How 5 shekel could save you thousands
By Danny Newman, Branch Manager – Beit Shemesh,Goldfus Insurance
Case Study 1:
Baruch is 39 years old, father of 4 and husband to Sarah (38). Baruch is a successful self employed carpenter specialising in building kitchens. He earns approximately NIS 18,000 a month. Sarah is a teacher and earns NIS 6,000 a month. Baruch and Sarah recently purchased their home with their mortgage repayments costing NIS 4,800 a month.
One morning Baruch woke up with strong pains in his chest, shoulder and jaw. He was rushed to hospital and underwent emergency open heart bypass surgery. Due to the physical nature of his work, the doctors advised that he needs to rest for at least 2 months before considering returning to work.
While he has disability income insurance, he is aware that it will only go into effect after 3 months. As a result his monthly income is virtually non existent. Baruch now has an added stress of how he is going to make ends meet as bills still need to be paid, food needs to be purchased and the mortgage payment needs dealing with.
Case study 2:
Merav is 28 years old married to Jonny (30). Merav is a part time receptionist at a local accounting firm earning NIS 4,750 a month and Jonny is an Occupational Therapist earning on average NIS 6,000 a month (depending on the number of hours he works). The rent on their Jerusalem apartment costs NIS 4,200 a month. They have 3 children, aged 5, 3 and 1 years old. Their second child, Avigail, was diagnosed with Leukemia 3 months ago.
Avigail is undergoing intensive treatment in Rambam Hospital in Haifa. Naturally, Merav and Jonny are alternating between Haifa and the other two children in Jerusalem. Merav is currently on unpaid leave and Jonny has needed to reduce his work hours significantly. As a result of the new financial challenge that they find themselves in, they have spent all their savings on rent alone, over the past few months.
The above two cases are based on true stories, with details changed to protect identities.
While the two families are in different financial situations, they both face similar challenges. In addition to coming to terms with a diagnosis of a critical illness, families can also suddenly find themselves in financial turmoil.
Is there a solution? Yes
What is it?
Most insurance providers offer relatively inexpensive policies called Critical Illness Cover (Bituach Machalot Kashot).
Critical illness cover is a plan which pays out a pre-determined lump sum upon diagnosis of a critical illness (according to the terms and conditions of each specific policy). The monies received can be used however the individual sees fit; rent, medical costs, Disneyland, the choice is yours.
The purpose of the insurance, however, remains the same; to alleviate any extra financial burden that the diagnosis of a critical illness poses on the family. The cost of critical illness cover is dependent on age. In our second case study, a policy only costing approximately NIS 5 a month would have provided Merav and Jonny with NIS 100,000 to support their family during this time of extra financial hardship.
Currently these policies are quite inexpensive, especially for children. The proportion of claims on critical illness policies is significantly higher than those for life insurance. While people recognise that life insurance is a “must have” policy for those with financial responsibilities, unfortunately many either neglect or are unaware of the implications of not having critical illness cover.
Critical illness insurance is an insurance that you cannot afford not to have.
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