By Zoran Dakovic
(WINDSOR, ON) – The purpose of my writing is to educate the public and share the knowledge on different topics that you may come across when working with your financial adviser. Today, I would like to introduce you to “Critical Illness” insurance, one of the grey areas when it comes to public awareness.
This type of insurance is often paired up with “Term Life Insurance” when making recommendations on how to protect your ability to generate an income, protect your mortgage, and keep your financial plan in tact.
I would like you to take couple minutes to really think about the set of questions below.
- Do you know anybody that has suffered a heart attack, stroke or was diagnosed with a cancer in the last 5 years?
- If so, how were their finances impacted by this unfortunate event?
- Did they have to take time off work to deal with this matter? For how long?
- Did they have to dip into their emergency savings or even worse, RRSP’s to pay for medical treatments and compensate for time off work?
- And last but not least, how did this affect their spouse and loved ones financially, let alone emotionally?
We are living in the world where news of serious health complications happen more often than we think. I’ve heard many of the senior advisers say how years ago, they would have to cut out newspaper articles which dealt with this topic and use them for presentations in dealing with prospects and clients. In today’s society, especially Windsor and Essex county, we are bound to come across, almost daily, some article that documents the misfortunes of our residents, next door neighbours, or even close family members. It happens every day. It’s a reality. Statistics Canada show us that:
- 38% of Canadian women and 44% of Canadian men will develop cancer during their lifetimes.
- It is estimated that there are over 70,000 heart attacks in Canada each year.
- Every 10 minutes, one person in Canada has a stroke.
Critical illness insurance protects the big three (heart attack, stroke, and cancer) along with 22 others, all of which can be found here.
Critical illness insurance offers help paying costs associated with life-altering illnesses. If you become sick with an illness covered by your policy, and survive the waiting period, you receive a lump sum cash payment. You alone decide how to spend the money.
Whether you want to spend the money on medical treatments, go on vacation, or relieve the financial burden of not being able to work, it is up to you.
Nobody plans on getting of these illnesses. It is an uncontrollable event. But you need to be informed enough to make the best decision for you and your family.
The benefit options start at $25,000 and go up to $2,500,000. This means that in case any of those illnesses strike you, at any point in your life, you can ensure you will be getting a cheque for the amount of coverage you have chosen.
My favourite part of all? There is a rider available when applying for this policy.
Within 15 years from the date of obtaining your policy, if nothing happens, you can get every penny that you paid into this policy back, tax-free. Also, if you don’t make a claim on this policy until the age of 75, when it expires, you can also get all your money back, and use it however you want; whether it’s dumping it into your retirement savings, going on vacation, or gifting it to your loved ones.
With the appropriate riders chosen, I like to think of Critical Illness insurance as a savings plan, where, just in case, you were to suffer an illness which almost 1 in 2 people are bound to experience, according to the statistics. You will be protected and receive a lump sum cash payment. You should never have to worry about your finances in such difficult times.
Zoran Dakovic is a financial advisor with Sun Life Financial. You may contact him at 519-739-7777 x2245 or by email.