Do I Need Critical Illness Insurance In Canada?

If you were given that choice and you had a lump sum that you could tap into to pay for some of those additional costs that come up and those treatments that come up, would that be of value to you? So that you could pick the treatment option, the one that gives you the best chance of survival?

As people begin to process and they're really hearing what you're sharing, for many people, it's uncomfortable. For many people, it's very uncomfortable to think about that, because for some folks, that could bring up feelings of anxiety, it could be bring up, you know, feelings of pressure. And it's really important for us to be able to confront that and to be able to eat that fear and say, look, we can plan for this and there's a solution to this, to this problem.

I want to share with you that Lori has been in the industry for 20 years, serving in many different capacities. And Lori joined the Desjardins Life and Health Business Development team back in 2017. And she's also spent time with our client services team at Ascendant. And while Lori has indicated that in the industry, this is very uncommon for industry representatives to actually be meeting with agencies clients like what we're doing here today. But Lori said she had such a great experience with our team that she RSVP absolutely to our invite to be a part of today's webinar. And she's very keen to ensure that families have the right protection for the right need. She's a very passionate advocate for critical illness protection, and you'll see that today. And the whole premise is that you can make a very informed decision about getting a plan B in place and being well prepared before the unthinkable happens. And her personal motto is to expect the unexpected and to plan for the unexpected. So, without further ado, please join me in extending a warm welcome to Lori Hardery. Lori, welcome.

Thank you. Good morning, everyone across Canada. As Jason mentioned, I'm delighted to be here to talk to you about critical illness insurance. It's one that we don't talk often enough about, but it's so important to know how a critical illness policy can help you, what is the importance of it, how to plan for the future as well. So I understand many of you have have worked with the Ascendant team and got those life insurance plans in place, and I applaud you for that. Making that step to make sure that your loved ones would be protected in the event you pass away prematurely. Also getting life insurance in place to make sure that the life insurance is keeping up Seeding inflation, exceeding inflation. Sorry. And so that you are building a dynasty and you are protecting your legacy, you're protecting your assets from tax erosion as they pass from parents down to children. And those products are there to protect your family.

Many of you have also been saving for retirement. You're making those tough sacrifices today to make sure you are living that dream of having a comfortable retirement. And also many of you are saving for those annual family vacations as well. What would be some things that would knock you off the path of getting or saving for that comfortable retirement? Taking those annual family vacations. What would be some major things that could happen in your life that would knock you off that path of saving for your retirement?

We've got loss of income, getting cancer, death.

Health issues, getting sick and losing my job, job loss, having an accident, terminal illness, loss of job, not being able to plan ahead, getting sick, unable to generate income.

Absolutely. And all those are the right answers. The one that I hear most often when I ask a client that question is what? Well, if I lose my job, because if I lose my job, I don't have an income. I have to stop my contributions to retirement. I can't save for those annual family vacations. My bills are still due. Where does that money come from?

If you said illness, terminal illness, that is one that will knock you off that path for saving for retirement. Having the ability to, to pay all those monthly contributions just because you get sick, the bank still wants to get paid, right? You still have to keep the lights on and the power on. And of course in Alberta, if you're in Alberta, you saw your electrical bill and your heat bill, it's almost a mini mortgage payment. The cost of groceries is going up, all those expenses continue. Even though you are diagnosed with a serious, very serious illness. And as Jason mentioned, if we take a look at our close inner circle, you probably know someone that has been diagnosed with a serious illness. Cancer, heart attack, other illnesses. I myself, you know, prior to last year, knew, knew of clients, knew of family members, but grandparents who may have been, who were diagnosed with cancer. But as I'm in my mid-40s, in this last six months, I know four very close first line connections diagnosed with serious illnesses. A female age 45, diagnosed with breast cancer. A brother in law, age 50, diagnosed with bowel cancer. Most recently a very close friend, her husband had a aortic aneurysm at midnight one night. He is lucky to be alive. He's lucky that they were able to repair that. It's a miracle that he's alive. But being diagnosed with a serious illness does come with a financial impact, and it can create a very serious financial stress. If you don't have that plan B in place, expect the unexpected, but plan for the unexpected.

