You find a goose that lays golden eggs. Which do you insure - the goose or the eggs? Actually, you are your own golden goose and you need to insure yourself.
You depend on your paycheque to cover monthly expenses, as well as fund your savings account, education costs, retirement plans, etc. So what would happen if you suddenly had a debilitating accident, or fell sick, and could no longer work?
There are many answers that can be given to this question. Here are the most common ones we hear.
Ask yourself, how long will the business continue to pay you? How much will they pay you? At what point will your employer need to hire a replacement for your position? Can the business actually afford to pay both?
If you saved just 10% of your income each year, in just one short year of disability, your savings would be wiped out. Can you afford that? Would you rather those savings go towards something greater, such as retirement, or education for your children?
Can your spouse earn enough money while staying by your side? Can they be a partner, parent, caregiver, and an employee - all at the same time?
Will they have sufficient funds to help you, and are you prepared to put the burden of your expenses on your family or close friends?
Without an income, which institution would be willing to lend you money?
Most likely, a sale under force conditions will not bring true value to your investments.
To qualify for this, you must sustain a severe and indefinite mental or physical disability and be unable to work at ANY occupation. You could very well be among the applicants who never collect a cent, and there is no guarantee that all your expenses will be covered if you do receive this.
I’ve taken a proactive and preventive approach to an unexpected accident or illness and know that I will be financially prepared to handle expenses while unable to work.
In the unfortunate event that your significant other was to pass away, what would happen then? Let’s take a look at an example of what could happen to your income in this situation.
Ex. A couple makes $110,000 a year - $45,000 from him, $65,000 from her.
He passes away.
She has just lost her husband.
She has now also lost $45,000 a year towards her household income.
She needs time to grieve. How much time can she take off work for this?
Since employers are only required to pay her 3 days of wages, she may need to take a lay off and EI may or may not approve this. If EI does respond, they will only provide up to 55% of her gross monthly income, capped at $573/week, for a maximum of 15 weeks.
This widow has now quickly gone from a (take home) monthly income of $7,026.00 down to $2,292.00 - while grieving.