Peter Boys, Boys Financial Services

Insurance Protection for Single Parents, Housewives, Contract Workers and Farmers (Part 2)

insurance

 

Continuing from last week, let’s review the importance of more insurance options for this cohort of people.

Critical illness insurance: This pays out a lump sum if you are diagnosed with life-threatening illness such as cancer, heart attack or stroke that is covered by the policy. Subject to certain conditions such as surviving for a specified length of time, the lump sum is paid to you after diagnosis of the condition, and can be spent any way you wish.

Let’s consider Heather, a single mother, and Owen, her eight-year-old son. Heather was diagnosed with breast cancer and had to take a leave of absence from her job. Her disability plan through her employer paid three months of income replacement, but she was off work for more than a year.

Fortunately, she had a critical illness insurance policy, and received $100,000 from that. This allowed her to hire extra childcare, pay down her mortgage and keep up with overall expenses for herself and Owen while she was taking treatment. Having the extra money meant she didn’t have to dip into her retirement savings.

Critical illness protection for your children: Let’s say Owen is the one who was seriously ill and Heather needed to leave her job, her only source of income, to care for Owen full-time. The lump sum from the critical illness policy can replace Heather’s income, be used for drugs not covered by health plans, and providing cash for living expenses.

Accident insurance: Accidents happen every day. We can’t predict when or if they occur, so it’s best to be prepared. This is where accident insurance comes into play. A serious accident could affect your ability to work again. Again, it may be wise to get accident insurance for your children, to help pay the bills if your child has a serious accident and you needed to leave your job to take care of him or her.

Life insurance for your kids: Life insurance for children is inexpensive, costing less the younger a child is. There are a couple of options for insuring children. One is to add a Child Protection Rider to your existing insurance policy, typically $10,000 of coverage for only $2 per month. These expire at age 25, but come with the option to buy additional insurance before expiry regardless of their future health or lifestyle. Another option is for parents or even grandparents to purchase an individual policy, providing affordable permanent coverage for children or grandchildren. If properly funded, some policy types can build significant cash value that could be used to help fund post-secondary education.

Be sure to sit down with a trusted life insurance professional and consider all of the options that are available, and to put together a protection package that’s appropriate and affordable for you.
Image licensed through Shutterstock

Leave a Reply