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What Comes After "What If?"

12/20/2016 08:05 EST | Updated 01/04/2017 01:26 EST
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Happy asian mother, father and twins child in the park.

A major component of growing up and managing your own family is having tough conversations. Nobody loves them and we all try to avoid them, but the truth is talking about the tough stuff is necessary to your family's overall well-being.

I've previously written about some of the important things to know and consider when it comes to planning for your future, but how do you share these insights and move toward a plan of action with your partner?

Discussing a roadmap to protect your loved ones in the event of something terrible like a serious illness isn't easy, but it's important. A great way to take some of the pressure off is to consider some of the key factors at play, so you feel armed with the right information before you sit down with your spouse and then an adviser to discuss next steps.

1. What types of insurance do I have?

Insurance policies aren’t one-size-fits-all, and the same goes for products when it comes to an unexpected injury or illness. Life insurance can support your family if you pass away, and disability insurance works to supplement some of your income in the event of an extended absence from work – typically 60 to 70 per cent.

However, both types of insurance may leave a gap in coverage that critical illness was designed to manage. Critical illness insurance provides you with a lump sum cash payment to help cover the costs associated with surviving a life-altering illness. I wrote about the key differences between disability and critical illness insurance in this post.

2. What do my savings look like?

We’re all taught to save for retirement, but what about saving for an unexpected illness which can take a serious financial toll? If you had to withdraw from a savings account or RRSP to cover costs if you or a loved one became seriously ill, what would happen to your plans for the future?

A recent study by Head Research commissioned by Great-West Life found that three in five Canadians would need to delay retirement, go into debt or downsize their home in the event of a critical illness. You can use the funds from critical illness insurance to transfer some of the financial risk of a critical illness off your plate and help you manage a sudden event without derailing future retirement plans.

3. What kind of support do I have?

Some of us are lucky to have resources in our lives like a parent or sibling to rely on in the event of a sudden and critical illness. The extra set of hands could be a real help – someone to take the kids to school and pick them up again, or even prepare meals.

However, this isn’t always possible and it may not be a viable long-term solution if you’re recovering over an extended period. In this situation, bringing in additional help like a nanny or a care giver can help shoulder some of that responsibility. Critical illness insurance can provide financial support to help ensure you have the support needed during your recovery.

4. Do I plan to work through my own or a loved one’s recovery?

How quickly would you have to return to work after a life-saving medical procedure, and what are the consequences of cutting your recovery time short? What about caring for a loved one during their recovery period – how much of your time could you dedicate to this? Having a flexible work environment can help, but it simply may not be enough. It’s better to have the financial freedom to manage the situation as you see fit, rather than having it dictated to you.

For more information on how you can prepare to play an active role in the preparedness conversation, visit criticaluncovered.ca.

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