Critical Illness Insurance

Copyright 2007 Financial Planning Resources, LLC.

Critical Illness Insurance

Because saving your life shouldn’t

cost your life savings


Peter G LangelierLangelier Insurance

Dr. Howard Rocket, DDS


DeathLost Wages Long-term Care

Health Costs

Despite Your Best Efforts . . . You may face a gap in your

financial security

Uncovered Expenses


What really happens in a health

crisis?• Medical care

Co-pays Deductibles Uncovered expenses Experimental drugs or treatments



crisis?• Economic Impact

Lost wages Routine expenses Additional household expenses Unmet financial goals



crisis?• Rehabilitation

Long-term care Physical therapy Psychotherapy Occupational therapy Home remodeling Personal help Adaptive equipment



crisis?• Almost half of all consumer

bankruptcies are due to medical expenses*

• 75 percent of those bankruptcies occurred even though the consumers had health insurance coverage!*

*Harvard Law School, 2005.


The High Cost of Getting Sick

• Average cost of a cancer diagnosis: $146,000 per patient*

Over 65% of cancer related expenses are indirect, and not covered by traditional insurance.*

*American Cancer Society, Cancer Facts & Figures, 2005


• Each year, about 5.5 million sufferers will survive a stroke, but many will have permanent disabilities*

*American Heart Association, Heart Disease and Stroke Statistics 2007 Update

Risk of Illness and Disability


Risk of Illness and Disability• Of the 15.8 million

Americans who will suffer a heart attack this year . . . 70 percent will survive*

*American Heart Association, Heart Disease and Stroke Statistics 2007 Update


• Of the 1.5 million Americans who will be diagnosed with cancer this year . . . 60 percent will live at least five more years.*

*American Cancer Society, Cancer Facts & Figures, 2005



Each year, over 25 million Americans survive a heart attack, stroke, or cancer.


*American Heart Association, “Heart Disease and Stroke Statistics,” 2007; American Cancer Society, “Facts and Figures 2007.”


A Real Case Study

• Dr. Howard Rocket

• Author, “A Stroke of Luck”


Where I went wrong . . .

• Cancelled my disability income insurance . . . A $2.8 million blunder.

• Didn’t have Critical Illness Insurance . . . A $710,000 mistake.

• Total net wealth reduction to date: $3.5 million and counting


Dr. Rocket: Stroke Case StudyIncurred Expenses for the Period of October 27, 1995 to April 2007

Description Amount

A) Renovations and Alterations to Home

Hospital Bed Wheelchair Cane Customized Ramp Alterations to Shower Transfer Bench Wall Grab Bar Toilet (raised) Dining/Kitchen Tables (raised to accommodate

wheelchair) Entrances to Rooms (widened to accommodate

wheelchair) AFO (Swedish-made leg brace: $1,500 plus additional

AFO at $500)

$180,000

B) Transportation and Vehicle Modifications

Taxi ($30/day for 18 months) Driver and car (50,000/year plus cost of larger vehicle

for 36 months) Canes story and WheelTrans vs. own van - TYPE A

personality

$ 8,100$290,000



Description Amount

D) Medical Necessities Prescriptions (ongoing and possibly increasing for the

rest of his life Dental (on going work estimated at $30,000) Glasses

$195,000

E) Incidentals Family Meals at Hospital Hospital Parking

$2,500$2,500

F) Post-Stroke Costs Post-stroke ongoing costs – miscellaneous items Dental costs – explain reason

$32,000



Description Amount

Total Incurred Expenses $710,000

Loss of Earned Income9 years (20k per month x 9 yrs)

$2,800,000Earned Active Income(Pre-accident earnings – average 30k/month)

$ 0Total Economic Loss NET WORTH

REDUCTION$3,510,100


Toward the Future

• With advancements in health care, more patients will survive . . . And associated costs will go up.


What’s the Solution?

• “Net Worth Reduction Plan” Deplete your savings and deplete

your retirement accounts Liquidate your estate Go into debt Bankrupt your family Go without necessary treatment

or care


A Better Solution . . .

• Critical Illness Insurance• Created 20 years ago by

Dr. Marius Barnard:

“Medical science can save lives, but it can't salvage lost bank balances. In other words, we'll keep you alive, but we won't provide the money to support you.”


Long available abroad:

• South Africa• United Kingdom• Canada• Australia• Japan• Now . . . the United

States


What Critical Illness Insurance Does

• Immediate pay-out upon confirmed diagnosis of a covered condition

• Absolutely no restriction on how funds used

• No impact on other benefits, such as health insurance, Medicare, etc.

• Benefits are income-tax free.


Do You Feel Lucky?• Out of every ten people

who reach age 65 . . .

• At least 7 will have experienced stroke, cancer, heart attack or some other covered condition.


Paying for Your Illness

For every dollar spent, you’ll need to earn:

Self-insurance $ 1.35

Debt $ 1.75

Liquidate assets $ 2.00

Critical illness insurance $0.20


So what will it be?

• Net-worth reductionOR• Critical Illness

Insurance


Peace of mind . . .

• Nothing can make a health crisis easy . . .

• But critical illness insurance can ease the way to recovery.


Life Insurance

Disability Insurance

Long-term Care

Insurance

Health Insurance

Because saving your life shouldn’t cost your

life savings

Critical Illness Insurance


Questions?

Critical Illness Insurance

Economy & Finance

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