Disability and Critical Illness Insurance: What Do You Need to Protect Your Family?

Have you ever considered what would happen to you and your family if your couldn’t work and make an income?

Have you ever thought “What if I was diagnosed with a critical illness? An illness that will debilitate and stop me from being able to cover my fair share of the bills? My family would be left scrambling while we accrued debts.”

Or, “What if I was unable to work because of a disability?” Disability is a vague term- often people think of a wheelchair, or some form of physical impairment. “I’m young, I’m healthy-that won’t happen to me because everyone in my family is healthy.” With good family genetics, you certainly stand a much better chance of avoiding illnesses, but what about accidents? Most people don’t consider those. A car crash, not by your own fault, or a slip on ice as you shovel your driveway at 6:00 in the morning.

It’s obvious that your work here isn’t done. You’ve got another step in making sure you’re fully protected.

There are two types of important insurance you may be missing

Disability insurance, essentially pay cheque insurance, protects your income in the event of an injury or illness that inhibits you from working and collecting your income. There are many ways to structure a disability plan, and it depends on what you’re concerned with. Covering your debts for 2 years, 5 years, or up until you planned to retire at 65. Do you have three months worth of salary set aside for any unexpected expenses? You can have your disability benefit pay out in as little as 30 days from your accident. Or you could stretch it to 60 days, 90 days, or even 120 days. It all depends on your personal situation, but in almost all cases we can all agree that we wouldn’t be able to sustain indefinitely without some financial help.

Critical illness insurance is a lump sum, tax-free benefit that is paid to you if you are to become diagnosed with a critical illness (heart attack, cancer, stroke etc). Generally, the benefit is paid out 30 days after your diagnosis. You decide how to use these funds- i.e. a spouse taking time off work to help with your medical needs, a great family trip to remember forever, additional medical attention not covered by the government. You can use these funds to cover your bills while you recover, instead of deteriorating your health with stress.

Studies have found that a typical 30-year-old is four times more likely to become disabled than to die before the age of 65

Have you ever looked into your disability coverage with your employer? Do you even have any? Yes, you may receive unemployment, but this has a timeline on it.

Are you self-employed? Are you the main breadwinner in your family? These things will factor into your decision to buy disability insurance.

Disability insurance can help soothe some of these worries, supplement your income, and cover your debts so that you can focus on getting better, or on adjusting to your new life.

A critical illness may sound ambiguous, but it generally covers the big four

There are four critical illnesses that are the most prevalent in our society: heart attack, cancer, stroke and coronary artery by-pass surgery. Canadians are 10 times more likely to be unable to work due to a critical illness than to die before age 65. That sobering stat shows that it’s more than likely that your critical illness insurance will serve you long before your life insurance will.

Worried about “wasting money” if you ever have an illness?

If you add a return of premium rider you can receive all premiums paid into the policy back, if you’re fortunate enough not to have a critical illness occur before your policy matures (age 65, 75, or 100).

Critical Illness and Disability can come as a pair

There is also the option to add critical illness or disability riders to your life insurance policy. There is also CI/DI combination policies, and the option to add either as riders to each policy.

The combinations of how to protect yourself, your family, and the life you built together are endless. Talk to one of our advisors today to see what options will best suit your needs.

 

 

Sources

http://www.advocis.ca/content/education/LLQP/LLQP-dec11.html

https://www.theglobeandmail.com/globe-investor/retirement/retire-health/is-critical-illness-insurance-worth-it/article28195723/

http://www.tannerfinancial.ca/disability-insurance-vs-critical-illness-insurance/

https://lsminsurance.ca/life-insurance-canada/2011/05/critical-illness-insurance-vs.-disability-insurance-why-you-need-both

http://www.vpfg.net/wordpress/living-benefits-disability-insurance-vs-critical-illness-insurance/