Patricia Brooks, 58, has worked for herself for over 25 years, which means no sick days, no employment insurance. Pat could’ve bought critical illness insurance in 2008 when her LSM Insurance broker offered to sell it to her, but thanks to a price she thought was too expensive, she decided against it and now, five years later, she has a critical illness of her own and almost lost everything she had worked for.
“I was penny wise and pound foolish, as my British mother would have said,” says Pat.
Pat has been self-employed since age 27 as a physical brand strategist, creative director, and consultant. She has a long list of successful clients. 2009 was a big year and she did a ton of work.
“I was working nights, weekends, a lot of hours and I wasn’t able to take any time off, so by late 2009, I got pneumonia and I was really in bad shape,” she says.
But the next two years after that didn’t get any better, as she was hospitalized in both 2010 and 2011. In 2012, she still couldn’t fully recover and was hospitalized again before undergoing surgery. And since her business began and ended with her, she had to try and work through it all. Most of the time, it was impossible.
“By 2012 I thought, ‘I just can’t do this anymore. I can’t breathe, I can’t think, and I can’t work.’ I ended up having to downsize my house and pay off my line of credit that had been keeping me going. If I had critical illness insurance, I wouldn’t have had to do that. I would have also been able to work on my health without all of the stress and worry.”
True, critical illness provides a lump sum payment to any policyholder that is diagnosed with a qualifying critical illness that you can use for paying your mortgage or any other need you can think of during such a difficult time. Pat had a problem, though.
“They kept treating me for pneumonia and missed the the real diagnosis, so I didn’t get diagnosed with cystic fibrosis until I was an adult,” she says.
Unfortunately, had Pat bought that critical illness policy back in 2008, she wouldn’t have qualified for coverage anyway because adult onset cystic fibrosis is extremely rare. Most people with the disease don’t make it to their 30s — and it is not an approved illness on any adult critical illness policy available in Canada. Cystic fibrosis is covered only on children’s CI policies to a maximum age of 18, 21, or 25 — depending on the carrier.
All had seemed lost, but then in August of 2013, a breakthrough. Pat is one in about 100 Canadians with C.F. that has the G551D gene mutation, so she responds to Kalydeco, a revolutionary Health Canada–approved drug that fights the underlying cause of cystic fibrosis and halts the progression of the symptoms. Problem is, the drug costs $290,000 a year.
“Of course, if you have cystic fibrosis, you’ll always have lung scarring, but Kalydeco cures some of that scarring, even though you’ll never be the same person again,” says Pat.
She reports that since taking the drug, she has been feeling better and better with a lot of her energy returning and only mild exacerbations. The disease affects her lungs and sinuses. Since she was six years old, she has had 14 sinus operations, and at the time, doctors didn’t know why or what to do.
While she’s now renting out her basement to a tenant for some extra income, she’s just now getting back to work after a long layoff, with more of her focus directed at consulting.
“With the consulting, I can bill two to five hours and give clients ideas and strategies on how to strengthen their brand and they can either do it themselves or give it to their $30-an-hour tech person to implement,” says Pat.
“On my side, I don’t have the deadlines or the pressure of, say, a $20,000 budget, so I can meet with more people for a smaller amount of money without all the headaches and deadlines. It’s really helps smaller businesses that don’t have large budgets.”
As she enters the next phase of her life, she remains hopeful that she has finally turned a corner health-wise and can soon get back to doing what she loves. Now, her greatest challenge will be affording her Kalydeco regimen, which can often amount to $400 per pill.
“My husband retired from Canada Post and he has really great coverage from Great-West Life,” she says. “Great-West Life is paying 80% and the drug company is paying 20%.”
On the other hand, her 49-year-old sister’s drug coverage only provides for $4,000 a year, so she’s waiting for the government to step in and pay for her Kalydeco prescription. Had either one of them qualified for critical illness insurance, they would’ve been able to use the lump sum payment to help pay for their drugs and save their own money.
While Pat seems covered for the foreseeable future, her sister is on disability, which can replace her income instead of critical illness, depending on what definition of “disability” her policy falls under. If it is total disability, she will only receive coverage if she cannot work in any occupation.
If Pat ever needed disability insurance, on the other hand, she could still work as a consultant as long as she receives partial disability coverage under the “Own Occupation” designation — since right now, she is still working as a brand consultant, but not a brand creator.
With partial disability coverage under an “Own Occupation” definition, she can work and still receive coverage because that definition pays out as long as you’re not working in your own occupation.
If you like, under that definition, you can still work in another capacity, as Pat is already doing.
Partial disability insurance benefits are paid to an insured person who experienced a loss of time or duties as defined in their policy due to a partial disability, such as an injury that affects only one part of the body. The insured person will be eligible for a flat percentage of their monthly benefit, generally a maximum of 50%. The insured does not have to prove a loss of earnings to qualify for this benefit.
Residual disability benefits, which are less common, cover an insured person who experiences at least a 20% drop in earnings due to less than total disability. The monthly benefit amount is based on a percentage loss of income.
Not only are Pat and her sister very fortunate that they are two in 100 Canadians whose C.F. can be treated and possibly cured, but also that they have such a mild form of the defective gene, as most people with cystic fibrosis don’t live past their mid to late 30s. Of course, that doesn’t mean they’re completely out of the woods.
“As you age, it gets worse, but now that I have Kalydeco, it’s like I’ve literally hit the C.F. lottery,” Pat says.
Patricia is the owner of Brooks Creative Branding and Consulting www.brookscreative.ca, 905-213-0741.
Wow! Great article. It looks like she should have gotten disability insurance for this purpose! Unfortunately, small businesses take so much time and energy to run, their owners neglect themselves far too often.
Hi Saeed. That’s a great point. I think a lot of brokers also need to really fully understand and appreciate the need for disability and critical illness insurance.