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Hot yoga, superfoods and insurance

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Protect the healthy lifestyle you’ve worked hard to build.

Your health and well-being matter to you. Perhaps you play ultimate frisbee or sweat it out in high-intensity interval training. Maybe you follow fitness influencers on Instagram, meditate or meal prep on the weekends. Whatever your preference, chances are you make a commitment to feeling your best. But what if your world suddenly turns upside down?

Ironically, millennials, widely considered the most health-conscious generation,[1] often feel immune to the kinds of health problems that can derail the best-laid plans. Even if you know someone your age who has experienced a serious illness or disability, it can be hard to believe something similar could happen to you. In fact, there’s something called the “optimism bias” that makes people underestimate the risk that negative events, including injury and sickness, will affect them.[2]

The healthy lifestyle you’ve worked hard to achieve also includes your finances. Safeguarding your income can help prevent you from being caught off guard by lessening the financial impact of an unexpected illness or injury.

Ensure you have the right protection

The first insurance policy many people buy is life insurance, but if you’re in your 20s or 30s, you’re more likely to make a disability and critical illness insurance claim than you are to die prematurely. Think of it this way: If you could no longer earn a paycheque due to illness or injury, how long could you keep up your rent or mortgage payments? What other expenses would start piling up?

The fact is, when you’re younger, your risk of dying is much lower than the likelihood of illness or injury (see sidebar). Disability insurance and critical illness insurance offer protection to help replace your income if you can’t work, so you can maintain your lifestyle and focus on recovery.

A 25-year-old male non-smoker has:

37%
risk of disability before age 65
27%
risk of critical illness before age 65
07%
risk of dying before age 65


A 25-year-old female non-smoker has:

43%
risk of disability before age 65
20%
risk of critical illness before age 65
05%
risk of dying before age 65


Source: www.insureright.ca/what-is-your-risk

How does disability insurance work?

Disability insurance pays a percentage of your income if an illness or injury prevents you from working. It covers physical health as well as mental health, which is important because it is estimated that half of Canadians will experience a mental illness by the time they reach age 40.[3]

If you’re a business owner, you can get disability insurance to cover your income and your business expenses as well as to fund a buy-sell agreement. Some policies even provide discounted disability insurance protection for people who work in specific professions, such as accountants, engineers or veterinarians. 

How does critical illness insurance work?

Critical illness insurance pays a lump sum if you are diagnosed with an illness or condition covered by your policy. To save money, consider term critical illness coverage, which protects you for a specific number of years. It can be renewed for the same term or upgraded to a longer or permanent duration later without further medical underwriting. That way, in case your health changes down the road, you will be able to keep your protection for a longer term in a cost-effective manner.

You can choose a policy that covers more or fewer illnesses and conditions. Some also provide additional benefits that are available without making a claim, such as reliable online health information, one-on-one telephone support and medical second opinions from top specialists.

How much protection do you need?

When deciding how much disability and critical illness insurance you need, consider how long you could be away from work before you would be in financial difficulty. Recovery from a serious injury or illness may take many months. It can also be stressful – so the fewer financial worries you have, the better.

Beyond covering your own lost income, consider other costs you might encounter, such as:

  • your partner or other loved ones needing to take time off to help you get better
  • extra help with child care for a period of time
  • out-of-pocket costs for things like medications, hospital parking, home care or accessibility renovations

Be health-conscious about your finances

Healthy finances are an important part of a healthy life. Both disability and critical illness insurance can help strengthen your finances and make them more resilient – and, if you have a serious injury or illness, they can provide a financial cushion that lets you concentrate on getting well again. 

Speak with your advisor about the right balance of coverage, features and cost for your needs.

© 2019 Manulife. The persons and situations depicted are fictional and their resemblance to anyone living or dead is purely coincidental. This media is for information purposes only and is not intended to provide specific financial, tax, legal, accounting or other advice and should not be relied upon in that regard. Many of the issues discussed will vary by province. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation. E & O E. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Any amount that is allocated to a segregated fund is invested at the risk of the contractholder and may increase or decrease in value. 


[1] https://campuspress.yale.edu/perspective/are-millennials-healthier-than-the-baby-boomers

[2] www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/optimism-bias

[3] www.camh.ca/en/driving-change/the-crisis-is-real/mental-health-statistics


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