A Safety Net for your Family
Life is rolling along. You have a loving partner and two adorable children. You and your partner have good jobs, and the kids are in school. You save for annual trips, retirement, and your kids’ education. What happens if something throws your plans awry?
Unfortunately, the risk of a serious life-altering illness is quite high. Take for example, the imaginary couple Jane (age 40) and John (age 41) Smith from above. According to Canada Life’s “Know Your Risk Calculator” this couple has a 22% chance that one of them will become critically ill before age 65. Furthermore, as medical research advances, they are more likely to survive a serious cancer, heart attack or other disease.
What would happen if Jane suffered a heart attack and ended up in the hospital for several weeks? How would this impact their day-to-day life? The answer would be different for every family, but you might expect John to take time off work and need to rely on family or babysitters to care for the two kids. There would be travel costs to the hospital – gas, parking, and meals. Specialized care may require travel, hotel bills and rental car expenses. On the health side there will be new medication costs and rehabilitation costs as Jane begins to recover.
How might they cover these costs?
John and Jane dip into their emergency fund, and as that runs out where do they turn? A line of credit or credit cards would be a short-term solution, and then they may need to start redeeming funds from their retirement funds (RRSP or TFSA). Above and beyond the emergency fund, none of these options are great. They all begin to impact the trips, education funds and retirement goals that the family had planned.
What if Jane had a critical illness policy? What if 30 days after having her heart attack she received a lump sum payment from the insurance company that she could use at her full discretion? Ask one of our Financial Advisors how critical illness can enhance your financial plan by acting as a safety net for your family.
The case study mentioned in this presentation is provided for illustrative purposes only and does not represent an actual client or an actual client’s experience, but rather is meant to provide an example of our process and methodology. The results portrayed is not representative of all of our clients’ experiences.
Sarah Chisholm is a Financial Advisor with Assante Capital Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd. Please contact her at 613.774.2456 or visit ofarrellwealth.com to discuss your circumstances prior to acting on the information above. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization.
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