Before Disability Occurs - Critical Illness Insurance

Becoming disabled can also occur due to illness. Life altering conditions may strike at any time with little or no warning. When people think of disability, often times they are only contemplating a physical inability but heart disease, cancer and other debilitating illnesses occur with great regularity.

Disability insurance's primary purpose is to provide replacement income should an accident or illness occur that restricts a person from working. Critical Illness insurance complements disability insurance. Basically, if an individual has taken out Critical Illness insurance and is diagnosed with one of the covered illnesses (ie cancer, stroke, heart attack etc.) the insurance will immediately pay out a tax free lump sum of money to replace income, cover medical costs, address accessibility concerns or for any other reason.

Statistically 1 in 2 men and 1 in 3 women will suffer from heart disease in their lifetime; the numbers are 1 in 2.3 men and 1 in 2.6 women for cancer. The good news is that recent medical advancements have made it more likely you will survive when these illnesses strike. The bad news is, the illnesses will continue to strike with the same frequency so the risks associated with disabling illness must be covered in financial plans.

As critical illness insurance, like disability insurance, is relatively expensive due to the likelihood of it being used, we will often guide our clients on the merits of having both disability and critical illness insurance but eventually will have to settle on coverage with one or the other. For instance, if our client works in a career where the occurrence of an illness is more likely than a physical disability, we lean more towards critical illness coverage. In these cases, we would calculate the right amount of critical illness insurance to provide for income replacement as well as for other needs.

There are many options to critical illness insurance plans. For instance, one option allows for a full refund of premiums paid if no claims are made or if the insured passes away. Critical illness insurance can also be taken out on the non income earning spouse and even your children if desired to cover the costs of dealing with the critical illness.

At Transitions Wealth Strategies we will review your personal situation and put a plan in place that cost effectively protects you and your loved ones should disability occur.

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