Bitcoin's priority scale is not more valuable when you experience health problems, selling Bitcoin for health costs is not too bad for me and even if you sell Bitcoin as a business support is far more productive because when the business is developing you can buy bitcoin with a much bigger amount. But there are other ways that can be taken, namely making financial scale to meet other needs, such as health, children's education costs and costs for businesses that have been prepared.
Sometimes the conditions for the need for money are not in the right conditions where the price of bitcoin has decreased, so selling the bitcoins that we have at that time will make a loss. Preparing needs that are used through savings is also needed as an option when we need money suddenly and don't need to sell bitcoin when facing conditions like that.
You've explained well about prioritization, but the main point is don't invest 100% in bitcoin if you don't have a spare budget yet. Of course this is a repeated explanation as some users keep blaming themselves and their bad decisions after selling bitcoin for so long.
Let's say you have 100k in USDT that you want to invest, so don't invest all your money in bitcoin because you need a reserve budget. 20% of that is a pretty good amount as a reserve budget, even if you don't have enough later you don't need to sell all your bitcoin to cover your expenses. About whether you must have it or not, it depends on yourself and your financial condition. If you have more assets as property that can be sold instead of selling bitcoin, then you may have other options to avoid selling at loss.