CI - WHO NEEDS IT?

CRITICAL ILLNESS INSURANCE

WHO NEEDS CRITICAL ILLNESS INSURANCE?

HOW MUCH CRITICAL ILLNESS INSURANCE SHOULD I BUY?

Who needs Critical Illness Insurance?

Anyone who:

• has debts or bills
• has a “significant other”
• has children
• is alone
• would be negatively impacted by a significant illness

I could also answer by simply saying “Anyone”. If something were to happen to you, would you like someone to be there for you? Would you need to hire someone to help run your business? Pay an existing employee an additional amount? If something happened to your “significant other” or to one of your children, would you want to be there for them? Would it help if six months to a year of your mortgage, your rent, your credit cards or other bills were paid?

How much Critical Illness Insurance should I buy?

Buy as much as you can reasonably afford. Do NOT feel that you need to buy a huge amount. Certainly it is very unlikely that you would need as much Critical Illness Insurance as you would Life Insurance. Would $50,000 help? How about $25,000? Would you refuse $10,000?

“I have Disability Insurance. Why do I need Critical Illness Insurance?”

First of all, DI allows us to pay our usual expenses. It does not cover the additional expenses often created by a Critical Illness. For example, if you have cancer, you may need chemotherapy. After a session of chemo, you will not be driving home. Either your wife will have to take time off work or you will need to take a taxi. If you have a heart attack, you may not be disabled long enough to satisfy the waiting period on your disability policy. Alternatively, you may decide to “slow down” and reduce your hours. Disability Insurance will probably pay you, depending on the type of plan that you have, if your doctor tells you that you MUST reduce your hours, but not if you simply decide to change your lifestyle. If your condition requires home or vehicle modification, do you have the available funds? If your physician suggests experimental medication (or medication not covered by your Provincial Drug Plan or your private insurer), will you have the funds to pay for what may be a VERY LARGE bill?

“Why are you suggesting that I purchase Critical Illness Insurance for my spouse or for my children?”

If something happens to your spouse or to your children, you will want to be there for them. If you have to take time off work, you almost certainly will. This may cause significant financial issues, which can at least be reduced if you purchase Critical Illness Insurance. No one likes to think of a spouse or a child becoming ill but it can happen. (I know, because it happened to my son). Insurance does not solve a problem, but it does allow you to do the best that you can, or to be there when you are needed

“I am financially well set with many millions in assets. Why would I need Critical Illness Insurance? I can well afford to pay any costs that I may incur.”

True; you can afford to pay these costs. You can easily write a check for $1 million if need be. But how can you best use your money? Should YOU write a check for $1 million, or are you better off paying a premium to the insurance company and let them write the check? For example, in the case of a male aged 45 who is a non-smoker, $1 million of Level Term to Age 75 Critical Illness Insurance would cost $12,500 in annual premiums. 

Back in 3 weeks to discuss the different types of policies available

Click these for more information on the respective topics :
Long Term Care Insurance
Disability Insurance
Critical Illness Insurance
Life Insurance
Mortgage Insurance