Health insurance of growing importance to investors

This is the second segment in a look at insurance from an investing perspective.

Various kinds of health and care insurance are of growing investor importance. Disability and critical illness insurance can be of real value to investors building a savings or investment portfolio and who need some protection from premature withdrawal of funds as a result of a prolonged illness or disability.

The real value of a disability or critical illness policy (and assessing if the premiums are worth the coverage) depends on a clear understanding and knowledge of exactly what your coverage is and the claims qualifications and conditions. For instance, it is important to know how the policy defines disability. The insurance can initially define a disability as a person’s inability to do work for which they are trained and qualified. But there is usually a time limit. After two years, the insurance coverage may be limited to your inability to perform any kind of work at all. The reason for the disability — accident or illness — may also be specifically defined in the policy. The cost of a disability policy also depends on the wait period — up to 180 days — before the first disability cheque arrives, and for how long the benefit can be expected to last.

A critical illness policy defines very specifically what illnesses or diseases are covered by the policy and the lump sum you will receive. Payment is made usually within 30 days of a claim’s acceptance after a physician confirms the diagnosis. From an investor’s point of view, critical illness insurance can have distinct advantages. The prompt, one-time payment has no restrictions on how it’s used. It could pay debts, take items off the “bucket list”, be invested or used to finance medical treatment. Some critical illness policies will return paid premiums if the contract is surrendered without a claim.

Long-term care insurance is another protection option. It covers the cost of in-home or institutional care for the insured and protects against the financial hardship of maintaining a loved one in an assisted-care facility for a long period of time. The value of this type of insurance depends on the details of the policy and on the circumstances of individual investors.

Insurance can be an important part of any investment strategy, especially if it means you’re able to sleep better at night. Investors need to be perfectly clear on how their insurance protects them, and the conditions and terms under which they can expect to make a successful claim. The amount of the insurance benefit is determined by what you and your family need to protect both present and future assets. If wealth management and asset protection are becoming part of your investment thinking, then your financial advisor can arrange a meeting with an estate planning and insurance specialist who can help you focus on insurance products that prepare and protect you and your family for the future.

 

Judy Poole is a financial advisor with Raymond James, and has spent the last 39 years involved in the financial industry. You can reach her at judy.poole@raymondjames.ca. This article is provided as a general source of information and should not be considered personal investment advice.  The views expressed are those of the author and not necessarily those of Raymond James Ltd.  Securities offered through Raymond James Ltd., member – Canadian Investor Protection Fund. Financial planning and insurance offered through Raymond James Financial Planning Ltd., not a member – Canadian Investor Protection Fund.

 

 

Just Posted

Skeena MLA Ellis Ross. (Photo by Peter Versteege)
BC Liberal leadership candidate condemns ‘senseless violence’ of Okanagan church fires

Skeena MLA Ellis Ross says reconciliation isn’t about revenge for past tragedies

(Black Press file photo)
EDITORIAL: Curtailing attempts at scams

The true total of losses from all scams and frauds could be much higher than the figures on file

Penticton Indian Band Chief Greg Gabriel speaks to the Sacred Hearts Catholic Church burning down early Monday morning, June 21, 2021. (Monique Tamminga Western News)
Penticton band chief condemns suspicious burning of 2 Catholic churches

Both Catholic church fires are deemed suspicious, says RCMP

(Drive BC photo)
Vehicle incident closes Highway 3 east of Osoyoos

Drive BC says to avoid the area until the road is clear

Osoyoos chef Murray McDonald was ecstatic upon realizing he scored the $1 million guaranteed prize in the June 2, 2021 Lotto 6/49 draw. (Contributed)
Osoyoos chef ecstatic after bagging $1 million Lotto 6/49 win

Chef Murray McDonald was at home and ready to doze off to sleep when he got a text from his wife

The border crossing into the United States is seen during the COVID-19 pandemic in Lacolle, Que. on February 12, 2021. THE CANADIAN PRESS/Paul Chiasson
VIDEO: Border quarantine to soon lift for fully vaccinated Canadians

Eligible travellers must still take multiple COVID-19 tests

Chilliwack secondary school’s principal is apologizing after a quote equating graduation with the end of slavery in the U.S. was included in the 2020-2021 yearbook. (Screenshot from submitted SnapChat)
B.C. student’s yearbook quote equates grad to end of slavery; principal cites editing error

Black former student ‘disgusted’ as CSS principal apologizes for what is called an editing error

A coroner’s inquest will be taking place at the Capitol Theatre in Port Alberni for the next week. (ELENA RARDON / ALBERNI VALLEY NEWS)
Teen B.C. mom who died following police custody recalled as ‘friend to many’

Police sent Jocelyn George to hospital after intoxication had gone ‘beyond the realm’ of normal detox

FILE - In this Nov. 29, 2020, file photo, Las Vegas Raiders defensive end Carl Nassib leaves the field after an NFL football game against the Atlanta Falcons in Atlanta. Nassib on Monday, June 21, 2021, became the first active NFL player to come out as gay. Nassib announced the news on Instagram, saying he was not doing it for the attention but because “I just think that representation and visibility are so important.” (AP Photo/John Bazemore, File)
Nassib becomes first active NFL player to come out as gay

More than a dozen NFL players have come out as gay after their careers were over

Photograph By MICHAEL POTESTIO.KTW
Former Kamloops security gaurd wants job back after kicking incident caught on video

Rick Eldridge quit when a video surfaced of him kicking a man outside a facility for homeless

People participated in a walk to honour the 215 children found at a former Kamloops residential school, as well as residential school survivors. (Twila Amato/Black Press Media)
Kelowna marks National Indigenous Peoples’ Day with walk to remember Kamloops 215

“Let’s speak the truth and deal with the truth, and heal.”

COVID-19 daily cases reported to B.C. public health, seven-day moving average to June 17, 2021. (B.C. Centre for Disease Control)
B.C.’s COVID-19 infections drop to 90 on Sunday, 45 Monday

Pandemic spread dwindles as 77% of adults receive vaccine

A home on Cameo Drive sustained major damage due to an early morning fire Monday, June 21. (Roger Knox - Morning Star)
UPDATE: Fire sparked during Vernon home renovation

Heavy black smoke from Cameo Drive home, no one inside

The new Civic Memorial Park will incorporate pieces of the 80-year-old arena it replaces. (Artists rendering)
Pieces of Civic Arena reclaimed for new Vernon park

City centre space to incorporate wood from the historic arena

Most Read