THURSDAY, MARCH 15, 2018
JIM: Did you know that October is critical insurance awareness month? I’ll bet most of you don’t even know what critical insurance is. It is one of the best kept secrets here in the United States; yet, outside our borders it has been one of the fastest growing and most bought types of insurance coverages that are being bough worldwide. What is this type of coverage? Joining us today to share his story is Darren Almer of Saskatchewan, Canada. Darren not only is an advisor that serves many clients in the areas of critical illness, he has also been the beneficiary of the benefits that are provided. What is unique about Darren’s story, being from Canada where they already have national healthcare, you would wonder why would this coverage even be important; so I’m really looking forward to the insight that Darren can share with us as we phase into national healthcare with Obamacare here in the United States. Welcome, Darren.
DARREN: Thanks, James. How are you today?
JIM: I am fantastic. Hey, I really appreciate you joining us, especially with October being critical illness awareness month. I think many people here in the United States don’t even know what critical illness insurance is. Maybe you could just start out by sharing with us, what is critical illness insurance?
DARREN: Critical illness insurance is a living benefits insurance program that in the event that you are diagnosed with one of the covered illnesses in the plan. Most plans will cover anywhere from 18 to 26 different critical illnesses. Critical illnesses covers such things as cancer, heart attack, stroke, multiple sclerosis, ALS; other things such as brain tumors, comas, paraplegia, quadriplegia, and on and on and on. Most of the programs will have almost like a shopping list of those. Here in Canada we call it steak night insurance, because whenever somebody suffers from a critical illness and they don’t have coverage you tend to have some type of a fundraiser to raise money for them and you often get invited to steak night; so this is sort anti-steak night insurance so that you have the dignity and control yourself versus your friends raising money to help your family out.
JIM: Now explain this. Here in the United States we just are in the process of going to a Federal type of health insurance and Canada has had government health insurance or access to insurance for everybody that’s been around for several decades now, I believe. Why would someone in Canada, if you already have your health covered, why do you need critical illness?
DARREN: In Canada our socialized healthcare system is constructed in such a way that in the event that you’re diagnosed with – let’s say for example in my particular instance – a cancer diagnosis. When I was admitted into the cancer center which is adjacent to the hospital, when you’re receiving treatments, when you’re in the hospital the expenses are covered; so when I went through chemo treatments, when I went through radiation treatments, and I had surgery the cost and the payments to the doctors were covered. I did not have to out of my own pocket mortgage my home or rely on anybody else to pay the doctors to treat me and/or pay for any of the medications while I was in the hospital. Critical illness insurance isn’t necessarily to always pay for just the healthcare itself. It’s also designed to pay for the intangibles. As an example, when I was diagnosed with my cancer my wife worked in the education system. During my treatment time she was able to take six to eight months off unpaid leave from her work because our critical illness benefit replaced her income. I had disability insurance from work, which replaced a good portion of my income, but the critical illness benefit allowed my wife to take time off so that she could be home with me during the treatments – because, trust me, it’s not the kind of thing you want to go through by yourself. One of the great things about critical illness insurance is that it is also available for children. In fact, I think the best plans out there are for children because in the event that one of my children were diagnosed with cancer, my disability insurance wouldn’t pay me to be at home to go to treatments with my children. I would hate to be having the conversation one morning with my wife deciding which one of the two of us gets to take my daughter or my son in for treatment. It gives you that piece of mind that you have more control over your time and things. The critical illness benefit also paid for a lot of other intangibles. I don’t know what it is like in the United States, but it’s $25 to $50 a day for parking at the hospital. There are meals in the hospital. Oftentimes there may be medications that are not covered by state health programs or by your health insurance. They may be prescribed to you and if you don’t have, in particular instance I was presented with the opportunity to take a brand new drug that was a little over $50 a pill. The alternative was a much less expensive pill but came with some very nasty side effects. Because of my critical illness insurance benefit I was able to take the better drugs. I was able to eliminate 99% of all the nausea that was associated typically with cancer treatments and have a better quality of life while I am going through all of my treatments. Critical illness benefits are not just pay for the treatment itself. It’s almost like an intangibles insurance. It pays for extra time off for family members. It paid for some childcare for our children when I was having to spend overnight in the hospital and days in the hospital after surgery so that my wife could spend time with me. We wouldn’t have to rely on the kindness of family members to be at home with our children, which of course family is always there; but it gave us the opportunity to have some paid care to look after things and it also gave us the ability to cover any extra little expenses that came up plus extra time away from work for both of us.
JIM: Those are some awesome points and I look at disability insurance. It helps replace your income but it doesn’t replace all the income. There are lots of clients that don’t even have the disability coverage and I’ve always heard it said what happens when you have a disability. Well, your income goes down and your expenses go up, even though you might have health insurance. There might be deductibles, copays, as you mentioned some drugs that aren’t fully covered. There are so many things. Here in the United States I know we have Ronald McDonald houses for families when they have a sick family member at some of the hospitals where people can stay for limited cost or no cost at all, and they’re always looking for donations for that; but they don’t have those facilities at every hospital and I can’t imagine some of the costs that might be incurred if there was a prolonged several month situation where family wanted to be close or they had to travel many miles away, maybe several hundred miles away, to go to a center of excellence that maybe it’s a cancer hospital, maybe it’s a heart hospital, or one of the specialty places to get more sophisticated treatment. The cost to the family, I don’t think you can even imagine it; and you’ve gone through it.
