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Income Protection for Entrepreneurs: Critical illness protection

By Jackie McCann-Scott

In this next installment of our series on protecting your greatest asset (you!), we delve into the world of critical illness insurance. The brainchild of a heart surgeon, “CI,” as it is more commonly known, was created when Dr. Marius Barnard noted that patients with financial stress were more likely to end up back under his care than those without that burden. He approached the insurance industry and asked, “What if there was a product that allowed people to focus more on getting better and less on getting paid?”

From that simple question, CI was born.

How is CI different from DI?

While both disability insurance (DI) and critical illness insurance (CI) are classified as “living benefits,” they differ greatly in terms of what they cover and how the benefits are paid.

As we learned in the last issue of The Advisor, disability insurance is designed to replace a portion of your income for a set period if you are unable to work through injury or illness. I believe this form of income protection is key to a business owner’s overall financial wellness.

I also believe DI alone may still leave you exposed to financial risk.

Ask yourself: how many people do you know who are struggling with an illness and have seen their expenses go down?

For example, a 2019 report in the National Post highlighted the stark financial reality of being diagnosed with cancer. In the report, Gabriel Miller of the Canadian Cancer Society noted, “For middle-class Canadians and working-class Canadians, a cancer diagnosis is like standing on thin ice, and you only hope you can get back to work and cover your bills before you go under.”

Quite simply, CI can provide the additional cash that DI does not—cash that may be needed for trips to the doctor, medical equipment, and medications that your health plan may not cover.

CI provides a tax-free, lump sum amount to an insured person who is diagnosed with a critical illness. Since the coverage amount you select has nothing to do with your income, it is also a great fit for entrepreneurs starting out who may have little reported income to insure with a traditional DI plan.

Most policies cover at least the four most common illnesses: heart attack, stroke, coronary artery bypass surgery, and cancer. However, in an effort to compete, insurers have added as many as 29 additional conditions to their policies, and many offer optional return of premium, second opinion, and early detection benefits as well.

There is a fit for every need and budget out there. What you decide upon is not as important as having some protection in place. It’s about making decisions today—while you are healthy—that will put you in control when sickness starts taking choices from you.

Ultimately, the real benefit of CI is not the money, but the freedom it gives you to focus on what really matters: your health.


Jackie McCann-Scott

Jackie, owner and founder of Invested Mama Inc, was raised by the original Invested Mama: a single parent who not only could stretch a dollar for miles, but had a deep respect for money and the freedom it can provide. Jackie has since spent nearly two decades helping individuals and families address their own financial wellness with the same direct and clear approach that was taught to her. She provides a full range of financial planning, insurance, and investment solutions to her clients, utilizing the best resources in the industry. As a financial advisor, she aims to instil a sense of control and peace of mind around money that will empower her clients and keep them moving forward. 

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