When someone is diagnosed with a serious illness, if we use cancer, for example, Jason had mentioned, the statistic today is one in two Canadians will be diagnosed with cancer at some point in their life. And nine out of 10 Canadians have at least one risk factor for heart disease and stroke. But with advances in medical treatments and technology, if we're specifically Referring to cancer, 60% of cancer patients today in Canada will survive beyond five years, and that should be great news. But if they did not have that plan b in place to help them when they get that very serious diagnosis, there's going to be financial stress that will delay their recovery. When someone is diagnosed with a serious illness, a couple of things could occur. If the client is diagnosed with cancer, it's the one that we see more often than not. And the doctor says, clear your schedule for the next nine months to one year, you are diagnosed with cancer, and even though we found it early enough, you still have to go through surgery, chemo, and radiation, and it's going to take nine months to one year to go through your treatment plan.

If you have to do that, you have to clear your schedule, you have to stop working. Where does the money come from? Number one, to keep the roof over your head, to pay all those utility bills that are skyrocketing, the grocery bills, and add on additional medical expenses that come up when you're diagnosed with a serious illness.

When it comes to cancer, depending on their treatment plan, some of the drug costs may not be fully covered. Now, if you're going through your cancer treatment and it's in the hospital that is government funded, but there are certain experimental cancer treatments out there that have been shown to give the client or give yourselves greater chance of survival, but perhaps that one is not yet covered by the government. And your oncologist says to you, do you want to try the experimental drug? Okay, it's going to give you a 90% chance of survival, but it's not yet government funded. So it's going to cost you $8,000 a month for the next nine months, or we have an equally good treatment plan. It's a 70% chance of survival, and it is covered by the government. If you were given that choice and you had a lump sum that you could tap into to pay for some of those additional costs that come up and those treatments that come up, would that be of value to you? So that you could pick the treatment option, the one that gives you the best chance of survival. But in addition to the actual cancer treatment itself, there may be equipment that you need. Female clients going through breast cancer, and if they have to have a mastectomy, they may want to buy a prosthesis for that if they're going to lose their hair because of cancer treatment. Depending on the type of cancer treatment they receive, they may want to purchase some wigs, some real hair wigs to make themselves a little feel a little bit more comfortable going through treatment. Some of the other drugs that are not covered, unless you have a group benefit plan for a client that's going through chemo, they are prescribed anti nausea drugs. Chemo is grueling on the body, and those anti nausea drugs are not inexpensive.

And so all these additional medical expenses could come up. Plus you have to pay all your regular bills and you don't have an income to pay for that. And that can create a lot of financial stress for ourselves as individuals. The other thing that does happen when someone is diagnosed with a serious illness, and if we use cancer again as the example, other cost that can come up is traveling to and from the cancer clinic every day for months on end.

The price of gas has skyrocketed recently. And if you have to drive across the city every day for your cancer treatment, that's going to be a pretty hefty gas bill that you were not expecting. Also parking. Don't know when the last time you went to the hospital, but if you have to park there, you are looking at a minimum of 15 to $20 every day while you are going to the hospital and you need to park there so you can go in for your treatment. But who is driving to the hospital? Are you driving yourself to the hospital if you were going through cancer treatment?

Okay, we have family members.

What's interesting too is that.

As people begin to process and they're really hearing what you're sharing, for many people, it's uncomfortable. For many people, it's very uncomfortable to think about that, because for some folks, that could bring up feelings of anxiety, it could bring up feelings of pressure. And it's really important for us to be able to confront that and to be able to eat that fear and say, look, we can plan for this and there's a solution to this problem. And I want to encourage everybody in attendance, if you're experiencing that feeling as you were trying to cast a vision of, okay, what would that look like if I was really ill. Somebody had to take me for medical treatment. Family had to look after me. How would that make me feel? You may end up leaning into that and being, oh, my God, like, that really makes me uncomfortable. And that's part of the purpose of today, is to create some discomfort, to say, look, we'd rather have you a little uncomfortable while you're healthy and well, and then put a plan in place to make sure that you're prepared, God forbid, if the unthinkable happened and you experience cancer or some critical illness condition that would have a severe financial impact. And so thank you for putting that context to it, Laurie. I think it's really important for people to visualize.