DARREN: Here in Canada we have Ronald McDonald house too. In fact, we just finished a major fundraising campaign here to double the size of it because of the obvious demand. I went through six weeks of radiation treatments, so every day for 12 minutes – only 12 minutes – I was subjected to barium radiation treatments to kill this demon inside of me. I’m lucky. I live three miles away from the cancer center, one of the top cancer centers in Canada; but every day I saw people in that waiting room that had driven anywhere from 150 to 200 miles every day, back and forth, for 15 minutes of treatment because it was less expensive to pay for the gas than to try and spend $100 a night at a hotel room, or the Ronald McDonald house was full, or the cancer care lodges didn’t have room for them. Here, you know, being in the Great White North, I took my treatments in January and February and some of those mornings when I got up to go for my treatment it was 30 below Fahrenheit. Now, imagine, getting up at 6 a.m. in the morning 30 below Fahrenheit, starting your vehicle up, driving for three hours to come in for a cancer treatment for 15 minutes and then turning around and going back and hoping that the weather stays good on your way in and on your way out. You’re absolutely right. It is all the extra things that really add up. Disability insurance – I’ve always looked at disability insurance as more of a cast or a Band-Aid. One of my colleagues always says that disability insurance will only pay you enough to get you back to work to kill your for the next time that you suffer a disability; because it just kind of bridges the gap barely. It is just enough to make you want to go back to work before you should because they want to get you off of disability. The nice thing about critical illness insurance is I’ve now taken the control out of the hands of the disability insurance company to say when I need to go back to work or not. You’re saying it’s time for me to go back. I feel like I need a couple extra months, even if it is just for the wellness of my family and for us to heal as a family, you can go off of disability and use this to replace your income. For all of your listening audience that are their own business owners. I know that as a business owner, what we report as income and what we pay tax on as income, doesn’t typically representative what we actually bring in as income. We’re able to write off vehicle expenses and mileage and meals and different things. What we actually whittle our income down to, to pay taxes on, isn’t necessarily what we live on. Well, disability income only replaces your reported income to the IRS. Imagine living on two-thirds of what you reported for income last year. That’s the max you can get from disability insurance. Whereas with critical illness insurance I know here in Canada our maximum benefit is $2,000,000.
JIM: Wow. That can make a huge difference. Hey, we have to take a short break. When we come back I want to talk to you a little bit more about the convenience of where you get treatment, so please stay tuned.
JIM: Welcome back as we continue to visit with Darren Almer (SP?). Darren is a critical illness insurance expert from two fronts. He helps advise clients about it, but he also has had a personal experience and that the critical illness was critical in his healing process as he battled, successfully, cancer a few years ago. Darren, I want to mention to you – I don’t know if it’s like this in Canada – but I just was reading a report here in the United States because we’ve gone to these health exchanges. With these health exchanges they would enroll different hospital groups and doctors and things like that, and I heard of a situation in the Chicago area where people were in the southern part of the Chicago area in the Illinois side, and those that were in the Indiana side, the way the hospital groups were, a lot of people went to doctors or hospitals just across the state line in their neighborhood. Now because of these new health exchanges the new doctors or specialists that they would have to go to are 150-200 miles away. You kind of talked about that with some of the people that you saw in the treatment center in the hospital that you were at where they had to travel sometimes hundreds of miles to get treatment. When we look at disability coverage and we look at health insurance, I know here in the United States there is no reimbursement for that and you have the same situation there in Canada, right?
DARREN: Absolutely. The key word in what you just said is reimbursement. I hate reimbursement plans. The last thing I want to do when I am going through cancer treatments, heart treatments, recovery from a stroke, dealing with MS or Lou Gehrig’s disease, or any of a myriad of the other covered illnesses, the last thing I want to be doing is sitting at home with paperwork filling out forms and asking for a reimbursement on something. The great thing about critical illness insurance is it is not a reimbursement plan. It is a lump-sum benefit. When you are diagnosed with one of the covered illnesses, you receive a check typically within 30 days of diagnosis. The check shows up. It’s a tax-free benefit and what you choose to do with it is entirely up to you. There is no additional paperwork. If you want to make modifications to your home because disease is going to be debilitating, you’re going to survive and your life will go on but you need to make some renovations to your home – fantastic. If you need to take extra time to travel to go for treatments, so be it. This will pay for airfare. This will pay for accommodations. This will pay for meals. It will pay for mileage. You choose. I’ve now taken the control for my diagnosis, my recovery, and from family and put it in my hands instead of a state legislator or a medical board somewhere that’s going to decide what they’re going to do. When you’re in the midst of that malaise there is nothing more important than control, because with control comes dignity and that is so important, is the ability to maintain dignity and control so that you choose where you’re going to receive the treatment, who is going to provide the treatment, and when you are going to get the treatment. I know that one of the great myths out there for your American audience is that here in Canada with healthcare being free, that’s just great. You just walk in and you get all this treatment and everything is free. The other side of that myth is what we call waiting lists. Sometimes waiting lists to get in for some of these cancer treatments and stuff can by anywhere from 30 days to 30 months. Even if it is just a slow growing metastasis inside of your body and the doctor says, well you know what, it’s not really growing that fast. We’re going to start treatment in three months, with the critical illness insurance benefit I can be on the phone. I can be looking in another city. I can be looking south of the border and say, alright, I’ve got the money. When can I start the treatment tomorrow?
