Major Risks to Your Financial Security

Four headline newspaper reports in October compelled me to discuss the issue of whether or not you and your family should have health and trauma insurance.  If my comments help just one person from featuring in a newspaper due to their ill health and the financial hardship they are confronted with when trying to get the drugs they need to save their lives my investment in time to write this comment will have been worthwhile.

From a journalist’s perspective the reports are about seriously unwell individuals who cannot get funding for an expensive drug treatment programme.  From my perspective the report is about seriously unwell individuals who can’t get funding for drugs BUT who could have had they known about and chosen to have the right sort of insurance.  Children can’t make these choices so their parents need act for them.

Here I summarise the four published cases, discuss funding for medication in New Zealand, explain the differences between trauma and health insurance and finally urge you protect you and your family by ensuring you have the right cover.  The starting point is to consider this message and then contact me to discuss your options.  Don’t worry about the cost.  Have as much as you can afford.  Always some is better than none.  You can’t make a decision without knowing your options.

Report 1 - Stuff -19th October

Kelleigh Burkett, 44, wife and mother of three young daughters.  First diagnosed with breast cancer in 2010, now spread to her brain, liver and bones.  She was advised there are no more options for her in NZ but read about a clinical drug trial (Veliparib) in Sydney.  She travels to Sydney every three to six weeks for her treatment and will continue to do so until the medicine stops working.  Family and friends have raised more than $75,000 to pay for flights and accommodation.

My response:  The article says she wouldn’t have had the costs if the drugs were available in New Zealand.  This is misleading. The drug is in the trialling stage. If the trial is successful it may be publicly funded.  Pharmac will only fund drugs that have approved by Medsafe.  If they are terribly expensive they might not fund them.  While Veliparib may save some volunteers who are trialling it, it is likely to be several more years before it is approval by Medsafe (the organisation that approves which drugs that may be prescribed in NZ).

Would Kelleigh have benefited by having health insurance that covered non-Pharmac approved drugs?  No.  Lyfords recommends health insurance plans that will pay for non-Pharmac approved drugs but they must be still be approved by Medsafe.

What insurance would have helped Kelleigh?  Trauma cover.  If only she’d known about and chosen to have it.  Kelleigh would have been paid a lump sum and could have chosen to spend the money however she wanted to.

The cost?  $100,000 trauma cover ranges from $44 to $55 per month when comparing premiums with the major insurance companies.  $300,000 trauma cover ranges from $121 to $145 per month when comparing premiums with the major insurance companies.

Report 2 - NZ Herald - 21st October

Olivia Fryer, 23, diagnosed with a very rare cancer called succinate dehydrogenase-deficient renal cell carcinoma.  It is a rare side effect of an enzyme deficiency resulting in her body having no defence against tumours.  She now has tumours in her liver, a back muscle, nodes around her heart and other parts of her body.  Her oncologist recommended a drug called Sunitinib.  The cost: $9,000 every six weeks.  It is funded for people with different types of kidney cancer but not hers.  An application to Pharmac for funding was made three weeks prior to the NZ Herald article being published but they haven’t come back to her.

My response: It is cruel to keep Olivia waiting.  She is critically ill.  Her cancer is spreading aggressively.  Olivia wants to begin treatment.

I can imagine how she feels. On 6 December 2006 I was diagnosed with an aggressive cancer.  I had medical insurance.  The following week, 13 December, I had private surgery to remove the tumour.  My two major problems were choosing the surgeon and then the surgeon trying to book theatre time at one of the busiest times of the year.  Finance wasn’t an issue.  Around the same time two other women in Wellington had also been diagnosed with the same type, size and grade of cancer as me but were kept waiting for surgery until late in January 2007.  I have read that the probability of cancer spreading to another site is 1% per week.  Generally, the longer a tumour grows the more likely it will have entered the blood or lymph systems and spread.  Within a year of my diagnosis one of the other two women who had been diagnosed had died from her cancer. 

Treating cancer is urgent which is why I say it’s cruel to keep someone waiting.  It’s a terribly scary time.  I was 52 when diagnosed.  I’d already enjoyed and enriched life and readily accepted my diagnosis. If you accept the good things you may as well accept adversity as well.  There’s nothing you can do about it.  To be only 23 at the time of diagnosis?  I would be disappointed to put it moderately.

