Singing the praises of critical-illness insurance

I read with interest the article “Advisers debate efficacy of critical-illness insurance” that appeared in the Sept. 22 issue.

The comment, “You might never collect on your cancer insurance, and you won’t be covered on the things that can go wrong,” made by Ed Stuart, a certified financial planner and wealth manager at Regent-Atlantic Capital LLC of Chatham, N.J., completely missed the mark.

Modern medicine has entirely changed the rules of the game.

Today we survive cancers, strokes and heart attacks at unprecedented rates.

Most people typically think of health care only in terms of direct medical costs, such as doctors, hospitals, surgeries, co-payments, deductibles, etc. But a recent study from Harvard University in Cambridge, Mass., showed that the average direct medical costs for a cancer patient averaged $35,878 in 2001 for bankruptcy filers.

The study reported that half of all bankruptcies are due to critical illness and medical bills.

Non-medical costs can often exceed treatment costs, and they aren’t covered by health insurance.

When we get sick and can’t work, our income stops, and our expenses skyrocket. We go from being an asset to our families to a liability.

Heart attack, stroke, cancer and other covered conditions are often followed by a prolonged period of recovery. Heart attack, stoke and cancer make up 76% to 90% of all critical-illness insurance-paid claims, depending on the carrier and the country.

Almost all critical-illness policies available in the United States cover heart attack, stroke and cancer. Some companies, depending on the state, cover up to 21 illnesses, including heart attack, stroke and cancer.

The Family Leave Act provides only for time away; it doesn’t compel the employer to continue to pay the healthy employee caregiver. The healthy spouse or caregiver isn’t sick or disabled; the patient is.

Mr. Stuart is operating from an old and outdated paradigm. We are in a new century, which requires new thinking.

I encourage him to attend a National Cancer Survivors Day (a service of the National Cancer Survivors Day Foundation Inc. of Franklin, Tenn.) and a local-chapter meeting of The Mended Hearts Inc. of Dallas. Ask a cancer survivor, a heart attack patient and a stroke victim if a large sum of tax-free cash paid upon their diagnosis would have made a difference in their lives and the lives of their families.

Thomas J. Lawton
Managing director
Critical Illness Insurance Advisors
Poughkeepsie, N.Y.

Seeking information on IRA rollovers

I found Ed Slott’s Sept. 4 IN-Retirement column “Safeguarding IRAs in difficult times,” which appeared on InvestmentNews.com, to be very informative.

Could you please clarify for me a question I have regarding the one-per-year individual retirement account rollover limitation?

If someone has three certificates of deposit within an IRA plan in Bank A and wants to roll over one of the CDs to Bank B, does that preclude the rollover of a second CD within the same plan for a year? In other words, does the limitation relate to the plan or to individual instruments, such as CDs, within the plan?

Jerry Derstein
Staff accountant
Presidio Networked Solutions
Conshohocken, Pa.

Response from Mr. Slott: The rollover of any part of an IRA taints the entire IRA. If just one CD is rolled in or out of that IRA, no other distributions from that IRA are eligible for rollover for 12 months from the last rollover of funds in or out of that IRA.

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