Thank you. Thank you. And so if you said family or friends, you are absolutely correct. And oftentimes, guys, it is your spouse that will be the one to take you to your cancer treatments. And so it's not just the loss of one income, your income, it's the potential loss of both incomes. And if you lose that family income, where does the money come from to maintain all those expenses that we just talked about and all these additional medical expenses that come up as well? So what are some ideas? Where would the money come from if you lost that family income?

I have a critical illness policy for 100,000. Would that be enough? Excellent. Policy loan. So that coincidentally, Jonathan, yourself and I and our teammates were talking about that before we started today's call. Emergency fund saving, fundraising, cash out investments. I have some critical illness.

Excellent, Excellent. Thank you. So, absolutely all correct answers. The first one that we generally hear of is family. My family will help. And you're right, your family will help as much as they could help. But can your family cover your total income for six, eight, nine months, one year or longer? Probably not. They're going to want to help and they'll do the best they can. But there may not be enough there to help you weather that storm for a significant period of time. The next one I hear is savings. Okay. And we all know we should have that three to six months of income sitting in our bank account. But many Canadians do not have that amount saved up in their bank account in liquid cash. The third one that I see on there is loans. So not policy loans, but bank loans. And of course, banks want to make sure you have an income if they're going to grant you a loan. And of course, if you're diagnosed and you're going to be off work for six months to one year, you're not going to be able to meet that income. Requirement to get the loan. Okay. Another one is I'll take it from my investments, specifically from my RRSPs. Right? I've worked hard, I've saved, I got a significant amount in my RRSPs. I'll just take it from there. What are some of the disadvantages if you dip into your investment options, your RRSPs, what happens when you take that large lump sum out of your RRSPs? So again, taxes, right? The withholding tax. First of all, you've got to take out a much larger lump sum to net the amount that you need. And then come tax time, because they didn't take enough tax, you are going to owe taxes right at the end of the year. And currently it's tax time right now. Where does the money come from to pay that tax bill at the end of the year, you're dipping into your savings again. And it becomes this endless revolving cycle of dipping into the RRSPs. And we're saving our RRSPs so that we can live and have a wonderful, comfortable retirement. If I dip in and take one or two years of my income out of my rrsp, I'm going to lose that growth value. So outside of the tax, I'm losing the growth value that I would have in my RRSPs, and I'm saving hard sacrificing today to make sure that retirement is comfortable. But by taking out that lump sum today, if we just use the example of $100,000 today.

By the time I get to retirement age, I've lost the growth on that 100,000. I'm not just losing 1,000, I may be losing 4000-005000-00600,000 or more. And if I get to retirement and there's not enough in my retirement account because I got sick and I dipped into my RRSPs, what could happen? Well, I may have to work longer, right? It may not be Freedom 55 or Freedom 65. I may have to continue working because I don't have enough retirement account. It could be that, you know, I fought and I beat cancer, but when I get back to work, I had to start saving more just to catch up from that large lump sum withdrawal. The third thing could happen is as I get to retirement, there's not enough in my retirement account for me to do all the things that I wanted to do in retirement. Okay? And that may be more devastating than the actual loss of the money itself because you have these dreams for yourself. You're saving and sacrificing today so that you can do the things you want to do in retirement and live comfortably in retirement. But you were diagnosed with a serious illness years prior and you had to take out the lump sum from your RRSPs, Critical Illness Insurance there to help you weather that financial storm, to make sure, number one, you can cover all your monthly bills, that you've got that large lump sum available to you for all those additional medical expenses that come up. But it can also ensure your retirement and keep you on that path, saving for retirement so that you can fulfill your dreams in retirement. Critical illness insurance is the one that puts the cherry on the top of the cake. It's going to make sure that you've got that large lump sum available to use, however you need to use it when you're diagnosed with a very serious critical illness. I do have a case study to show you. Jason, did you want me to jump right into the case study or just.

