Commentary - Hans H. Mathisen
What will happen to your dreams? -
LIFE LETTER for May emphasizes
the importance of Critical Illness Insurance. This relatively new
kind of coverage can, and will pay the bills if or when the unexpected
happens. A lump sum is paid the insured within weeks of the diagnosis
of the critical illness..
Where will the money come from? - The June issue of LIFE LETTER deals with Disability Insurance. While Critical Illness Insurance only kicks in when the insured attracts any one of 23 "dreaded diseases". Disability Insurance pays when we are unable to work because we are sick or injured. A monthly benefit is paid to the insured until he or she is able to return to work, to a maximum of five years or to age 65, as specified in the contract. (Please note: It is reasonable to expect that an insured who has both these types of coverage can and will collect from both policies).
LIFE LETTER MATURE - Many will find the information on When to start receiving CPP and Top Retirement Tips helpful. The bottom line is: Plan ahead and follow your plan.
THE STOCK MARKETS - As of May 31,2006, the TSX Composite Index is up 4.19% for the year. The Dow Jones is up 4.21% year-to-date; S&P 500 is at +1.75%; NASDAQ is at -1.20%. The major European indexes are up from a low of 1.87%(London) to a high of 5.26% (Frankfurt). In Asia, the NIKKEI Index is down 1.56% year-to-date, while Hong Kong's Hang Seng Index is up 6.60%.
In Canada, what the market correction analysts had predicted would happen in March, actually took place in May. The TSX composite Index had a tough time in May, when a sharp drop in commodity prices cut 3.75% from the main index during a two week period. Now, we're but three weeks away from the First Day of Summer. And once summer is here, we can look forward to the summer rally.
What will happen to your dreams?
High school sweethearts Trevor and Lisa were establishing a life together. In their late 20's, they were setting goals for themselves and their two young children. Trevor had a dream of becoming a police officer. Then the nightmare began.
A few years ago, Trevor had a small, cancerous mole removed from his back. He hadn't given it much thought until he found a lump in his armpit. His doctor delivered the devastating news that his cancer was back and had spread to his liver. He was given only a few months to live.
Trevor was soon confined to a wheelchair for most of the day and has extremely limited use of his left arm. As he cannot work, his group disability insurance is paying him a monthly benefit, but it all goes to their regular monthly expenses. He travels for over two hours, one way, for medical treatment not available where he lives. They ran up over $3,000 in travel and hotel expenses in one month alone. Their life savings were quickly wiped out.
Lisa has taken a leave of absence from her job so she can attend to Trevor's needs, and this has placed them under additional financial strain. She had planned on going back to school to pursue her dream of getting her master's degree, but doubts she'll be able to with their savings gone and debts piling up.
Their son. Brent, had to give up playing hockey and baseball. Michelle, their daughter, withdrew from her martial arts lessons and had to quit her ringette team.
Trevor just wants to spend as much time as he has left with his family. They chose to home school Michelle and Brent.
The Canadian Cancer Society reports that this year over 130,000 Canadians will be diagnosed with cancer. The Heart And Stroke Foundation estimates that more than 150,000 Canadians will have a heart attack this year. Survival rates are improving.
There is a better way to deal with the financial turmoil that arises when someone suffers a serious illness like cancer, heart attack or stroke. It's called Critical Illness Insurance. It helps people get on with their lives by giving them the financial resources to maintain the lifestyle and independence they had before they got sick.
If you contract one of the diseases or conditions specified in a Critical Illness Insurance policy and satisfy a waiting period, you receive a lump sum of up to $2,000,000. The exact amount, of course, depends on the coverage you choose. Critical Illness Insurance pays a benefit even if you are still able to work and can cover a long list of illnesses and conditions. Partial benefits may also be paid in some situations. Ask your insurance advisor for details.
There are no restrictions placed on the use of an insurance payout. It's up to you - pay-off debts; seek medical treatment in another country; pay for extra medical expenses; take a vacation or time off work; replace lost income; modify your home or vehicle if necessary; maintain your independence.
Want to know more about Critical Illness Insurance?
Hans Mathisen today at (306)242-7042.
Copyright © 2006 Life Letter. All rights reserved
Where will the money come from?
What are the first questions you'd ask yourself if you couldn't work because of illness or injury? Would any be about money, like where to get enough to pay for food, housing, and other basic needs?
For most of us, our ability to earn an income is our most valuable asset. It's also the most vulnerable. Death can destroy it, totally eliminating our earnings for our dependents. However, a serious disability can be worse still, wiping out our regular earnings for both our dependents and ourselves.
Statistics tell us one in three Canadians will suffer a disability lasting at least 90 days during their working life. Many assume that most disabilities are caused by accidents. The facts say otherwise. Even at the high-risk age of 25, only 46 of disability claims are accident-related. By age 45 it's down to 25, and a mere 12 by age 62. Because less than one in sixteen of such accidents occur in the workplace, few are covered by Workers' Compensation.
If you become disabled, where will you get the income you need?
If you've been paying for Employment Insurance, you may qualify for its disability benefits. When the benefits run out after a few months, you can apply for Canada Pension Plan disability benefits. The exact amount you will get from each of these government programs depends on how much you've been paying in and for how long. But even at their top benefit levels, you'll need another source of income to afford more than the barest necessities.
Do you have enough personal resources to support you and your family for an extended period of time if you become disabled? How long will your savings last? Would a bank be willing to lend you money if you could not repay the loan?
Another possible source is your job. Many employers have disability coverage in their group benefit package. But will it be enough? Most plans have a limit to how much they will pay and for how long. You should also find out how disability is defined. Some say you must be unable to earn an income at any occupation to be considered disabled.
Most banks offer disability insurance on their mortgages. However, they only cover the mortgage payments for as long as the insured is disabled. The same coverage is available on some loans. Again, only the payment is covered. Benefits are usually only paid in the event of a total disability.
A disabling injury or disease that lasts too long can be catastrophic. The principal breadwinner of a family, instead of being a major source of family income, becomes a drain on its remaining resources. And these resources may already be strained by other family demands.
If you become sick or hurt and cannot work, how will you pay your bills? How long will your savings last? Who will support your family? Can your family support you? Can you afford your present home? If you do not have satisfactory answers to any of these questions, you should consider disability insurance..
Want to know more about Disability Insurance?
Call Hans Mathisen today at (306)242-7042.
Copyright © 2006 Life Letter. All rights reserved
Mutual confidence is the power that binds together all harmonious human relationships.