JIM: That is an excellent point. I saw recently, this was back from the 1990s, a book that was written by some organization where they talked about the average waiting time for some of the treatments and I believe it was in Canada where waiting for bypass surgery was like a five-month average wait. I think to my father-in-law who found out on a Thursday he needed bypass, they said we could do it Friday or wait until after the weekend. I think us, as Americans, have become accustomed to almost like drive-through health service; just go through the drive-through, get it instantly, and you’re on your way. In other countries with national healthcare sometimes there is that waiting list or even a decision whether or not you’re going to get the treatment. I think that’s an important consideration. Darren, I know we’re getting toward the end here. I saw you speak at MDRT and it’s an international conference where people come from all over the world. You’re the second speaker I heard talk about critical illness from MDRT. The first one was Dr. Marius Bernard (SP?). He was the father if critical illness. He was the first successful artificial heart transplant and he talked about how all his patients that he had, and he is from South Africa, all these patients would survive physically but financially most of the families would end up being wiped out. He actually solicited with the insurance companies to come up with a product that can take care of this. You have a whole different passion with it because you didn’t just see it – you’ve lived it. Maybe share with people after having gone through this and you actually were your own best advisor in that you actually purchased and own what you sell, talk to the audience a little bit about would you have done things differently if you would have known then what you know now. Share some insight on your belief with critical illness.
DARREN: My biggest believe is that we tend to spend most of our health throughout our life trying to create our wealth, only to find out that when our health fails we typically don’t have enough wealth to buy back our health; and if we do have enough wealth to buy back our health, we don’t have enough health left to rebuild our wealth. Along that line, when I think back, I should have had more coverage. When I meet with my clients the gold standard has always been that we would like to replace at least one year of your net income if you have disability insurance coverage, so that basically gives you an additional year above what you would be getting from your disability coverage. If you didn’t, we recommended two times your net salary. What I discovered as an independent business owner is that having to take a year off of business to go through treatments and recover on my terms, it took me an additional two years on top of that to be able to rebuild my business to a point where it was right before I left. Although as a financial advisor we have a certain standard of what we thought was the right amount going forward, we’ve changed that a little bit so I would be very diligent in making the right recommendation. That right recommendation comes from always working within a professional financial advisor, having a good understanding of what your household budget and having a handle on your household expenses so that when life comes calling – and it’s not an if, it’s a when – when life comes calling, that you have the right money in place so that you can recover on your own terms. Having said that, Jim, I don’t think that any policy is too small. I’ve delivered a lot of policies for $25,000 to young families. It meant the difference between losing a vehicle or not because of lease payments and things like that, to medical professionals who have professional services corporations up here in Canada, two-three doctors where it is not unusual for them to have a $1,000,000 policy. If I took you out of your practice for a year, who is going to replace that income? Disability insurance will replace the income but there is business overhead. There are a lot of other things going on. I heard an advisor speak one time and I have his presentation, I refer to it quite often. He said, you know, if you’re going to take away a year of my life, if you’re going to take me to hell and back – somebody should pay for that! [LAUGHTER] No amount is too much, but there is no amount that is too little, either. The most important thing is that you meet with a professional, that you review the financial plan, that you have the coverage that is affordable to you because a little bit of something is way better than a whole bunch of nothing.
JIM: Yeah, I think too many people make that mistake that it’s all or nothing and as you well described, an extra $10,000 might be the difference, or $25,000. Just think about that. Your paycheck is gone. Maybe you’ve got disability coverage and you have a portion of that trickling back – any amount is going to be a godsend at that point.
JIM: Well, Darren, I really appreciate you sharing with us. You certainly have a unique perspective in that you are living what you’re advising on and you’re living proof of how important that coverage is and I think most people here in the United States don’t even know this exists, but I think they’re going to become much more aware of it as we go to national healthcare. The other thing is I look at with your circumstance as having that perspective being from Canada; so we got a chance to look in the future by visiting with you today and I certainly appreciate you taking the time.
DARREN: Well, thanks for the opportunity and I look forward to seeing you next year in New Orleans at the next MDRT conference.
JIM: Sounds great. Thanks, Darren.
Thanks for joining us this week and tune in again next week as we explore another phase of the Real Wealth process; and remember, if anything you heard in today’s show you’d like to get more information about, contact us. Also, if you feel that any of this information will be helpful to a friend or family member, feel free to forward them a link!
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