Do you need critical illness insurance?

The short answer is yes, but in reality there’s a lot more that factors into the decision of buying it or not. First let’s take a look at what critical illness is. If you’ve purchased the coverage, and you are diagnosed with a one of the covered illnesses, quite simply, you get paid a tax-free lump sum payment for the total benefit amount. Some common illnesses that are covered include cancer, stroke, or heart attack, but usually there are around 12 illnesses that make the list of being covered (for more in depth review of critical illness please click here).

So, is it really worth it? Absolutely it is, but obviously we need to be careful not to spread ourselves too thin financially by over insuring ourselves. However, that being said, if you can afford to buy it you probably should. Critical illness insurance is often considered young person’s product in that premiums are very financially realistic if it’s purchased at the right age. For example a policy for a 30 year old male, non-smoker, with a benefit of $50,000 can be as low as $36.00 per month (this is an example of a direct quote of an instant issue critical illness policy with Wawanesa Life, guaranteed level premiums to age 75). $36.00 per month works out to be $1.20 per day, which is about half the cost of a cup of coffee. As you can see, this policy is incredibly cheap, and with only a few qualifying questions of insurability the policy is issued, and there is no medical testing or doctor visit required.

Now let’s take a look at how receiving a benefit of $50,000 tax free could help you. Let’s say in our example here that this insured gets cancer. What can happen to us when we get cancer? Obviously there will be medical treatments. There will be many treatments, each of them time consuming. Being unable to work as much as you did before is clearly out of the picture, so you will already see a drop in monthly income. Sure, you will likely collect some sort of social assistance income, but the money received will never be even close to your income before your illness. While receiving treatment you will still be making rent or mortgage payments, paying for your car loan, auto and home insurance premiums, gas, food, and so forth. The financial strain of this alone could cripple your lifestyle, which is not something anyone wants, when they should be focusing on getting treatment and getting better. What if you have kids and require additional help to take them to school or pick them up from gymnastics? What if you require treatment that isn’t covered by provincial healthcare and must be purchased out of pocket? As you can see, the financial burden of a critical illness can be devastating, and what a sad reality it would be if this financial devastation could have been avoided by a little planning and $1.20 per day.

Listen, I’ll be the first person in a room that understands the reality of the cost of living nowadays, and how we put off purchases we don’t need immediately to make room for the rest of life. Nonetheless, I also know the importance of financial planning, and I know that a lot of the bad experiences in life we go through could often be avoided or lessened by being proactive and responsible at some point prior.

Surviving a critical illness is very likely today. The damaging lethal nature of illness like cancer, stroke and heart attacks is significantly reduced today, thanks to advancements in the medical industry. While this is incredibly fantastic news, it comes with it a whole new territory of planning. Today, we need to be prepared for the worst, and hope for the best. We need to consider that one day we might get cancer and prepare ourselves now. Do yourself a favor, or do your family a service (that you may have now, or in the future) and purchase critical illness insurance before it either gets too expensive or you don’t qualify. Lastly, I’ll leave you with this – the best time to purchase insurance is always today.

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