Yeah, absolutely. And, you know, before we dive into that, I do want to say again that framing this up, it's really important that. And we share this with clients all the time, that unless you understand the problem, the solution just won't matter to you. And I think that you've done a great job framing up the problem. And I want to share with all of our clients that we've done some fairly extensive research in narrowing down the provider in critical illness in that area in particular. And Desjardins, we were very, very pleased with, following all of our due diligence. There are so many other carriers that provide great solutions. There are many other great solutions out there. But there's a reason Desjardins is here with us today, and that is a result of the extensive research that we've done.

This was me before the heart attack. I was a pretty active guy. I was playing hockey sometimes two, three times a week. Got a big golden retriever that, you know, needs to go out three times a day. Financially, I was doing okay. My wife and I were fine. We didn't worry about stuff. We never saw this coming. Having a heart attack is no fun. The associated complications after just turns your world upside down. During my cardiac recovery, the optic nerve in my left eye has a stroke. You know, talk about adjustments. You know, losing vision, it's been difficult. Yeah. Playing guitar is one of those things that got me through a long, long stay in the hospital. For me, it was good therapy. We were never insured for anything like this to happen. Stuff like that catches you by surprise and you're unprepared.

You're sitting there and you go, man, I Got no money, I got no job. So I gotta learn something new.

After two years of not working, I decided to go back to school. There's actually a course that's taught about guitar repair, design. Trying to look on the positive side of things. If I was gonna go back in time, I would have a fail safe system like insurance. It's not something I focus much attention to. I didn't have a plan B, but there's hope.

Okay, so let's plan. Expect the unexpected and plan for the unexpected. But we, you do have to put up a disclaimer. The information that I talked or that I present today is for information purposes only. No one should act upon examples or information without a thorough examination and discussion with your ascendant team.

So Dave's story. We just watched Dave's video and some things that come to light from Dave's story. He never expected to get sick. He never expected to have a heart attack. He never expected that something like this would happen and he would be two years out of work. No, as David said, no money, no job. All these additional medical expenses had come up for Dave. And he also had to make some pretty tough decisions after being off work for so long. He had to make a decision whether or not to go back to school. And I don't know about you, but if I'm in my 50s, that decision I think would be gut wrenching for me. Do I go back to school or what are some of my other options? And he did say he thought he was the picture of health. He played hockey, he walked the dog three times a day, and he didn't have that plan B in place. Nor did he think that something like that would happen to him.

And clients often do think it's not going to happen to me. But even if there's no history of heart disease in your family, it could still happen as it happened to Dave, as it happened to my friend who just suffered an aortic aneurysm at 49 years old. There was no cardiac issues within his family and he suffered a pretty major, very serious heart issue.

Nine out of 10 Canadians do have at least one risk factor for heart disease or stroke, and it is inflicting young people as well. One in 12 Canadians above the age of 20 are living with cardiac conditions. And cardiac heart disease is the second leading cause of death after cancer for women.

And if that was to happen.

45% of Canadians living between the ages of 35 and 49 have no emergency savings. They don't have that backup plan place.

And if you get sick or if you know someone that gets sick and they don't have that backup plan, that financial stress is going to delay their recovery. Now here's some very interesting claim statistics that I thought I would share with you. The number one, these are Deserdins claim statistics over the last 17 years. The number one illness or the number one reason why a client would claim on a critical illness contract. Cancer. 66% of all claims received are cancer, followed by cardiac disease. Heart attacks, 13% of all claims. And then you can see all other categories. Many critical illness contracts do cover 25 or 26 different illnesses. But the two largest claiming illnesses, cancer and cardiovascular. But also the average claiming age are those in between. Sorry, the average claiming age is 49 years old. Now that seems young. The largest claiming group you can see on the graph are those in between the ages of 50 and 59. Before percent of all claims received on children. And that brings the average age down to 49. We also have a difference between claims paid from our female clients versus our male clients. Female clients, 81% of all claims received.

