Covid-19 has been a real wake-up call for all of us. That’s true even for those of us in the insurance industry.
It doesn’t matter how well you’ve protected yourself, your loved ones and your business. It doesn’t matter if you’re young and healthy right now. We’re all thinking more seriously about illness.
Everybody’s thinking about how to look after themselves and their families if they get sick
This is where income protection comes in. You may have heard of it, but a lot of people don’t know how it works…or that you can use it as a savings plan if you never need to use it for health reasons.
Income protection means you can plan for a health scare, with a tax strategy in case you never have one
Here’s how it works. If you have income protection in place, it provides you or your family member with $250,000, tax free, during a life-threatening illness.
The most common approach is income replacement insurance, such as Critical Illness or Disability insurance.
There are a few differences between these products.
First of all, anyone in Canada can purchase Critical illness Insurance. In contrast, Disability Insurance relates to your income, much like a mortgage approval.
Secondly, Critical Illness insurance covers you if you get specific illnesses. (Covid-19 isn’t one of them, by the way.) It typically covers illnesses like life-threatening cancer, stroke or heart attack, and more. Disability Insurance kicks in if you can’t work because of any long-term illness or injury.
Either approach refunds your premiums if you don’t use the coverage
Both of these types of insurance let you to choose a full “Return of Premium”. This 100% return of your capital can happen as early as 15 years from the date your policy starts. In simple terms, you either collect the insurance value when you need it most during a diagnosis, or you request that every penny you have contributed is returned to you. And the best part: every dollar is refunded completely tax free.
So, you have full protection for a serious illness OR full refund of every dollar you contributed over 15 years or beyond
Here’s why I think it’s really worth considering. Take a look at the stats below.
If you live in Canada, you have a chance of any of the following scenarios:
- There’s a 1 in 3 chance you will become disabled for 90 days or more prior to age 65.
- 1 in 2 men and 1 in 2.2 women will develop cancer in their lifetime.
- Each year there are 70,000 heart attacks and more than 62,000 strokes.
If you’re one of the almost 50% of Canadians who will develop cancer, you’ll never regret having insurance. But what if you’re one of the other half of Canadians who never deal with cancer personally? In that case, you want your money back.
In this case, every cent you ever contributed towards protecting your health and income comes back to you. Tax free.
You’re protecting your income while you live and enjoy your life
If we have learned anything over the last four months, it is that life is beyond unpredictable.
So let’s take control of what we are capable of controlling
Then we have the most bandwidth possible to handle the moments we can’t control the way we want to.
