Your Most Valuable Financial Asset

Preamble: The objective of this brief paper is to help you understand how to protect your greatest worldly asset on behalf of your family and your business, if you own one. The greatest asset that is referred to in this paper is your ability to earn income. Three major things that reduce or eliminate your ability to do this are illness, disability and death. The following statistics are gathered from sources listed at the end of this paper and are current to Dec 31st 2018.

  • 5.9% of deaths occurred from unintentional injuries (accidents).
  • Every 40 seconds someone has a heart attack.
  • Every 40 seconds someone has a stroke.
  • Every 40 seconds 82% of people having heart attacks and strokes survive.
  • Today, over 100 million people in North America are living with some form of cardiovascular disease or the after-effects of stroke.
  • 70% of open-heart surgeries are coronary bypasses.
  • Approximately 1,896,800 new cases of cancer were diagnosed in 2018 (440 per 100,000).
  • There were approximately 17,000,000 cancer survivors alive in 2016.
  • There has been a 50% decrease in deaths from heart and stroke since 1950.
  • In Canada… 1 in 4 will contract heart disease, 1 in 3 will develop life threatening cancer.
  • In Canada… 1 in 4 will suffer kidney disease.
  • Multiple Sclerosis is the most common neurological disease among young adults.

Cancer, Heart Disease, Stroke, Kidney Failure and Multiple Sclerosis are some major illnesses that are listed above. The following illnesses are also major afflictions to our well-being: Aplastic Anemia, Bacterial Meningitis, Benign Brain Tumor, Blindness, Coma, Deafness, Dementia, Loss of Speech, Loss of Limbs, Major Organ Transplant, Motor Neuron Disease, Occupational HIV Infection, Paralysis, Parkinson’s Disease, Severe Burns.

There is a statistic listed in the first bullet above that doesn’t belong. It tells us that under 6% of deaths result from accidents. This means that over 90% of deaths occur as a result of an illness. And statistics show us that due to modern medicine and many other reasons, people survive a long time after the diagnosis of an illness.

So, wouldn’t it make sense to buy insurance that pays you a tax free, lump sum benefit 30 days after you are diagnosed with one of the illnesses listed above? Wouldn’t you rather have the money to help you with your quality of life?

I believe that there is still a need for life insurance and also for accident and disability protection. There are economical ways to combine plans to cover all risks. The point that this discussion makes is that you are many times more likely to receive a benefit from an illness insurance policy than from any other type of insurance.

Critical Illness Insurance can be structured to pay a benefit of up to $2,500,000 to you, lump sum, tax free, 30 days after the diagnosis of a covered illness. It can also be structured to give you all your premiums back if you don’t need the coverage in the future and cancel the policy. So, it turns into a guaranteed 0% return savings plan and the insurance has been free. If you own a company, you can turn it into a product that produces a better after-tax return than a 8% GIC compounding annually.

Benefits were paid to the following age groups in 2018*

Ages 0-17   ———– 1.6%

18-29——————2.8%

30-39——————12%

40-49——————34%

50-59——————37%

60+ ——————-12.6%   (This number is low because very few people over 60 own this protection)

Sources gratefully acknowledged:

Health United States 2017

National Cancer Institute

American Heart Association

American Stroke Association

National Vital Statistics Reports

Heart and Stroke Foundation of Ontario

The Kidney Foundation of Canada

The Canadian Cancer Society

The Multiple Sclerosis Society of Canada

*Industrial Alliance Financial Group