Insurance
A warehouse supervisor I worked with said something that stuck with me after his diagnosis. "The plan paid the hospital. Nobody paid me." He'd had a stroke, spent three weeks in the hospital, and came home to realize the hospital bill wasn't even the biggest problem he had.
Health insurance pays medical bills, hospital stays, surgery, tests, medication, up to a percentage and up to a limit. Most plans cover around 80 percent after a deductible, which means you're still covering the other 20 percent yourself, plus anything the plan simply doesn't reach, and every plan has a lifetime maximum it will never pay past.
Critical illness coverage is different. It has nothing to do with hospital bills. If you're diagnosed with something on the covered list, heart attack, stroke, cancer, kidney failure, paralysis, and a few others, it pays you a lump sum directly. Not the hospital. You. No receipts to hand in. No rules on what you spend it on.
His treatment for the stroke came to about $120,000 between the hospital stay, specialist visits, and rehab. His health plan covered 80 percent of that, roughly $96,000. He still had to find $24,000 out of pocket, and that's before anything else in his life kept moving.
Here's what the health plan never touched. He couldn't work for five months. His mortgage was still due every month. His car note didn't stop because he was in the hospital. His kids still needed lunch money and school fees paid. None of that shows up on a medical bill, so none of it gets covered no matter how good the health plan is.
His critical illness policy paid out $1,000,000 on diagnosis, and here's where it went. $24,000 covered the gap the health plan left behind. His wife had to cut her hours to help him get around and get to therapy appointments, so a portion covered someone coming in three times a week to assist instead, meaning she kept her own paycheck coming in. The stroke left him with mobility issues, so part of it went toward putting a ramp in at the front steps and modifying the bathroom, changes his health plan would never touch because they're not medical treatment, they're daily living. The rest covered five months of mortgage payments, his car loan, and household bills while he couldn't work, with enough left over that he didn't have to touch a cent of savings.
If you couldn't work for four or five months starting tomorrow, what happens to your mortgage, your car loan, your children's school fees, and who's going to help you get around if you can't do it alone? Your health plan isn't answering any of that. It was never built to.
A lot of working people assume health insurance is the whole plan. It covers the hospital, so it feels like enough. But the hospital bill and your regular life are two completely different problems, and only one of them is what your health plan actually pays for. The mortgage doesn't pause just because you're sick, and neither does the need for someone to help you while you recover.
The other place people get caught out is the size of the critical illness policy itself. I don't recommend going below $500,000 in coverage, since anything less rarely covers the full picture once you add up the medical gap, months of lost income, and everything else that keeps running at home. A good rule of thumb is five times your annual income, or a figure equal to your outstanding mortgage balance, whichever number is higher for your situation.
Real protection means having both, sized correctly. A health plan that covers the cost of treatment. A critical illness policy large enough to cover what's left of the medical bill, replace your income while you can't work, pay for help around the house if you need it, and handle whatever changes your home needs, not just a small amount that runs out in a few weeks. Together, that's the difference between surviving the diagnosis and surviving the diagnosis without losing everything else along with it.
If you've only ever looked at health insurance and never thought about what happens to your mortgage, your income, and your daily life while you're too sick to work, that's worth ten minutes of your time. Book a free consultation at daronjacobsfinancial.com and we'll look at what actually protects you.
Daron Jacobs, RFC, FSCP
Senior Financial Advisor
Daron Jacobs Financial Limited
Sagicor Life Insurance Trinidad and Tobago
1-868-759-8359
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