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Seudi (long term care) and Teunot Ishiyot (personal injury)

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legal warning

legal warning: The information here should not be understood legally as financial advice. If you believe anything on this site is in error, please contact me. I am always open to corrections, new ideas, and new opinions...

If I were to die tomorrow, my family would suffer financially; it is therefore imperative that I ensure that my salary could be replaced and my family could continue to live the kind of life we live today.  But if I were disabled, things would be much tougher.  Not only would my family have to replace my salary, but they would have to pay more to have someone take care of me.  This is where seudi insurance comes in.

A person becomes “seudi” (in need of long term care) in one of three ways:

1 – A person has a mental affliction (ie alzheimers)

2 – A person cannot control his or her ability to go to the bathroom, plus he or she cannot do one of the following five things: (a) eat and drink (b) get up and lay down (c) be mobile (d) shower and (e) dress and undress

3 – A person cannot do three of the following five things: (a) eat and drink (b) get up and lay down (c) be mobile (d) shower and (e) dress and undress

The insurance guarantees that if you qualify as seudi, you’ll get a certain amount of money (ie NIS 5,000) every month for 3 years, 5 years or life (FYI like disability insurance, this usually kicks in after a few months).  I personally do not understand why anyone would buy it for 3 or 5 years; if you’re disabled as outlined above, you need a caretaker for life.

Some of you are probably already saying “hey, don’t I have that from my Kupat Cholim?”  Well, yes and no.  Kupat Cholim offers its members to sign up for a collective policy with a different insurance company, which keeps the person insured for 5 years and insures the member in case of disability above for payments for 5 years (usually, as always, some exclusions apply).

The other option is to buy this insurance privately.  And here there are two options.  You can choose to buy it at a rate that will change every year (start out cheaper and pay more as you age) or buy it at a fixed rate (that only rises with the CPI, not due to your age).  The fixed rate also allows you to have a reserve amount set up, so if you stop paying in one day, you’ll still be covered, but not as much.  For example, if you’ve been paying in from ages 30 to 50 and then stop paying, but get injured at 51, you’ll still be covered, but instead of getting NIS 5,000 a month, you’d get NIS 4,000 (this is an example, not exact).

If you have the kupat cholim policy, you can buy a private policy that complements it.  For example, kupat cholim will pay you for 5 years; you can buy a policy that pays you every month for life after 5 years.

A similar insurance with very important differences is teunot ishiyot.

Teunot Ishiyot offers the insured a sum of money in the case of an accident.  There are five types:  K1: a certain amount of money for death from an accident (from an accident means within 12 months).  K2 allows for the sum in case of disability as well.  K3 gives a weekly amount for disability for up to 2 years.  K4 expands accident to include a particular list of sicknesses (ie cancer).  K5 expands the list to include all illnesses unless stated otherwise (ie all illnesses except Lou Gherig’s Disease.)

Personally, I don’t see why I’d need to insure myself in the case of an accident any more than in the case of any other kind of death.  Does my family suffer less financially if I drop dead than if I get hit by a car?  And the same goes for disability and sickness (I’ll get to the other kinds of health care soon for extenuating circumstances). 

Those who sell this will tell you that that this insurance offers you a big payoff in the case of an accident and illness, which you may like.  But insurance isn’t roulette; insurance is about covering you in the case of financial threat; you shouldn’t be playing it to hit the lottery as you, God forbid, get cancer.  There may be some cases when this is necessary, but your agent better have a very good reason specific to your case.

The primary advantage this insurance offers over others is that unlike seudi and disability, which generally carry a three month waiting period, this insurance kicks in after 7 days (14 if only K1 and K2).  So in short, if you have three months expenses on hand (which is an important goal), then you can save money and skip this insurance.  If not, then it may be worth to buy this insurance until you compile the money.

In summary, this insurance isn’t like health, life, disability or seudi.  This is the one kind where you really have to look with a good eye and ask yourself if you need this kind of coverage.  For many people, this coverage is superfluous and sold in place of seudi, which provides support the real support needed in the case of a long term disaster.  For others, particularly those without any savings, this may be helpful.


7 Comments

  1. Rivka says:

    What about insurance for personal injury accident that pays a sum after an accident not involving death? For example you get X shekels if you break a bone. When my husband broke his hand we had to hire help to pack before a big move. When my son broke his arm I had to take several days off of work that summer to take him to his orthopedist appointments and find alternative summer activities that did not involve getting wet. Both of these where very expensive and a little extra money could have helped. We know someone else who broke a leg and could not drive. For several weeks he had to take cab everywhere and it cost him a fortune.

    • jonnydegani says:

      Hi Rivka,
      While I understand the need to be insured in this case, if you keep a few months expenses on hand, that will take care of this as well. In the long run, keeping the reserves yourself and paying them from your own account in case of emergency will pay off. I personally do not have teunot ishiyot, but I have three months expenses on hand to take care of this. if I have an accident that causes me to empty out this account, I’d get teunot ishiyot only until i compiled the money again.

  2. Ze'ev says:

    So, for example, if one has 15,000 NIS of expenses each month, you’re saying that they should have 45,000 NIS put away in savings for an emergency situation (such as a person breaking their leg or the like and being temporarily unable to work?)

    In the event that someone doesn’t have that kind of savings set aside – most people I know don’t – then you would advocate having teunot ishiyot policies?

    • jonnydegani says:

      I am talking about expenses per month – not income. If you make 15,000, then after taxes we’re talking about something in the range of 10,000 or 11,000 a month
      I think it is a very worthwhile goal to have such savings set aside, and if you don’t have it, you should begin to build toward it – not only for this, but for a myriad of ways that murphy can affect your life. If you don’t have this, then I’d recommend getting trunot ishiyot.

  3. Ze'ev says:

    In the post you mentioned 5 different types of tuenot ishityot policies. I’m current signed up for 3 different ones – trying to cancel them. In the absence of savings, you’d suggest keeping only the teunot ishiyot policy with weekly payments and not the others? Some give one-off payments.

    • jonnydegani says:

      I corrected my comment above and want to add the following when think about canceling: For each item insurance ask yourself (1) what would I do without this policy if X happened? and (2) Is that a risk I am prepared to take?
      If it is – because you have the savings or are covered by another insurance – then you can cancel.
      For example, let’s say I have teunot ishiyot of 100,000 for death. I know that if I die, my wife gets 60% of my salary and my child would get 20% and that would be enough for them, so I’d get rid of this. If it were for let’s say breaking a bone and I had no savings, then I’d need it because my disability would only kick in after a few months. On the other hand, once I got NIS 24,000 – three months of expenses – I’d cancel it.
      Look at each policy one a time to decide what is right for you.

  4. […] prices for insurance plans, listed according to the breakdown I offered in my last 2 posts about seudi insurance and the different kinds of health insurance in […]

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