It’s always sad to read the stories behind crowdfunding campaigns to help families of sick children. Cancer, cerebral palsy, cystic fibrosis … Parents are worried, they have postponed their lives and their financial situation is precarious. Is critical illness insurance the answer?
Posted at 6:30 a.m.
Unfortunately, it is not true that this only happens to others. Others could be us. Parents of seriously ill children can attest to this.
And despite our comprehensive healthcare system, a cancer diagnosis comes with a host of costs. Parents who must be absent from work to be at their children’s bedside are no exception: lost wages, transportation, parking, meals in the canteen, work to adapt the home to a wheelchair, and medications not covered by the Régie de Quebec (RAMC) health insurance. They will probably also need household help, for cleaning, meals, and care for other children.
There is an affordable way to avoid the financial turmoil that a serious illness can cause, says Antoine Auger, financial planner at IG Wealth Management. You can insure your child against serious illnesses, an option that parents often do not think about, or voluntarily exclude.
“A lot of people say that paying for this type of insurance means admitting that their child may be sick. As if it brought misfortune. Others think that insurance companies are a scam,” notes Antoine Auger.
I don’t know if life insurance carriers die younger, but I can understand the insurers’ distrust. We’ve all heard stories of endless struggles to make money. In order not to be disappointed and to gain confidence, “the most important thing is to understand this kind of politics,” insists Jeffrey Morrow, a financial security consultant at Desjardins, while ensuring that the employer “hands over a lot of checks.” The Autorité des marchés Financiers (AMF) also recommended in 2021 that insurers better explain the product, which is often misunderstood in Quebec.
What you need to know is that the list of predetermined diseases, to which injuries are sometimes added (serious burns, loss of a limb), is covered.
In Desjardins, for example, the list has 29 conditions and more can be added as an option. Those for Canada Life, although different, cover roughly the same number. The goal is to cast a wide net, orphan diseases are not covered. Too bad, because they also cause significant costs. As for cancer, it should be ‘life-threatening’, excluding ‘malignant melanoma’ for example. Do these specifications cause fights? Not really, because the contracts are detailed, I’m told.
Important fact: Insurance does not cover expenses caused by illness. During the diagnosis, a non-taxable amount is paid in one lump sum (with some exceptions). It can be used as desired by the parents.
Like life insurance, critical illness insurance can be permanent or long-term, and is an affordable option. Thus, you can insure your child for 10, 18 or 25 years, for example: “90% of the insurance I sell to my clients is temporary. It’s inexpensive and does the job. ! Says Antoine Auger.
When budget is an issue, he recommends choosing a shorter duration, but an amount large enough to have a big impact. Because the goal of the police is to reduce financial stress in bad times.
Instead of getting permanent insurance for the small amount of $25,000 or $50,000, I’d rather have my clients get insurance for the big amount.
Antoine Auger, Financial Planner at IG Wealth Management
“What makes the difference? I think a million in a bank account that allows you to better handle your new reality is more than $25,000,” explains the financial planner.
In Desjardins, the “Health Priority – Children” insurance is always mandatory. The cooperative does not offer any temporary protection.
The advantage of this type of font: It can be practically free. We pay for it for 20 years, and if it is not used, we are reimbursed for all premiums paid. In fact, we are only depriving ourselves of the return that we would have had if the money had been invested.
A child who has become an adult can also choose to keep their insurance for the rest of their life. In this case, he will not be compensated, but will remain covered without paying a penny. This policy may be beneficial because dementia, Alzheimer’s disease and Parkinson’s disease are among the diseases addressed. The heirs will benefit from the death premiums compensation, if no claim is made.
Before getting permanent insurance for a child, Antoine Auger believes you should “maximize your RESP, RRSP and TFSA and not have any debts.” Because it makes sense to invest the premium gap elsewhere. As always, it is important to consult an expert to assess your needs, compare policies and make calculations.
One thing is for sure, however, is that you pay your insurance without ever claiming…