When buy­ing a crit­i­cal ill­ness pol­icy could make sense

The Hamilton Spectator - - BUSINESS - DAVID HODGES TORONTO —

It was about eight years ago that Brooke Robin­son bought a crit­i­cal ill­ness in­sur­ance pol­icy due to her fam­ily’s his­tory of breast can­cer, only to trig­ger it six years later for an en­tirely dif­fer­ent and un­ex­pected rea­son.

“I ac­tu­ally ended up with mul­ti­ple scle­ro­sis and it was a very ag­gres­sive ver­sion of it,” says Robin­son, 33.

“I was di­ag­nosed in April of 2015 and by Oc­to­ber of 2015 I was walk­ing with a cane.”

To­day, she cred­its her crit­i­cal ill­ness pay­out for al­low­ing her and her hus­band to take three months off work so they could move from Toronto to Ot­tawa where she un­der­went an ex­per­i­men­tal pro­ce­dure that has al­lowed her to walk again with­out as­sis­tance.

While Robin­son’s work­place dis­abil­ity in­sur­ance made up for some of the cou­ple’s lost in­come, she says it wouldn’t have been enough to cover the $15,000 of ex­tra ex­penses they in­curred.

“With­out the treat­ment I had, I would be in a wheel­chair right now and I wouldn’t be able to work or be in an of­fice,” she says. “It would have been a dis­as­ter.”

Crit­i­cal ill­ness in­sur­ance may be ef­fec­tive at cov­er­ing costs that dis­abil­ity in­sur­ance doesn’t.

Fi­nan­cial plan­ner Rona Biren­baum says the most com­pelling rea­son to buy a crit­i­cal ill­ness pol­icy would be if some­one isn’t el­i­gi­ble for dis­abil­ity in­sur­ance — for in­stance, a stay-at-home par­ent who doesn’t have an in­come to re­place.

But it could also help some­one un­pre­pared for the fi­nan­cial hard­ships that may come with a crit­i­cal ill­ness di­ag­no­sis such as the cost of med­i­cal treat­ment or for a spouse to take time off work.

Un­like dis­abil­ity in­sur­ance, which pro­tects your in­come to age 65 and gen­er­ally kicks in af­ter 90 days of dis­abil­ity, crit­i­cal ill­ness in­sur­ance pays out a lump sum in the event of crit­i­cal ill­nesses such as can­cer, a stroke or a heart at­tack.

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