that we are left on our own. And in a country where only a few can afford private healthcare, contracting a critical illness such as cancer and stroke could be a death sentence.
A research study revealed a glaring statistic: 95% of Filipinos will sacrifice their savings to treat a critical illness. When the savings have been completely depleted as they would most likely be, Filipinos will borrow money from friends, relatives, and even financial institutions just to continue the treatment.
The thing is, there are times when it is not us who are burdened by the expenses but, rather, our loved ones. I remember a former colleague who took out a P2 million loan to finance her mother’s cancer treatment. Despite earning a respectable income, she had no choice but to resort to borrowing because their savings were already depleted after the initial round of treatment.
Unfortunately, after fighting the cancer for so long, her mother still succumbed to it. It was triple jeopardy on my former colleague: her mother passed away, savings wiped out, and buried in debt.
Not wanting to burden her family in case the same thing happens to her, she took out a critical illness insurance as proof of the lesson.
What is Critical Illness insurance?
Critical illness insurance fills the gap Health Maintenance Organizations (HMOs) cannot fill. By providing a lump sum, the policy holder can let an individual afford medical treatment (or if there is no cure, then finance the last remaining items on the bucket list).
Furthermore, the benefit can also pay for succeeding recuperation aids, replace lost income due to illness, or even pay off any loan incurred during the treatment. After-care is equally as important as the treatment lest people forget—and equally costly.
When my father suffered a stroke several years back, it rendered him unable to walk properly. Thankfully, through therapy and medication, he fully recovered and now walks five kilometers a day for exercise (far more than what I do in a single day). However, his current maintenance medicine costs us several thousands of pesos a month; which will will continue on.
Given those benefits, critical illness insurance is a vital asset in one’s financial portfolio. The examples cited above clearly show how sickness can derail our financial goal. One’s retirement fund can be consumed to finance an illness.
Why should we get one?
However, despite having a low premium, people still find critical illness insurance worthless because it doesn’t earn any dividends or interests. They feel it is money down the drain. They’d rather invest in something that earns more. So let me ask this: Would you rather have critical illness insurance and not use it, or contract one just so you could claim the benefit? It’s the same with car insurance. Would you wish to crash your car just so you could file a claim?
If nothing happens to you, be grateful that you won’t experience the suffering others went through. But if it critical illness strikes, at least you have something to rely on.
What is worse than getting sick is getting sick with no money at all.
The sad reality, which many fail to see, is that it is our loved ones who suffer the most when we contract an illness. My colleague was the one who had to take care of her mother when her mother was still alive; and pay off the P2 million loan long after the mother passed. We will move on to the great beyond and leave the suffering, but our loved ones will still carry the burden.
Can you bear that thought?
Kendrick Chua is a Sun Life Financial Advisor and a Registered Financial Planner. He regularly writes for Rappler, Business Mirror and Money Sense. He is also a Chinese Language Instructor, TV host of CHInoy TV, a violinist and a freerunner-wannabe. He can be reached via email@example.com.
Image used under Creative Commons from Gaby Stein
Need help on planning your finances well?
The right person might be an advisor who can walk you through the steps of successful financial planning.
Don’t have an advisor yet? Email us at firstname.lastname@example.org.
Take an in-depth learning on personal finance, take the courses in the Brighter Life Institute here.