Sunday 6th January, 2008

 

Never too young for insurance

 
 
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My uncle had sponsored my trip to Canada back in the 70s, and that was when I met Santa for the first time. He was in front of his house in a snowy village in Eaton Centre, old and overweight. His longevity is surely the work of medicine. But who pays for that trip?

Days of old

In old age, the trips to the doctor are frequent and expensive, and health insurance coverage stops when you stop working. Our social insurance scheme doesn’t cover us in retirement. So how do you pay your health bills?

My nieces told me they left out cookies and milk for Santa, and Santa left them a “Thank You” note and toys. But Santa bought a gym pack and is working on his health. I take comfort in the fact that he’s still actively at work and maybe still has health insurance.

For those of us who must retire, when our employer-sponsored health plan comes to an end, we may still have recourse to a reduced package and/or individual health insurance.

Individual health insurance will run up to the age of 70 years typically. The best individual health plans also carry a fund value. This is cash that accumulates on the policy and that can be withdrawn form the policy.

The best withdrawal features are essentially withdrawals, and not loans on the cash surrender value of the policy. This allows the policy to continue in force after age 70, and allows the insured to withdraw money when his health coverage ends. This money does not have to be repaid.

The longer the duration of the policy the more money there will be to withdraw to pay your health bills. It’s a virtual win-win situation.

Such coverage is only expensive when you get past age 45, prior to that it is relatively inexpensive. So the best time to buy individual health insurance is when you start you first job.

Who gets what

For someone in their early 20s, $250 a month can get you critical illness coverage of some $300,000 as well as accumulate more than half a million dollars by age 60.

There is a difference between critical illness insurance and individual health insurance. Critical illness insurance covers only major medical conditions. It will cover trips to the doctor neither for cough and flu, belly ache, nor surgery such as hernia repair, or appendicitis.

But it will cover heart attack, stroke, coma, blindness, kidney failure, and about ten more major diseases.

It will not cover diabetes or high blood pressure. In certain circles, these are now being labelled as lifestyle diseases. Since it has been proven that serious adjustment to lifestyle can reduce the incidence of those two conditions, or even prevent their occurrence.

Diet and exercise are two critical elements in lifestyle adjustments.

Cookies are a good snack, but house after house, feasting on cookies and milk all night long cannot be good for Santa’s lifestyle adjustments.

Santa has the record for longevity I think, but now he’s investing in his own health.

Maybe next Christmas we can consider leaving Santa celery sticks, and ginger beer, with a pinch of brown sugar. Or is his good health based on all that fresh air that he breathes as he soars through the skies?