Critical Illness Insurance to Protect Retirement Savings
Right before retirement is not when you want to be forced to dig into your savings in order to pay for health care or other expenses resulting from a critical illness. Critical illness insurance is an excellent solution to keep your retirement plans on track.
The nuts and bolts
The good news is that advancements in the medical field are making it possible for more and more people to survive their critical illness.
The bad news is that a diagnosis is not without impact. It can affect your lifestyle and hinder your ability to cover your financial obligations. Without critical illness insurance, you could be on the hook for some of your medical expenses, not to other costs associated with your recovery.
Reality check
Forget the numbers, let’s look at age.
- According to the Canadian Cancer Society (2019), cancer is a disease that mostly affects Canadians aged 50 and older (This hyperlink will open in a new tab)..
- According to the CHU de Québec (2018), men over 55 and menopausal women are at the highest risk of cardiovascular diseases (This hyperlink will open in a new tab). (French only).
- According to the Institut national de santé publique du Québec (2005), approximately 75% of all cardiovascular disease occurs in people 65 and over (This hyperlink will open in a new tab). (French only)
- According to the Canadian Alzheimer Society (2022), after 65, the risk of developing Alzheimer's disease doubles approximately every five years (This hyperlink will open in a new tab)..
- According to Parkinson Canada (2022), 85% of those diagnosed with Parkinson’s are over the age of 65 (This hyperlink will open in a new tab)..
The trend is fairly easy to see.
But I still have group insurance…
Since you’re not retired, you still have access to your group plan’s disability insurance benefits. However, these benefits amount to a percentage of your salary. This can be enough in certain situations, but not necessarily for a critical illness.
And if things really don’t go according to plan, then you would have to consider postponing your retirement.
Critical Illness Insurance
The objective of critical illness insurance is to provide an insured who is diagnosed with a covered critical illness (and able to fulfill the 30-day survival period) with a tax-free lump sum amount to be used as the person sees fit.
For instance, you might want to…
- Go to a private clinic or abroad for treatment.
- Pay for prescription drugs and medical expenses not reimbursed by either the public option or your group insurance plan.
- Adapt your home or get home nursing care.
- Afford a leave of absence for your spouse or family member so that they can take care you while you recover.
Without insurance, the answer is to pay out of pocket for them.
Critical illnesses covered
Basic critical illness covers the three most common ones: cancer, heart attack and stroke.
Enhanced critical illness covers an addition 22 illnesses, including Alzheimer’s and Parkinson’s.
As always, talking to a financial security advisor can help you make a well-informed decision.
