These daily financial tips are designed to be short ideas covering different aspects of family and business finances. They are short pieces intended to provide information to enable individuals, families and businesses to make informed financial decisions. Not all tips will apply to every situation, but over the course of a year, most financial topics will be covered. Check in regularly and share with friends and associates.
I continue to cover different insurance strategies which form the foundation for Financial plans. Insurance should form the foundation for any financial plan. Each of Life Insurance, Disability Insurance and Critical Illness insurance protect your plan against different life events and should be combined for effective coverage. Today we will discuss the role of Critical Illness Insurance which is a newer form of insurance which has existed for little over 20 years.
Like Disability Insurance, Critical Illness Insurance is a living benefit designed to protect your most valuable asset – your health. In BC, we believe that MSP will cover all our medical expenses should we get sick. While MSP covers many expenses, many others are not covered. Many modern medical advances and medicines are not covered by MSP. There have been a few stories in the news recently highlighting such cases.
Should you contract a major illness, such as cancer, stoke, heart disease, etc (many policies will cover up to 25 – 28 illnesses), Critical Illness will pay out a lump sum of cash tax free. These proceeds can be used to cover expenses not covered by MSP for medicines and therapies as well as other expenses families will bear to provide support such as lost wages, travel and accomodations, etc. Proceeds can also be used to obtain treatment in other jurisdications or alternative treatments.
Canada is also fortunate to be the last remaining country to offer Return of Premium options, whereby if no claims for illness are experienced, all the premiums paid are returned to the policyowner. Sort of like a money back guarantee or reward for living a healthy life. I prefer to think of it as a GIC with a life warranty attached.
Critical Illness Insurance plans like Life Insurance can be structured many different ways, on a Term basis (ie term 10, term 20) or more permanent coverage providing lifetime coverage or until age 75. It is best to discuss with a licensed insurance advisor to structure the most effective coverage that suits both your lifestyle and budget and is combined with your Life Insurance and Disability Insurance plans.
Many or most of us prefer to think we won’t incur a major health event, especially if there is no previous family history of illness or if we lead active and healthy lifestyles. The reality is many illness are environmentally based (ie due to contaminents in the air we breath, food we eat, water we drink). While many illnesses strike those in older age demographics, illness can strike anyone at any time. I’ve had claims from young families in their early thirties with no previous family history who are now dealing with Multiple Sclerosis, Lou Gherigs Disease (ALS), Cancer and even young children diasgnosed and treated with cancer.
Take action to protect your health so you can take care of your family and your financial objectives. Discuss strategies that combine elements of Life Insurance, Disability Insurance and Critical Illness Insurance with a licensed Insurance Advisor.
Share these ideas with friends and family and come back to check out daily financial tips and ideas. If there are subjects you wish covered or questions, please email me and I’ll include them in future posts.

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