The Importance of CI and Disability Insurance for Your Retirement Dreams

Critical Illness, or CI insurance, and disability insurance are two important types of insurance that provide financial protection in the event of an illness or injury. While both types of insurance are designed to help individuals and families cope with the financial consequences of unexpected health issues, they offer different types of coverage and serve different purposes.

CI insurance, also known as critical illness insurance, is a type of insurance that provides a lump sum payment to the policyholder if they are diagnosed with a critical illness such as cancer, heart attack, or stroke. This payment can be used to cover medical expenses, pay for lost income, or cover other expenses related to the illness. The main advantage of CI insurance is that it provides a significant amount of money quickly, allowing policyholders to focus on their recovery without worrying about financial stress.

Disability insurance, on the other hand, provides a regular income to policyholders if they are unable to work due to an illness or injury. This type of insurance is designed to replace a portion of the policyholder's income while they are unable to work, allowing them to maintain their standard of living and cover their expenses. Disability insurance can be short-term, covering the policyholder for a few months, or long-term, covering the policyholder for several years or even a lifetime.

It's important to have both type of insurance, as both of them have their own advantages and disadvantages. CI insurance provides a lump sum payment that can be used for medical expenses, lost income and other expenses related to the illness, but it only covers specific illnesses. Disability insurance, on the other hand, provides a regular income to policyholders if they are unable to work due to an illness or injury, but it doesn't provide a lump sum payment.

However, it's important to note that the odds of becoming disabled during one's working years are quite high, with 1 in 4 of today's 20-year-olds expected to become disabled before they retire. The odds of being diagnosed with a critical illness, such as cancer or heart disease, are also significant, with 1 in 2 Canadians expected to be diagnosed with a critical illness in their lifetime. As tax season approaches, many individuals are focused on contributing to their RRSPs in order to save for retirement. While saving for retirement is important, it is also crucial to consider the potential impact that a critical illness or disability may have on your retirement plans. A critical illness or disability can not only cause physical and emotional stress but also have a significant financial impact on your retirement savings. It's important to ask yourself, if your income was impacted by a critical illness or disability, would you be able to continue saving for retirement or would you have to withdraw from your retirement savings to make up for lost income and potential medical expenses?

That's why it's important to consider purchasing CI insurance and disability insurance in addition to saving for retirement. These types of insurance can provide financial protection in the event of an illness or injury, helping to mitigate the financial impact of unexpected health issues on one's retirement plans. Additionally, it is important to make sure you have a good balance between your savings, investments and insurance policies. In conclusion, while saving for retirement is important, it is also important to consider the potential impact that a critical illness or disability could have on one's retirement plans. Protect yourself and your family from the financial consequences of unexpected health issues and ensure that your dreams remain intact, contact us today to secure your financial future.