Earlier in the year my blog, “Looking After Your Financial Health, Part One” talked about how busy we, as women, generally are; and more specifically, how we as female entrepreneurs, always are! We are high energy, creative women, very involved in our communities and we commit by taking action.
My question to you in my first blog was: we are very good at looking after others and our businesses, but how good are we at looking after ourselves?
So, are you making any progress in taking care of your financial health? There are many, many facets to being financially healthy. A comprehensive, regularly updated, Financial Plan is at the core of your Financial Health. A good Financial Plan will provide direction and strategies as you move through the various stages of your life.
Last blog I talked about the importance of protecting your ability to earn an income in the eventuality of an accident or illness through disability insurance.
This time – I will look at another type of protection; critical illness. When a critical illness strikes, the last thing you want to worry about is money and your business; you need to focus on recovery. Your well-being and the well-being of your family or business depend on the strength of your financial plan. Adding critical illness insurance to your plan can help see you through such a life-changing event. Some business owners, for various reasons, show little earned income and disability insurance might not be suitable. Critical illness protection is another option. Critical illness insurance provides a lump sum payment if you are diagnosed with a serious illness. This payment is tax free and can be used for whatever you require to get better.
People are often caught off guard by the impact of a critical illness on their financial well-being. Besides the time lost at work to care for oneself or a spouse or child, typically there are expenses that are not covered by government – new drug treatments, travel to treatment centres, or modifications at home to accommodate a life-altering situation. Having this extra measure of financial security helps keep you afloat in a time of crisis, giving you freedom to concentrate on what’s most important – your recovery.
Many of us, particularly women like ourselves, feel we are invincible – that won’t happen to me; that can’t happen to me…I have too much to do! But, unfortunately it does happen.
As I mentioned previously, the majority of self-employed individuals are not eligible to get even the short-term income benefit available through employment insurance (EI). So what happens to your financial health if you don’t have critical illness or disability coverage and you or one of your family becomes critically ill? Think about that.
Like disability insurance, Critical Illness protection can be customized to your specific situation and need. The amount of coverage; illnesses covered; and return of premium riders can all be identified and determined based on your needs and cash flow.
Our Financial Health is also impacted by the plan we have in place for our family. Critical illness for our children is one of the best types of protection we can provide for them. We all know that if one of our children becomes critically ill – we will put our lives on hold; we will do whatever it takes; take them wherever they need to go at whatever cost – to help them get better. The stress of being critically ill or dealing with a child who is critically ill is overwhelming. Adding the worry of financial difficulties on top of that is often just too much for us to handle. With this coverage in place, we remove the financial worry, and can focus on what’s most important. Most critical illness plans for children offer a return of premium option – so that if our child doesn’t get sick (which is what we hope happens) – a majority of the premium is paid back at certain intervals. Some plans are much better than others – so speak to a qualified Financial Planner to ensure you get sound advice.
Critical illness can be tailored to meet the needs of you as a business owner, your family and your employees. You need to meet with a qualified professional who can provide the necessary analysis to determine if there is a need and how that need can become an affordable option and part of your overall Financial plan – another step toward improving your Financial Health.
Kathy Cormier is a Certified Financial Planner, the only recognized designation in Canada for Financial Planning. Kathy is self-employed as a financial professional running her own practice, with Investors Group and has been providing financial planning advice to individuals and business owners throughout Newfoundland and Labrador for 17 years. Check out Kathy online at www.investorsgroup.com/en/kathy.cormier/home.