Do Your Patients Have The Right Life Insurance Cover?


Working in healthcare frequently requires you to have a working knowledge of more than just the medical basics. Whether you’re a doctor, a nurse, a surgeon, or you work in a pharmacy, people will come to you with questions that have no obvious connection to your job and expect you to know the answers. Often, those questions will relate to life insurance. Patients trust you with their lives, and so they also trust you to know how they should go about protecting their lives from a financial point of view. 

In reality, the best thing to do with those patients is to refer them to a qualified financial adviser and tell them that having something is generally better than having nothing. The number of American citizens who have no form of life insurance whatsoever is worrying, and last year uninsured citizens increased as a percentage of adults for the first time in years. Having good life and health insurance can be the difference between being able to pay for cremation, funerals and health care or being unable to do so, and so the majority of people should be encouraged to consider their options.

If someone comes to you seeking advice on life insurance or wanting you to look over their paperwork, there are a few things you should be able to suggest or check for. Remember that insurers don’t really want to pay out at all – that’s not how they make their money – so being able to spot holes or clauses is a crucial skill. Taking out life insurance is like playing slot games. The only reason that online slots websites are able to make so much money is that customers lose more often than they win. That same online slots philosophy applies to insurers – they’re banking on the idea that the number of people who will take out a policy and never claim on it will remain higher than the number of people who claim. That’s why it’s essential that your patients understand what their cover does and doesn’t give them. Here’s what to keep an eye on. 

Terminal Illness Benefit

The most basic forms of life insurance only pay out when the holder of the policy has died. That means the policyholder will never see a penny from their policy – all the money will go to their estate after they’ve passed away. Death-only policies are a little outdated, and generally represent poor value for money. The better plans on the market will also include terminal illness benefit as standard. Terminal illness benefit (sometimes known as Accelerated Death Benefit) usually pays out when a policyholder has been diagnosed with a condition that’s expected to cause their death within twelve months of diagnosis. In this scenario, the money is paid to the policyholder upon their diagnosis, and they can therefore decide how that money should be used. They may simply want to pass it on to their family or settle their finances, but the money could also be used to pay for care or care equipment to make their final few months easier than they would otherwise be. 

Critical Illness Benefit

Many people fail to understand that critical illness benefit isn’t automatically included in life insurance, and even more people confuse critical illness benefit and terminal illness benefit. Terminal illness benefit only pays out to patients who are expected to die. Critical illness benefit pays out to customers who have a serious illness even if they go on to make a full recovery. A typical example would be someone who’s had a heart attack or a stroke or a serious form of cancer. Even if that person goes on to make a full recovery, they’ll still need extensive and expensive treatment, and they may be unable to work for a long time – if they’re ever able to go back to work at all. Critical illness benefit pays out on diagnosis of the condition, and again can be used to pay for treatment or to provide a lump sum to live on during the policy holder’s recovery. 

Fracture Cover

Not every health condition that keeps you away from work or affects your quality of life would qualify as a critical illness. Imagine you were in a car accident and broke both of your legs. Your critical illness cover wouldn’t pay out for the accident, but a policy with fracture cover would. Benefit amounts for fracture cover tend to be lower than life insurance or critical illness insurance payouts because a claimant generally only needs enough money to cover them through their recovery period, or enough money to pay for their specific treatment. A good fracture cover policy will pay for injuries to any bone in the body. Payouts tend to be higher the more important the bone is, and the more serious the injury is. 

Deferred Periods

Deferred periods on illness and fracture cover plans have to be studied carefully because they determine how soon a policyholder can put in a claim after a claimable event. Let’s think about the car accident scenario we described earlier again. A policy with a deferred period of zero would begin to pay out as soon as a claim is filed. A policy with a deferred period of three months couldn’t be claimed upon until three months after the date of the accident, leaving your patients to fend for themselves up until that point. Policies with long deferred periods are always cheaper than policies with short deferred periods, because the longer the deferred period is, the less likely it is that a customer will be able to put in an acceptable claim. 

The key thing to remember is that policies can and do pay out so long as they’re drawn up correctly, and your patient’s key risks are covered. Someone who’s self-employed, for example, will likely need their illness cover to kick in a lot sooner than someone who’s in a full-time job where their employer will continue to pay them for a month or more while they’re off sick. Someone who has no health benefits through work at all is more likely to need critical illness cover than someone who does. As all of this is just broad and general information, it doesn’t take into account the specific needs of your patient. Hopefully, the contents of this article will help you to point them in the right direction, but they should still seek out the advice of a qualified financial professional before making any decisions about their protection.