I want share a story that has affected me recently. When recommending coverage to people, the most common response I get is – i don’t need that. I am guilty of that as well. I just recently submitted my application for disability insurance – being self-employed, i am in serious trouble if I get hurt. I applied for as much as I could afford right now – it will have to do, but at least I took that step.

I have a client (who will remain anonymous) who recently purchased business liability insurance and professional liability insurance through me because the contract that he has with a US company required him to have the coverage (since no one in Canada asked for the coverage, he felt he didn’t need it). One stipulation of the contract is that he carried worker’s compensation or a product of similar design. 

A long term disability plan is similar if not superior to the worker’s compensation plan and after a few quotes, he submitted an application – again, because it was required of him.

in my follow up communication with him, I tried to collect some data that was incomplete but i never received any answers to my questions. It was a little frustrating to say the least.

After a few weeks, i received a call from my client. he apologized for being out of touch and explained that he had undergone emergency surgery for a problem that we disclosed on the application and as a result of that surgery, it was discovered that a tumor was inadvertently removed from his body – He was diagnosed with cancer. 

His contract with the US firm was cancelled because they required him to physically work at the plant, he has to undergo Chemotherapy and is currently not working.

I mentioned in our conversations that the disability policy was not enough – while it does afford some critical illness coverage, it is not a replacement for that coverage. He didn’t feel it necessary to get the coverage – and I can’t blame him for his decision. It is very difficult to come to terms with our own mortality – our consciousness can’t bear it. 

Think about this:

You insure your home for fire: Odds of a fire taking it all away – 1 in 18000  (ish)

You insure your car (mandatory, yes): odds of an accident – 1 in 1800 (ish)

Do you insure your life / mortgage: odds of death (for anyone up to 60) – 1 in 100 (ish)

Do you insure your health? Cancer, stroke heart attack – 1 in 3. (you don’ t want me to say ish) 

 

Why would you not get critical illness? Who is going to pay your bills? Who is going to pay for your medication?  Quoting Canadian Medical Association Journal, Vol 137, Issue 10 903-906:

“The cost of chemotherapeutic agents administered on an outpatient basis over 4 to 6 months in established drug protocols ranged from $260 to $5374 (mean $2224)”

How are you going to pay for this – by draining your RRSP’s? You can fight the disease – critical illness insurance is paycheck insurance – keeps money in the pot for you to not worry about anything other than recovery.