Critical Illness Insurance is Worth Every Penny
Critical Illness insurance is coverage against minor and major medical issues, such as cancer, heart attack and stroke. In fact, the number of conditions covered can range from 4 conditions up to 25, depending on the coverage you choose. All of these are paid out tax-free to you upon diagnosis or up to 30 days after diagnosis. Monthly premiums can be more affordable then you think, with options for term insurance up to a specific age or lifetime coverage. You can even obtain critical illness insurance electronically without any medical tests, depending on your age and the amount being requested.
What are the benefits?
The benefits of critical illness is taking comfort in knowing that you have financial protection against any costs that may occur and knowing that you can the time you need off of work to rest and recover. Having this protection will stop you have from having to cash-in your RRSP, TFSA, or take out a loan. One of the first things that most people do when money is needed quickly is to withdraw from their RRSP. Doing this can have huge impacts on your retirement, such as having to work longer or having your money run out sooner than expected in retirement.
Real world example
One of the best ways to pay for critical illness insurance is to re-allocate some of the money you are putting away into your RRSP or TFSA and use it to pay off the monthly premium. Let’s look at a real-world example of a healthy 45-year-old male saving $300 a month and in this case, $50,000 of coverage can be as little as $50 a month
As you can see, there is only a small change in the overall savings in the RRSP when insurance is purchased. Would you rather have a $20,500 decrease in your RRSP or $181,000 decrease in your RRSP? With the recent changes due to the COVID event, many insurance carriers have increased the coverage amounts that do not need medical tests. In addition, all insurance can be completed digitally with video conferencing software, and digital signatures. Now has never been an easier time to acquire the insurance protection you need as quickly and efficiently as possible.