How long can you go without income if you had a critical illness?


Bill’s Blog | June 6, 2024

No one likes to think about having a severe health crisis, but the statistics suggest you should have a plan for such an event. Cash is king in a crisis, but income is critical if you cannot work for a prolonged period. Yes, some of you may have a group plan through work, and you could receive approximately 67% of your current income. Is this enough if you cannot work for a year or two? So, let’s look at the Canadian statistics.

  • 1/2 of Canadians will receive cancer at some point in their life. Cancer does not care about age. When I do a seminar on Protecting Your Income, 9 out of 10 hands go up when I ask this question: “How many of you know someone personally who has cancer?”
  • 1/3 of Canadians will receive a stroke.
  • 1/4 of Canadians will receive a heart disease crisis.
  • 85% of all Critical Illness claims come from cancer, stroke, heart attacks, or heart disease.

When I meet with clients, I ask them if they have adequate life, critical illness, and disability insurance. Why? Back to statistics, we all have a 100% risk of death, a 50% chance of a critical illness, and a 33% chance of long-term disability. When developing a wealth plan, you must lay a solid foundation of adequate insurance to protect yourself and your family from life’s curve balls!

No one thinks it will happen to them, their family, or their friends, but sadly, we all hear of these events far too often.

Now that I have addressed the problems, I will focus on affordable solutions. I can help you, whether you are an individual, have a family, or are a business owner in BC.

Most Canadians need to learn that there are four different ways to get life insurance. Life insurance is to protect our loved ones, pay off debts, and leave a legacy, and you can create a tax advantage investment strategy with some permanent solutions. Only about 44% of Canadians have life insurance. Of those who do, up to 60% are underinsured.

Critical illness insurance has several different options. Basic CI that covers the three significant illnesses (Cancer, Heart, and Stroke). Second, you can get comprehensive coverage of 24 to 27 critical illnesses. You can also get simplified with no underwriting up to 75K coverage. Only 1.2 million Canadians have CI coverage. The average CI coverage is 83K in Canada. Critical illness pays out a tax-free lump sum amount based on your coverage.

About 1/3 of Canadians will experience a disability event as an adult. Disability insurance pays out a tax-free monthly income. If you have a group plan, that is awesome, but for many Canadians, the 1/3 shortfall of income will quickly cause a budget shortfall. The solution is an individual top-up to offset the income loss. The goal is to prevent a double crisis in terms of health and finances.

I always remind clients that it is best to apply for insurance products when they are younger and healthy. They should never apply when they have outstanding health issues or are planning surgery. I can generally help most people with various solutions as long as they are not diagnosed with a terminal health issue.

If you have found my blog informative and helpful, please get in touch with me if you live in BC. I can help you with affordable solutions. Most policies can be done online and over the phone.

All the best,

Bill Westmacott is a life insurance broker in BC.

Financial Education & Honest Solutions Create Success

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