Shawn Pankow, CFP, CHS, CLU
The recent announcement by the Canadian Cancer Society indicating that nearly one in two people will be diagnosed with cancer in their lifetime stands as a stark reminder of the risks each and every one of us faces.
The recent study conducted by the Canadian Cancer Society, the Public Health Agency of Canada and Statistics Canada is alarming. It indicates 49 per cent of men and 45 per cent of women will be diagnosed with cancer in their lifetime. Overall, cancer will claim the lives of one in four people.
Furthermore, the study concludes that 90 per cent of people diagnosed will be aged 50 or older. As disturbing as these statistics are, I don’t think too many people find the numbers shocking as all of us know far too many people who have battled, or are currently battling, this dreaded disease.
Thanks to medical research, great advances have been made in the fight against cancer and because of investments in cancer control including prevention, early detection and treatment, the overall cancer survival rate has increased from about 25 per cent in the 1940s to 60 per cent today.
Yet, considering the probabilities of being diagnosed with cancer or another serious illness, and the concerns this brings, most people don’t often contemplate the financial impact that follows as income reduces or dries up just as expenses are rising.
It is encouraging to know that the majority of people today do recover from cancer and in many cases, are able to resume the lives they enjoyed before becoming ill. However, the financial impact of treatment and recovery can be very damaging to one’s financial security and long-term financial plan.
While some people may enjoy a great benefits package at work and may have both short and long-term disability plans that can help replace lost wages, the majority of the population does not. Regardless, there are expenses that are not covered and in many cases, cancer treatment may not result in total disability, but may still lead to a significant loss of wages. The loss of income can extend to close family members who take on the role of primary caregiver, leading them to take a reduction income as they take time off work to help.
Although most people recognize the need to own life insurance to protect their families should they die, too few people fail to understand the difference critical illness insurance can make in preserving their financial security should they be diagnosed with cancer or another serious illness.
Critical illness insurance is designed to pay the insured a lump sum, tax-free payment if they are diagnosed with a covered critical illness, and make it through the 30-day survival period. This money enables a sick person to pay off a mortgage or other debts, replace his or her lost wages or those of a loved one taking time off work and provides the money needed to deal with the healthcare-related expenses.
I have had numerous clients diagnosed with cancer and other serious illnesses – many of whom decided years earlier to invest in critical illness insurance – just in case. The payments from critical illness insurance has paid off mortgages, replaced lost wages, and kept businesses going while the owner recovered. In all cases, these people were able to preserve their financial security through the most difficult time in their lives. They were able to focus on getting better and were not burdened with worrying how they were going to pay the bills.
Critical illness insurance plays a very important role in your overall financial plan. Those who have accumulated some wealth and are preparing for retirement can better ensure their plans for retirement remain intact if critical illness insurance is there to preserve those assets for their golden years.
In a day and age when most people live paycheque to paycheque and many would have a very difficult time going even a month or two with no income, imagine what would happen to your retirement savings, your home and other valued assets if you could no longer work due to a serious illness.
Speak with an insurance-licensed financial advisor and learn how affordable this critical piece of your financial plan can be.
Shawn Pankow is a Certified Financial Planner, Certified Health Specialist and licensed insurance advisor with Pankow Financial Solutions in Smiths Falls.
This article was first published in the August issue of Hometown News. For more articles from our August issue, pick up a print copy at a local retailer or read our digital version.