Not only did I have health insurance, so that my four surgical procedures relating to my cancer were performed at a time of my choosing by a surgeon I had chosen, but I also had trauma cover.  If I had needed any other treatment, anywhere in the world including the need to pay for an unfunded drug, I had the money to pay for it.  Trauma cover pays a lump sum.  There’s no way I needed to be featured in a newspaper article because I didn’t have the money to pay for my treatment.

Olivia may have never heard of trauma cover.  At her age I certainly hadn’t.  It’s not exactly a school subject.  Many adults haven’t heard of trauma insurance.  Most parents never imagine their children will need it.  We humans are generally optimists we survive because we don’t believe adverse events will happen to ourselves or our families.  It’s ironic because we know they do.

The cost? For a 23 year old female $100,000 trauma cover costs around $20 per month when comparing premiums with the major insurance companies.  $300,000 trauma cover ranges from $30 to $42 per month when comparing premiums with the major insurance companies. 

The cost of a coffee I’m a coffee addict.  Most mornings I purchase coffee from a caravan across the road from the office.  I buy one for Lucy and one for me - $10 per day - $50 per week.  That’s an extravagance but coffee addicts don’t seem to realise or care that small amounts of $5-$10 per day add up to around $2,250 per year.  I’m not the only one who buys coffee in the mornings. There’s always a small crowd of addicts standing around waiting for their fixes. It’s a nice social way to start the day.

Report 3 DomPost - 25th October

Kane Roper was diagnosed with Multiple Sclerosis when he was 25.  Today he’s 36 and wheel chair bound.  It is likely that he would benefit by having one treatment a year for two consecutive years of Alemtuzumab.  The cost of each treatment is $100,000.  The drug is funded in Australia.  His friend Rachel Drayton has set up a Givealittle page to help to raise the $200,000 he needs.

My response:  Kane and Olivia were both in their early 20’s when they were each diagnosed with serious, scary and tragic illnesses.  I have been an insurance adviser for 33 years.  I have never met a young person who contacted me asking for guidance to set up the right insurance programme to protect them in the event they suffer a serious illness or accident.  Young people just don’t know about the benefits of life insurance (includes; life, trauma, medical and income protection insurance).  Is it up to the parents of young people to encourage them to set up their own insurance programme?  Is it up to the parents to pay the premiums for their children’s insurance?  The majority of parents don’t know, understand, or want insurance for themselves let alone paying premiums for their children and yet if a child suffered a serious illness what is the parent going to say?  “I’m sorry Olivia, you know I have the money and could pay the $9,000 every six weeks you need to see if a drug will be effective on your cancer but if I do that I won’t have a decent retirement income so – sorry darling I can’t help”. Family will do anything they can to extend the life of a loved one even if it means becoming financially crippled themselves.  At these times the loss of life savings is irrelevant.

Report 4 DomPost - 31st October

Kirsty Webb, 45, mother of two young children ages 7 and 10, was diagnosed with terminal breast cancer in 2014.  She says she is not scared of death but terrified of leaving her kids.  She was advised that there was no more treatment available in NZ so she travelled to Germany for intensive hyperthermia treatment where the body is heated to 42 degrees Celsius while a dose of chemotherapy is administered.  Heat may damage the cancer cells making the chemotherapy more effective.  Kirsty became cancer free for more than a year.  It is back now; “in my skull, jaw, vertebrae, everywhere”.  Kirsty is going back to Germany where the treatment costs $2,500 per day.  Groups around the world are fundraising for her.

Each of my three children is insured.  If any one of them suffered a serious illness or accident I would be both financially and emotionally affected.  If I’m worrying about the health of my child I might not feel like working.  I might want time out to support my child.  You can’t claim on your income protection insurance if you are able to work. My children are adults.  When our children hurt we parents are financially and emotionally involved regardless of their ages. 

In summary; seriously consider having trauma and health insurance as well as life and income protection insurance.  Consider ensuring that your children will be able to get the money they need to pay for drugs without having to go on a waiting list for approval or going public in the hope of getting strangers to give a little.  If you think you cannot afford it remember that those who can least afford insurance are probably those who need it the most.

The first step

Call the office 04 471 0662 to arrange a telephone conversation with me.  From there we can either meet or I’ll prepare quotations comparing the major insurance companies and write a report explaining my recommendations.  This may be one of the best choices you have ever made.  Some insurance companies automatically include minimal levels of trauma cover for children on adult policies.  Additional insurance for a child on an adult’s policy can cost as little as $1 per month for every $10,000 of cover.  Think:  The first $10,000 is free and the next $90,000 is only $9 per month.  This example is for a baby.  The cost will increase each year with age.  It’s a good starting place though.