Cancer. And oftentimes the two most claiming illnesses are breast and ovarian cancer, followed by a much smaller percentage claiming for cardiovascular disease. But we certainly know that that's on the rise in Canadian women. For our male clients, 50% of all claims received are cancer, followed by a much larger percentage claiming on heart disease. Cardiovascular issues.

In Dave's story, if we analyze what Dave said, he had to dip in to his retirement savings. Now, Dave sacrificed and he did a lot of planning. He was saving in his RRSPs and he was also contributing to his TFSAs. And you can see on the right left hand side of your screen there, if Dave was to stay on that path.

What he would have in his retirement account. And in here we're using a growth factor of about 4% rate of return. $15,000 annually into his RRSP contributions and $5,000 annually into his TFSAs. And Dave was making those sacrifices to make sure that he would have a comfortable retirement.

But Dave suffered the heart attack and he mentioned to you that he had to take out in year one $80,000 out of his savings account, his TFSA. And then in year two he had to take another 80,000 out because he still wasn't back to work. He didn't have that income and his bills didn't care because he got sick. Right. The bank still wanted to get paid, still had to buy groceries and all those sorts of things. And those additional Medical expenses that come up. So in scenario one, scenario one is showing if Dave had to stay on that path, retirement scenario two, Dave has the heart attack at age 55, at age 56. And by taking out that $80,000 in two separate years.

There is a loss of about 482,000 in Dave's retirement account.

And Dave had to decide to go back to school to find work because he was not going to have enough in his retirement account. Now, if Dave had a plan B in place, a critical illness policy, for example, he would have had access to that large lump sum, number one, to cover that loss of income, number two, to cover all those additional medical expenses that came up. It could have had a. It would have had a lump sum available to pay for the educational costs of going back to school. It would have saved Dave's retirement so that he could have still retired at 65. And that's the power of critical illness insurance. It's there to ensure your retirement. It's there to ensure it reduces your financial stress when you're already dealing with a devastating blow, right? You're diagnosed with cancer and you lose your income. That's how a critical illness plan can help you because it will give you that large lump sum to provide choice.

Now, the Ascended team does have access to a calculator that Deserdan offers. It's the critical illness impact calculator. It's new in the industry. This particular calculator will show you the three scenarios to determine is a critical illness policy right for me? And it will use your information, what your hopes and dreams are, what your retirement plans are. It will also run through if something happened and you were diagnosed at a certain age. It will show you if you are diagnosed with an illness and you don't have a critical illness plan, what is the impact going to be on your retirement. It will also run through if you're diagnosed with an illness, but you do have a critical illness policy, specifically with return of premium on cancellation. And then number three, if you remain healthy, right? You're one of the lucky ones. You are never diagnosed with a serious critical illness, but you do have a critical illness policy with return of premium on cancellation. How will that impact on your retirement? And so the. If you're interested, the Ascendant team could run this projection for you using your data. And I particularly like the third page, the largest page, showing the graph of those scenarios showing you what the impact could be to save your retirement so that you don't have to dip in to your retirement account. Now With Desjardins, we offer a whole suite of critical illness solutions to match any budget. And we've got the term options that's on the left hand side of your screen. We've got the permanent options and the quick pay options so that you can pay up those premiums before you hit retirement. We also have child options as well. And of course Deser Dan does offer one of the best child critical illness plans in the market today. It is permanent critical illness paid up in 20 years. And again we put it in place while the child is young and healthy. But they're going to carry that coverage with them into the future and the parent and the grandparent has that coverage paid up for them. We also offer business solutions. We offer critical illness for business owners to protect the business in the event the business owner gets sick and has to step away for six months, eight months, one year, it's a cash infusion to protect the business. But it is shared ownership with the business owner that if the business owner remains healthy, they do get 100% of all the premiums paid, including what their company paid, which is the lion's share of the premium, and they get that back tax free.

