Critical Illness Insurance Worth Considering
There was once a lawyer who asked me, “if my client gets sick, what happens?”
There was once a lawyer who asked me, “if my client gets sick, what happens?”
Then a certified financial planner said to me, “As analysts we spend time thinking about how to grow a person’s capital.” Then he asked, “who is looking after the man on the tractor – what planning is being done that reaches further than growing capital?”
I reflected on what the analyst and the lawyer had said and realized that critical illness is a key area that one should think about on the farm. Often farm families focus on doing what they need to do in order to operate the farm business. Not much time is spent thinking about what might happen if the farmer becomes sick and cannot work the farm. Usually, when someone becomes ill it is for a short period of time (a day or two).
If an unfortunate accident does occur, it may involve muscle damage or broken bones, and may result in longer recovery time of a few weeks or a few months. But what happens when a critical illness such as a heart attack, stroke, cancer or severe diabetes strikes? Is the farm family prepared for something like this and, if so, how will it cope, and how will the farm business survive?
If a farmer becomes critically ill, there are additional costs associated with being critically ill, such as cost of treatment, medications and travel-related expenses. There might be additional equipment needed for the home such as an elevator, a van with a lift, perhaps even a nurse who comes to the house. On top of all of this, the family may need to hire additional help in order to look after the farm business.
Experience has shown that there is an emotional cost to the ill and his or her family that is due to the inability to work. The cost of illness is real, measurable and damaging. The critically ill person should be spending time getting well instead of worrying about the day-to-day operations of the farm.
Critical illness coverage is a risk-management strategy that could make sense to you. A critical illness benefit is a lump-sum payment in the amount you apply for. You can also add to the coverage a rider that gives you a return on your premiums, provided you do not get sick during the period of time covered by the plan.
For example, if you pay for critical illness insurance for 15 years and you don’t become critically ill in that time, you can request all of your premiums that you paid during that time to be returned to you without interest. This return of premium is guaranteed as long as you do not become ill. In order to receive your premiums back at the end of the term, you would pay extra for the return of premium rider.
If you become critically ill, as soon as you receive the diagnosis and your doctor and insurance company agree on the diagnosis, you will be paid the full critical illness benefit. The insurance benefit is paid in full, regardless of the amount of time the farmer is away from working the farm. The insurance covers the illness, not the amount of time away from work.
The critical illness insurance covers the risk of becoming sick from the first day the monthly premiums are paid. As a farmer, you are probably wondering if critical illness insurance is worth the cost of the premium.
Here are the facts. The farmer who pays $2,000 a month for 15 years (for $1,000,000 in coverage) would have paid out $360,000 dollars. That sounds like a lot of money paid out for something that you don’t end up needing. Well, there are two pieces of good news: one – the farmer didn’t get sick – and two – the farmer can receive the full amount of his premiums should he or she wish to exercise this option.
With a product like this available, you need to ask yourself if it is wise to leave the family farm at risk for something that may or may not occur, especially when the premiums can be returned if there is no illness?
There are options available and different things that can be done; it’s just a matter of how much risk are you prepared to take. Critical illness coverage is rather uncommon for farmers, but given what is at stake, it might make sense to manage the risk.
If you would like more information about the topic, feel free to drop us an e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Then a certified financial planner said to me, “As analysts we spend time thinking about how to grow a person’s capital.” Then he asked, “who is looking after the man on the tractor – what planning is being done that reaches further than growing capital?”
I reflected on what the analyst and the lawyer had said and realized that critical illness is a key area that one should think about on the farm. Often farm families focus on doing what they need to do in order to operate the farm business. Not much time is spent thinking about what might happen if the farmer becomes sick and cannot work the farm. Usually, when someone becomes ill it is for a short period of time (a day or two).
If an unfortunate accident does occur, it may involve muscle damage or broken bones, and may result in longer recovery time of a few weeks or a few months. But what happens when a critical illness such as a heart attack, stroke, cancer or severe diabetes strikes? Is the farm family prepared for something like this and, if so, how will it cope, and how will the farm business survive?
If a farmer becomes critically ill, there are additional costs associated with being critically ill, such as cost of treatment, medications and travel-related expenses. There might be additional equipment needed for the home such as an elevator, a van with a lift, perhaps even a nurse who comes to the house. On top of all of this, the family may need to hire additional help in order to look after the farm business.
Experience has shown that there is an emotional cost to the ill and his or her family that is due to the inability to work. The cost of illness is real, measurable and damaging. The critically ill person should be spending time getting well instead of worrying about the day-to-day operations of the farm.
Critical illness coverage is a risk-management strategy that could make sense to you. A critical illness benefit is a lump-sum payment in the amount you apply for. You can also add to the coverage a rider that gives you a return on your premiums, provided you do not get sick during the period of time covered by the plan.
For example, if you pay for critical illness insurance for 15 years and you don’t become critically ill in that time, you can request all of your premiums that you paid during that time to be returned to you without interest. This return of premium is guaranteed as long as you do not become ill. In order to receive your premiums back at the end of the term, you would pay extra for the return of premium rider.
If you become critically ill, as soon as you receive the diagnosis and your doctor and insurance company agree on the diagnosis, you will be paid the full critical illness benefit. The insurance benefit is paid in full, regardless of the amount of time the farmer is away from working the farm. The insurance covers the illness, not the amount of time away from work.
The critical illness insurance covers the risk of becoming sick from the first day the monthly premiums are paid. As a farmer, you are probably wondering if critical illness insurance is worth the cost of the premium.
Here are the facts. The farmer who pays $2,000 a month for 15 years (for $1,000,000 in coverage) would have paid out $360,000 dollars. That sounds like a lot of money paid out for something that you don’t end up needing. Well, there are two pieces of good news: one – the farmer didn’t get sick – and two – the farmer can receive the full amount of his premiums should he or she wish to exercise this option.
With a product like this available, you need to ask yourself if it is wise to leave the family farm at risk for something that may or may not occur, especially when the premiums can be returned if there is no illness?
There are options available and different things that can be done; it’s just a matter of how much risk are you prepared to take. Critical illness coverage is rather uncommon for farmers, but given what is at stake, it might make sense to manage the risk.
If you would like more information about the topic, feel free to drop us an e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .