To complete our two-part mini series on investing in Health Insurance in Israel, this month we are talking about one of the most important parts of Health Insurance from a financial planning point of view - Critical Illness insurance (Bituach Machalot Kashot) .
The logic behind this insurance is to provide a one-off sum of money to cover the costs and financial shortfalls that come about when someone in the family is diagnosed with a “critical illness”. These additional costs can be related to the treatment of the illness directly, as well as lots of “indirect costs” such as needing extra help at home, additional medical devices, costs of frequent hospital visits, and most importantly the loss of income that often occurs in such a situation.
Put simply, the way this insurance works, is that if God forbid one is diagnosed with one of the “critical illnesses” that appear on the policy list, the insurance company pays out a lump sum to the policy holder. One can usually choose a payout of anywhere between 50,000 – 600,000 Shekel per insurance company.
This takes on even more importance when unfortunately it is a child who is diagnosed, as one of the parents will usually have to stop working, leading to a loss of income, and since it isn’t the parent who is unwell, their Disability insurance will not kick in to cover part of this income loss.
Where do people normally look to cover these costs from if they can? Their assets and their hard-earned savings. This is what Critical Illness insurance, in our view, is there to protect.
So here are 5 important things you need to know about Critical Illness insurance in Israel:
1. As opposed to most other Health Insurance policies, which cover costs incurred, or costs for certain treatments and procedures, Critical Illness insurance pays you out the insured amount, whatever you plan to use it for. In this sense it is more similar to life insurance.
2. Roughly 60% of claims on this insurance are for cancer, and indeed there is a cheaper cancer-only version of this insurance
3. Most companies will have at least 32 different illnesses on the list, with 41 being the highest number at the moment
4. One can often claim 2 or 3 times for different illnesses
5. It is extremely cheap to take out for children – it can be as low as 6-8 Shekel per month
A definite tool to be considered when planning your family’s finances, click here to contact us and learn more, or to get a quote for critical illness insurance in Israel.