Now if we take a look at Dave, the two options I would recommend for Dave is a term to 65. So that would be option number one. Dave would be age 50, he's a non smoker. We would want to make sure that we cover at least two years of income. So we're going to use $160,000 critical illness policy. Now, the premium on that is.

$594 a month. And that's not small change, but we're going to add return of premium on cancellation on this policy. And what return of premium on cancellation means is if Dave is one of the lucky ones, he never has a critical illness. He gets to the age 65 without having to claim on his policy, he gets 100% of all the money that he paid into the plan back and he can use that money for retirement. So it's kind of like a savings account. You're going to cover the risk while you are working. And then if you no longer need the coverage, okay, and in this particular example, at age 65, he will cancel it and get all his money back. And we'll add return of premium on death as well. That if Dave passed away before claiming on a critical illness contract, there would be a death benefit for Dave's family. And this particular product, it is convertible to a permanent product. If Dave's needs change and he decides that he would like the coverage well past the age of 65, he can convert it into a permanent option to keep the cost lower to cover Dave's income earning years. We could also go with a term Solution again for 160,000. The premium is significantly lower at $159 a month. There is no return of premium on cancellation available for this particular option. But Dave again can convert that into a permanent option later on with return of premium on cancellation if he chooses to do so. Or he can let that plan go after the 10th year year and at least he covered off the risk during his working years. He saved his retirement. Remember, Dave had that heart attack at age 56. He would have had that lump sum available so that his RRSP would not have been impacted in his TFSAs. And so having a critical illness solution in place is going to help you ensure your retirement goals. All those hard sacrifices that you're making today, making sure that there's a lump sum available, expect the unexpected, but plan for the unexpected. That lump sum will be there to help you if you're ever diagnosed with a serious illness. And by helping yourself, you are helping your family.

Thank you. Jason, back to you.

That was awesome.

Awesome. Thank you so much, Laurie.

Really, really good. One of the things that I will share is some of the feedback that we receive in these discussions because we've really placed an emphasis on having these conversations as of late and we'll continue to do that routinely going forward.

Some of the common feedback is, okay, when I apply for a critical illness policy, do I have to go through the same underwriting process or application process that I would for a life insurance policy. And of course there is medical underwriting that's involved in the critical illness space, much like life insurance. The critical illness space a little bit more extensive in terms of medical underwriting. But there is an application process. There's health questionnaire. There may be medical evidence that the insurance company itself wants to gather in the way of blood sample, urine sample, whatever that may be, attending physician statements, et cetera. But there's no expense associated with applying a question that we have for all of our clients is, is there any disadvantage to you having a critical illness policy in place? If so, let's explore that. Let's understand the reasoning there because it only represents an advantage. One of the things that our advisor team will do is connect with all of you clients who are in attendance and for clients who are logging into the client portal and watching this presentation. Your advisor will be having a conversation with you proactively to talk about critical illness coverage. Laurie, thank you so much again. That. That was excellent. We really appreciate having you here with us. Yeah, I was just going to mention that you obviously anticipated to share about the underwriting there, because as you were saying that how do you know what's enough and what is the best advice to get started in putting a plan in place?

Yeah, absolutely. And of course, that would be a discussion with your advisor at Ascendent. My recommendation would be take a look at at least covering 1 to 2 years of your income. Okay. But it doesn't mean you have to take that amount. It's going to be a discussion as to what you would be important. And of course, you can customize the amount to make sure that you can fit it within your budget as well. Also, you're going to hear from Jonathan Lee about disability insurance. And so if you can get that foundational plan in place first, then perhaps you don't need to take one to two years of income on a critical illness policy because the two contracts really do complement one another.

Yeah, very good point.