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Why You Need Critical Illness Insurance

on Tuesday, 07 July 2015. Posted in Blog, Life Insurance

Many hard workers concentrate more on saving for far-off retirement than protecting today’s earnings. Your odds of living with a serious illness or disability outrank dying before turning 65 by five times. So putting mistaken trust in the government or your employer’s plan to cover your dire health needs can have disastrous results.

Learning that you or a loved one is severely ill can upset many aspects of your life. You, your mate, family members, and business partners may suffer more than physically and emotionally. The financial burdens of a debilitating disease can be shocking and draining. You may be desperate enough to consider anything from depleting your savings to selling your home. But if you had critical illness (CI) insurance, you could avoid such rash options and afford your necessary but overwhelming expenses.

Worrisome Statistics and Financial Choices

Consider these medical statistics:

  • Heart disease affects one in four Canadians
  • Prostate cancer strikes one in nine men
  • Lung cancer afflicts one in 17 women and one in 12 men
  • Breast cancer affects one in 8.8 women
  • 70,000 Canadians have heart attacks annually
  • 50,000 people experience strokes every year

Thanks to therapeutic advancements, more people are surviving those and other major conditions. Medical, family, personal, and business expenses can mount ― especially when you can’t work during extended recovery periods. Yet a recent survey found that Canadians aren’t following through with their intentions to shield themselves and their families from income losses due to major maladies or disabilities.

Even though respondents’ top priorities were their families’ financial security and their elderly quality of life, 89 percent didn’t have critical illness or long-term care insurance, 77 percent were without disability coverage, and 36 percent hadn’t acquired life insurance policies to help support their dependents after their deaths.

If you survive a severe disease, you might never recover from the associated financial loss completely. A 35-year-old employee who was making $120,000 per year until a long-term debility derailed his career could forfeit $3.6 million in salary by age 65 without accounting for cost-of-living increases.

While recovering from a long-term illness, you may have to choose between these undesirable options to fill a financial void:

  • Exhaust your savings. Unfortunately, most people’s emergency funds contain under six months’ worth of earnings.
  • Take money from your Registered Retirement Savings Plan (RRSP). This choice has long-term effects on retirement funds usually. Besides withdrawing fully taxable dollars, you also squander compounding’s possible growth ― a key way to increase your retirement funds.
  • Apply for loans. Finding a bank that will lend money to someone who’s not working is challenging.
  • Borrow from relatives. Usually, pride won’t allow you to be a monetary burden to your loved ones.
  • Sell your house. If you can’t wait to get a good price, this option could reduce your home’s value drastically. Finding a more affordable residence and moving during a challenging sickness can be too stressful.

Beneficial Solutions

Because anyone can receive a serious medical diagnosis at any time and age, planning for the unexpected is a wise financial move. To help safeguard yourself, family, and company from undue economic hardships, consult an Alliance Financial advisor about critical illness insurance.

Typical covered conditions go beyond cancers, strokes, and heart attacks to include Alzheimer’s disease, coronary artery bypass surgery, paralysis, and more. Receiving a tax-free $10,000-$2 million lump sum would ease your worries and monetary responsibilities. This payout would protect your hard-earned income and resources and thus your loved ones’ financial security.

Use that money for any purposes including paying for:

  • Your and/or your spouse’s leave of absence from work
  • Time off work to recover
  • Private nurse or nursing home • Medications that your provincial system doesn’t cover
  • Costly yet effective alternative therapies
  • Treatments in foreign countries
  • Domestic help
  • Childcare
  • Home mortgage
  • Groceries
  • Vehicle repairs
  • Home renovations
  • Debt repayments
  • Family vacation that enables recovery
  • Your, your spouse, or children’s education
  • Changing jobs
  • Starting a company

If you own a business, CI insurance could supply funds to bankroll:

  • Business expenses
  • Buying out shareholders
  • Key personnel coverage
  • Repaying corporate debts
  • Income for relatives joining your business

Future Protection

Insuring your home and vehicles comes naturally. So should protecting your income against financial disaster if an unexpected illness strikes. Contact an Alliance Financial advisor today to add this living benefit to your portfolio.

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